Latest
Spanish income tax rates 2016 by region (comunidad)

Half of your income is taxed at rates set by Spain´s central government and the other half by the local region (comunidad) in which you live.


Tax rates have stayed the same in most regions for 2016 with a only a couple of minor adjustments being made.

 

 

State Bands

State

Region

Total 2015

 

   

 

 

€0 - €12,450

9.5%

10.0%

19.5%

€12,450 - €20,200

12.0%

12.5%

24.5%

€20,200 - €35,200

15.0%

15.5%

30.5%

€35,200 - €60,000

18.5%

19.5%

38.0%

Over €60,000

22.5%

23.5%

46.0%

 


Andalucía

State

Region

Total 2015

 

         

         

         

€0 - €12,450

9.5%

10%

19.5%

€12,450 - €20,200

12.0%

12%

24.0%

€20,200 €28,000

15.0%

15%

30.0%

€28,000 - €35,200

15.0%

16.5%

31.5%

€35,200 - €50,000

18.5%

19%

37.5%

€50,000 - €60,000

18.5%

19.5%

38.0%

€60,000 - €120,000

22.5%

23.5%

46.0%

Over €120,000

22.5%

25.5%

48.0%

 

Cataluña

State

Region

Total 2015

 

         

         

         

€0 - €12,450

9.5%

12%

21.5%

€12,450 - €17,707.20

12.0%

12%

24.0%

€17,707.20 - €20,200

12.0%

14%

26.0%

€20,200 - €33,007.20

15.0%

14%

29.0%

€33,007.20 - €35,200

15.0%

18.5%

33.5%

€35,200 - €53,407.20

18.5%

18.5%

37.0%

€53,407.20 - €60,000

18.5%

21.5%

40.0%

€60,000 - €120,000

22.5%

21.5%

44.0%

€120,000 - €175,000

22.5%

23.5%

46.0%

Over €175,000

22.5%

25.5%

48.0%

 

Madrid

State

Region

Total 2015

 

                  

         

         

€0 - €12,450

9.5%

9.5%

19.0%

€12,450 - €17,707.20

12.0%

11.2%

23.2%

€17,707.20 - €20,200

12.0%

13.3%

25.3%

€20,200 - €33,007.20

15.0%

13.3%

28.3%

€33,007.20 - €35,200

15.0%

17.9%

32.9%

€35,200 - €53,407.20

18.5%

17.9%

36.4%

€53,407.20 - €60,000

18.5%

21%

39.5%

Over €60,000

22.5%

21%

43.5%

 

Murcia

State

Region

Total 2015

 

         

         

         

€0 - €12,450

9.5%

10%

19.5%

€12,450 - €20,200

12.0%

12.5%

24.5%

€20,200 - €35,200

15.0%

15.5%

30.5%

€35,200 - €60,000

18.5%

19.5%

38.0%

Over €60,000

22.5%

23.5%

46.0%

 

Valencia

State

Region

Total 2015

 

 

 

 

€0 - €12,450

9.5%

11.9%

21.4%

€12,450 - €17,707.20

12.0%

11.9%

23.9%

€17,707.20 - €20,200

12.0%

13.92%

25.92%

€20,200 - €33,007.20

15.0%

13.92%

28.92%

€33,007.20 - €35,200

15.0%

18.45%

33.45%

€35,200 - €53,407.20

18.5%

18.45%

36.95%

€53,407.20 - €60,000

18.5%

21.48%

39.98%

€60,000 - €120,000

22.5%

21.48%

43.98%

€120,000 - €175,000

22.5%

22.48%

44.98%

Over €175,000

22.5%

23.48%

45.98%

 

 
Massive tax rises for Spain from 2012

Deficit-cutting measures by the Spanish governmeNt send tax rates through the roof

The Spanish government has been trying to cut their deficit for several years now, mainly by spending cuts and tax rises. These included a 2% rise in the rate of IVA (VAT) in 2010, and a return of the wealth tax in 2011, followed by yet another rise in IVA of 3% in 2012. It seems that since a change of government in December 2011 they have been getting serious about plugging the gaping hole in the national finances with some serious tax rises.

Increased income tax rates 2012 to 2014 (applied to earned income):

  • Income band                   Previous rate      Increase         New rate
  • €0 - €17.007                         24%              0,75%          24,75%
  • €17.007 - €33.007                 28%                2%               30%
  • €33.007 - €53.407                 37%                3%               40%
  • €53.407 - €120.000               43%                4%               47%
  • €120.000 - €175,000             44%                5%               49%
  • €175.000 - €300.000             45%                6%               51%
  • over €300.000                      45%                7%               52%

Autonomous regions sometimes add more tax to these rates (see Spanish Income tax rates)

 

Increased investment income tax rates 2012 to 2014:

    • Income band                   Previous rate      Increase         New rate
    • €0 - €6.000                          19%                 2%                 21%
    • €6.000 - €24.000                  21%                 4%                 25%
    • over €24.000                        21%                 6%                 27%
    • (Dividends up to €1.500 are still tax free)

    Non-residents tax rises from 24% to 24.75%

    IBI (local taxes, the equivalent of council tax in the UK) rises from 4% to 10%, impacting more than 25 million properties in Spain. A small number of properties suffer no rise because they were built during the peak of the property boom and their official values are already high.

    The rises were supposed to be temporary, applying only to 2012 and 2013, but the mood in Spain is gloomy with no end in sight to the years of austerity and economic pain, and they have now been extended into 2014. The squeeze has also been put on local and regional governments who are being forced to cut spending and jobs. Pensions and public sector pay are also under attack.

    It is hard to see Spain growing under the combined weight of these measures, even though no one can deny that something needs to be done to reassure debt markets because of the amount of debt that Spain needs to sell to avoid going under.

     

     

 
What to do if you get a letter from the Spanish Tax Office

The target audience of this article is very specific: the people who have received a letter from the Spanish Tax Office (Agencia Tributaria) and don’t know what to make of it or what to do.  I am writing about letters they started sending out from Autumn of 2011 with the title “Comunicacion”.

I have done it in a Q&A format. If you have any further doubts about what to do after reading this then please contact us for advice here

What letter do you mean?

The Spanish Tax Office have started targeting non-resident property owners with letters asking why they haven’t received tax returns from them. They seem to have been going through land registry (“catastral”) records but they could equally have been using their access to utility company computer systems or local tax records held by municipal authorities. It is then easy enough to cross-check against their own records of who files a tax return and send out a letter to those who haven’t.

To identify what I mean it is entitled “Comunicacion” and will have your name, NIE (they say NIF – your “fiscal” number – which s the same thing) and address on it. It will come from your regional tax office (“Delegacion de”), is in Spanish of course and has three paragraphs of text (“Comunicacion”) and a list of the relevant statutes (“normas”) at the bottom. 

If you have been sent one of these and are unsure what to do, this article  is aimed at you.

Why me?

I don’t know. Not every property owner who doesn’t pay taxes has received one of these letters but it seems to be across Spain. Perhaps in time they will get to everyone who has avoided paying taxes so far but maybe they have just targeted some people at random to try and drum up more tax revenue.

What does it say?

It is not a tax demand as such, more a polite but firm querying of your tax affairs in Spain. Paragraph one notes that you have owned a property in Spain for at least part of the period since 2007 and they have not received non resident or resident income tax returns from you or wealth tax declarations.

The second paragraph states that you should make the declarations you have omitted or face a possible tax investigation and fines.

The last paragraph is just to say that the letter itself is not a tax demand or the start of an investigation.  If you get a letter headed “requirimientos” (literally “requirements”) that is a formal request for you to explain yourself and submit certain documents and proofs within a certain deadline.  That is a more advanced stage of Tax Office attention and demands an urgent response.  This is more a warning of problems ahead.

What do I do now?

Clearly that depends on your situation:  what your actual liability to declare and pay taxes in Spain was for the period in question. 

Here are some scenarios –

I have been making tax declarations during this period.

I haven’t yet seen an example of someone getting one of these letters who HAS been paying their taxes for all of the years under scrutiny. If this is your case then either it is a mistake on the Agencia Tributaria’s part or you haven’t declared everything you should. 

If you think it is their error you could ignore the letter and carry on declaring as normal. If you are wrong and there is something irregular about your declarations then there is a possibility that they chase you at a later date with one of the stronger “requirimientos” letters which will require you to prove you are in the right.

If you think you have received the letter because you missed a year or are not sure whether all the right forms have been submitted (e.g. you relied on an adviser to pay your taxes) then it is clearly worth checking up that you do not have a residual liability.  The Tax Office will not automatically give you a list of declarations outstanding in your name but if you go to the local office with the letter and copies of the declarations you have made then you should be able to get some answers.

I am a Spanish resident and haven’t been declaring.

The reason the tax office has not got a tax return from you maybe that you are resident and either have no income or not enough to take you over the thresholds which make a declaration obligatory. See the "declaration thesholds" on this page.

At some point you may be asked to prove that your income is below the thresholds. If you have exceeded the thresholds or may have done it is worth considering making a declaration for the years in question.  It may not involve paying any tax as the personal allowance may not have been exceeded or you may have paid tax already "at source".

Note that official Spanish tax residents do not have to pay the non resident income tax on imputed rent that non resident property owners do (but see below).

I am Spanish resident but have never declared

Even if you have been resident and have had little or no taxable income the letter could spell trouble. This is because all residents must register as tax resident and submit a declaration in the year in which they register regardless of their income level. Until they do so they will not be considered as Spanish tax residents and therefore may be obliged to submit non resident tax returns.

So if you have never declared, either as resident or non resident, then you may well have to retrospectively do non resident income tax returns (see next section). The tax office will not simply allow you to say that you are resident if you haven't officialised that by registering and submitting at least one tax declaration.

I am not Spanish resident and haven’t been declaring.

Non resident Spanish property owners will almost certainly have some catching up to do when it comes to Spanish tax returns if they want to avoid this letter turning into a full on tax investigation. This is because non residents have to declare a special income tax in Spain based on the "imputed rent" they are deemed to have received on their property or the real rent if they have actually been renting out their property.

It is an unusual tax and catches a lot of foreign holiday home owners out because there is no equivalent in many countries like the UK. Unfortunately ignorance is no defence and if you have owned a property in Spain at any time since 2007 then you are due to have been making tax returns every year.

The nature of the tax, often called Form 210 tax after the declaration form number, and how to go about declaring are dealt with in a separate article on this site.  Spanish tax form 210.

What about prior to 2007?

Spain has a kind of statute of limitations for undeclared taxes. The tax office can't go back more than four years after the tax is due to chase unpaid taxes.

What will I end up paying?

Obviously for residents it depends on their income and circumstances so is impossible to say, but for non residents who have missed the requirement to pay tax on the "imputed rent" on their property it is more predictable. The tax rate is 24.75% of the imputed rent in years 2012-2014 (24% prior to this). The tax rate will be reducing a little in 2015. The imputed rent is usually calculated as 1.1% of the registered value of the property, which can be found on the annual local tax bill that you get from the Ayuntamiento (look for the "valor catastral").

If you declare voluntarily there frequently may not be any fines or interest charged, but there will be if you leave it and the Tax Office come after you later.

Can ADVOCO help?

If you are worried about this then you may want to contact us. There is an ADVICE section with many articles on personal tax which may clarify your particular situation.

We provide an online declaration service for non-resident income tax: Form 210 service.

Also we provide an email query service - simple queries are answered free and for a small fee we will do longer email consultations to clarify your tax situation. Contact us here.

Related article:  UK and Spanish Tax Implications of a property in Spain

 

 
Spanish income tax rates 2012 to 2014

RATES AND ALLOWANCES FOR SPANISH RESIDENT INCOME TAX

Introduction

Spanish resident tax returns declaring income received in the 2014 calendar year will be submitted during May and June 2015. The deadline for submission of a return and payment of any tax due is 30th June 2015.

Most foreigners will be considered Spanish tax resident if they were in the country for 183 or more days during 2014. They must complete a tax declaration including all their worldwide income unless their income is lower than the thresholds described below. Anyone becoming tax resident for the first time (because they moved to Spain during 2014) must file a tax declaration regardless of income levels. Related article: Do you need to do a Spanish tax return?

Married couples can make a joint return or declare separately. The tax implications of separate taxation versus joint taxation are significant and couples should calculate the best option, though often it is obvious - see related article: Spanish taxation of married couples

Changes

> Significant "temporary" tax rises for the tax years 2012 to 2014 push the top rate of tax to 52%

> The deduction for cost of principal residence was originally meant to have been scrapped for all taxpayers with income greater than €24,000 but this change has been cancelled so the deduction is currently still available

> Increased deduction for income earned from rent (landlords were taxed on 50% of rent received, now 40%)

Extra taxes in the regions

Since 2011, people in different regions pay different top rates of income tax. Local surcharges have been added by autonomous regions such as Andalucia and Cataluna. For example, the income tax rate in Andalucia is 1% higher than the rates in the table below for incomes above €80,000, 2% above €100,000 and 3% above €120,000

In Catalonia the top rate, payable on income over €150,000, will be even higher at 49%

Selected other top rates:  Asturias 48.5%  Cantabria and Extremadura 48%

Madrid and Valencia actually have slightly lower rates of tax than the national scale below

SPANISH TAX RATES AND ALLOWANCES FOR 2012 TO 2014

  • Rate for capital gains and investment income:
  • (Dividends up to €1,500 are tax free)
  • €0 - €6,000                  21%
  • €6,000 - €18,000          25%
  • more than €18,000       27%

    Rate for other income after allowances and deductions:

  • Income band                           Tax rate
  • €0 - €17,007                           24.75%
  • €17,007 - €33,007                    30%
  • €33,007 - €53,407                    40%
  • €53,407 - €120,000                  47%
  • €120,000 - €175,000                49%
  • €175,000 - €300,000                51%
  • more than €300,000                 52%

Personal allowances

Individual €5,151 (at the basic tax rate of 24.75% regardless of income level)

65 and over €6,069
75 and over €7,191

Disability allowance

Grade 33-65 €2,316
Grade 65-100 €7,038
Additional if third-party care required €2,270

Child allowance (less than 25, living in and income less than €8,000):

First child                €1,836
Second child            €2,040 
Third child               €3,672 
Fourth & additional children €4,182

Additional for child under 3 €2,244

Parent allowance (mother or father living in with income less than €8,000):

Over 65      €918
Over 75      €1,122

Earned income allowance (includes pension income)

Earnings up to €9,180         €4,080
Earnings over €13,260        €2,652
(sliding scale applies for income between the two limits)

Dividends receivable tax free €1,500

Declaration thresholds

Allowable levels of income before a declaration must be made:

Earned income already subject to employer deductions (if other income less than €1,500)  €22,000

Reduced limit if earned from more than one employer  €10,200

Bank interest and other investment income €1,600

Rent €1,000

 

To see all our income tax articles please go to the Advice page and select Personal Tax from the drop down box

 
Spanish income tax rates 2015

Rates and allowances for Spanish resident income tax

Introduction

Spanish resident tax returns declaring income received in the 2015 calendar year will be submitted during May and June 2016. The deadline for submission of a return and payment of any tax due is 30th June 2016.

Most foreigners will be considered Spanish tax resident if they were in the country for 183 or more days during the calendar year. Residents must submit a Spanish tax return including all their worldwide income, unless their income is lower than the thresholds described below. Anyone becoming tax resident in 2015 must file a tax declaration regardless of income level. Related article: Do you need to do a Spanish tax return?

Married couples can make a joint return or declare separately. The tax implications of separate taxation versus joint taxation are significant and couples should calculate the best option, although often it is obvious. Related article: Spanish taxation of married couples

Changes for 2015

> Tax rates have reduced for 2015. Allowances and deductions have increased, particularly for those with low income or many dependents.

> The highest tax rate for those with incomes up to €120,000 will be 46%. The top rate for income above that will be up to 48% in some regions (see below).

> The deduction for your main home has been withdrawn, although those with income up to €24,000 that have claimed previously may continue to claim for rental contracts in place before 1 January 2015.

> The 100% deduction for rental income from young tenants has been withdrawn. All landlords will now be taxed on 40% of net rent income.

> The tax exemption for the first €1,500 of dividend income has been withdrawn.

Extra taxes in the regions

Taxes are split between state and regional governments. This used to be an equal split but since 2011 each autonomous region (comunidad) of Spain has been able adjust its own tax rates and bands, so residents of each region now pay slightly different rates of income tax.

Not only have state tax rates reduced in 2015 but also the number of income bands has reduced from seven to five. Many regions have however decided to maintain their tax rates and bands at similar levels to those of 2014. This has led to more complicated tax tables in which some regions now have up to ten income bands.

In Cataluña the top rate, payable on income over €175,000, is 48%.
In Andalucía the top rate, payable on income over €120,000, is 48%.
Madrid currently has the lowest tax rates in Spain, starting at 19% and going up to a maximum of 43.5%

SPANISH TAX RATES AND ALLOWANCES FOR 2015 AND 2016

Tax on capital gains and investment income:
Income band                                  2015               2016
Up to €6,000                                 19.5%                   19%
€6,000 to €50,000                         21.5%                   21%
Over €50,000                                23.5%                   23%

Tax on other income after allowances and deductions:
Income band                                  2015               2016
Up to €12,450                                19.5%                  19%
€12,450 to €20,200                         24%                    24%
€20,200 to €35,200                         30%                    30%
€35,200 to €60,000                         37%                    37%
Over €60,000                                  45%                    45%

Most regions vary slightly from the above State-recommended rates. Tables for most regions can be found here

Personal allowance
Individual        €5,550 (at basic rate)
75 and over     €8,100
65 and over     €6,700

Married couple allowance
For second spouse in a joint return    €3,400 (at highest marginal rate)

Disability allowance
Grade 33-65                          €3,000
Grade 65-100                       €12,000
Grade 65+reduced mobility     €6,000

Child allowance
(under 25 living with you and income less than €8,000):
First child                        €2,400
Second child                    €2,700
Third child                       €4,000
Each additional child         €4,500
+for each child under 3     €2,800

Parent allowance
(mother, father or grandparent living with you with income less than €8,000):
Over 65s     €1,150
Over 75s     €2,550

General earned income allowance
(includes pension income)
Fixed amount                                         €2,000

Low income allowance
(includes pension income)
(only available if investment income is less than €6,500)
Earnings up to €11,250                           €3,700
Earnings between €11,250 and 14,450     €3,700 pro rata
Earnings over €14,450                            €0

Declaration thresholds

Allowable levels of income before a declaration must be made:

Earned income already subject to employer deductions (if other income less than 1,500€)  €22,000

Reduced limit if earned from more than one employer  €12,000

Bank interest and other investment income €1,600

Rent €1,000

 

To see all our income tax articles please go to the Advice page and select Personal Tax from the drop down box

 
«StartPrev123NextEnd»

Page 1 of 3