Bank query

As a non resident might I suggest you use one of the many online banking systems such as Wise or somesuch.

Spanish banks, like UK ones, have quite high charges for non resident and non citizen accounts. You can pay direct debits through the online banks, draw money out in Spain (though limited) and not have to pay the non resident declaration fee every couple of years. The online banks don't charge unless you go over the limit for withdrawals and have EU IBAN numbers plus the fee for withdrawals is very low compared to the charges made by the banks.

Spanish banks fine for residents if you meet their T&Cs which aren't that onerous but they do go OTT with non resident accounts. 

Preface - I'm a resident.

I had been with N26 for many a year - until last month. The reason I left/was forced out was because they stated to me that they needed to see my tax return for 2022 as part of the "Know Your Customer" requirements.

I told them that I wasn't going to provide them with that as that is between me and the tax authorities. 

They responded asking for my P60 - where they got the idea I would have a HMRC issued form is bizarre but I responded saying that I couldn't provide that.

They then said we're closing your account and it is been placed under restrictions meaning you can only transfer money out and not in.

I spent a couple of hours moving all my direct debits across to Wise (with a BE IBAN) and there they shall remain unless Wise come up with an equally idiotic request to see my tax returns. I transferred the remaining money out of N26 into Wise and closed my account.

Note - I don't think Wise has bank status so doesn't have the same FSCS protections but if you're simply using it as a day to day spending account its unlikely you would have any substantial amounts in it. As it is, I happen to have a Euro based savings account in the Isle of Man which does have protection which is where I keep my small amount of savings (Isle of Man protection is £50k GBP as opposed to FSCS protection at £85k or ECB protection at 100k Euros IIRC)

Banks are asking for proof of income due to a EU ruling regarding foreign income. This is not the Spanish banks being huffy but simply obeying the law. Mainly to stop Russians from transferring funds when they have been embargoed but applies to everyone. Some of the online banks are not actually banks and are really currency converters so are not bound by the banking rules. 

Because N26 is actually a bank so subject to the EU Transparency in Banking regulations. Wise is not. 

Is Wise as safe as banks?

Wise is not a bank - however, for the services Wise offers, it is as safe as a bank.

Banks are often subject to more regulation compared to international money transfer companies, because they also offer extra services like credit cards and loans. For international transfers, Wise is as safe as a bank, but often cheaper and faster.

Wise vs international bank transfer

https://www.exiap.com/reviews/transferwise-safety

So you have provided your tax return to your bank?

They don't need it, it's nothing to do with them. I pay my taxes and that is between me and the tax authorities. It's nothing to do with the bank.

Edit: So as you can guess, I'm peeved about the whole thing. KYC or AML has no requirement to  know your tax returns. It's simply over zealous banks wanting details that they don't need to verify customers.

I'm a resident. My payment to the bank comes direct from a pension provider which states its provenance. Only non residents who send money from overseas are required to do so. Just like they are in UK. 

Just as the UK banking code states

"In order to open a bank account in the UK as a non-resident, you'll typically need to provide the following documentation: Proof of identity, such as a passport or national ID card. Proof of address, such as a recent utility bill or bank statement. Proof of income, such as a payslip or tax return."

People think it only applies to other countries as they don't have to do so being citizens of UK. Just like the complaints about the ETIAS being introduced in EU but not knowing UK is doing the same with an ETA for non UK citizens. It doesn't apply to them so it doesn't exist.

"such as"

So not a requirement to provide a tax return just something that would be deemed the equivalent of. After all, a tax return proves nothing from a bank account perspective especially if the income declared on the tax return never actually makes it to the bank account in question.

But I'm in danger of ranting and I need to lower my blood pressure - must be time for a glass of Pinot.

(Please don't take any of my rantings personally - it's clearly whatever rules that are being applied which are nonsense rather than anything you've posted!)