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Residents' Income Tax - Exchange rate
Legendary helpful member
If some of your income is received in sterling, then you obviously need to convert it to a euro value and enter this on your tax return.
Using the incorrect rate is a common failing of the so-called 'experts' who do tax returns. Most commonly they use the rate at 31st December, which is totally incorrect.
You need to use the average interbank rate for the year.
I've never been able to find any evidence of this being published in Spain by any Government department.
To make sure I wasn't missing anything, last April I went into Agencia Tributaria in Orihuela, and asked what exchange rate to use. The young lady I spoke to went and got the exchange rates at the end of every month in 2016, and worked out an average. She agreed with me that this wasn't very satisfactory, and didn't seem to know that, even though the average interbank rate for the year isn't published in Spain, it is published by the European Central Bank.
The link for this may change each year, but for 2016 it was:
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=120.EXR.A.GBP.EUR.SP00.A
This shows the average euro/pound rate was 0.81948, which gives a pound/euro rate of 1.2203.
When the 2017 tax returns come due, I'll post the rate to be used.
