Personal Income Tax (IRPF) in Spain

1. Overview

The Personal Income Tax (Impuesto sobre la renta de las personas fí­sicas / IRPF) is a direct tax levied on the income of individuals.

The individual’s personal income may come from either a dependent work or obtained by means of self-employment: development of a business or professional activities.

The taxable income is determined as the difference between the income earned and the expenses that are deductible according with Spanish Law.

Following people must submit their income tax return in Spain:

– Individuals earning more than € 22,000.00 a year.

– If you changed of job within the same year and the salary you receive from your second or further employers exceeds 1,500 eur total during the year.

The tax period coincides with the calendar year.

This tax is assessed differently for residents and non-residents in Spain.

2. Non-residents income tax liability

Non-residents are liable for this tax on any income arising in Spain, such as a money deposit with a Spanish bank, a property in Spain, or income derived of any business in Spain.

Property owners are taxed on an annual basis on their property income. The tax base is the property catastral value (valor catastral), which can be found on any I.B.I receipt that is issued once a year. Tax base rate is 24% of a 2% of the catastral value for non EU citizens, and 19% of a 2% of the catastral value for EU citizens.

Should you fail to pay this tax, you will be charged and penalized by the Spanish Tax Agency if you try to sell your property.

This tax must be submitted between the 1st of January and the 31st December with regards to the previous tax year.

3. If you are a Spanish resident

If you are a Spanish resident you will be taxed for your worldwide income. You may deduct your income tax paid in your home country.

Double tax treaties are in place to avoid double-taxation. When there is no treaty with your country of origin, you may deduct the foreign tax paid; foreign compensation may also be applied. Your Spanish Lawyer may calculate this amount for you.

Those non-residents living more than 183 days in Spain are also considered as residents for tax purposes, even if they have not obtained their residence permit.

4. When should you file your income tax return if you are Spanish resident?

Normally from the 5th of April until the end of June.

5. Where should you submit your income tax return?

Income tax returns may be submitted by confirming the draft issued by the tax office, before the Tax Office of the taxpayer’s address or through the internet.

6. Deductible expenses

Certain deductible expenses, such as deductions for caring dependant relatives, children, amounts paid for the purchase of a home or accounts opened for such purpose (“cuentas vivienda“) may be claimed in the annual tax returns.

Employers must provide employees with a certificate of taxes withheld (Certificado de Retenciones) so that employees are able to subtract them in order to calculate their tax obligation.

7. Getting legal help

Let us take care of all your tax paperwork. Purchase a pre-packaged legal service delivered by our team of Spanish lawyers for a fixed one-off price:

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