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Massive tax rises for Spain

Interface de Serapeum Millorat V.1



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%


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. 


We take this opportunity to break down the personal taxes applicable in Spain, are the following:


Personal Taxes in Spain


Personal Income Tax (IRPF): national 

Form 100. 
Filing period: April - June 30 of the following year (5 days earlier if you have taxes due)
For residents only: This is the standard "IRPF" income tax that most Spaniards pay.
If you are a UK citizen, you must complete form FD9 to apply for UK income tax exemption. By completing this form you are consenting to the Spanish Revenue, certifying to HMRC that you are resident in Spain for the purposes of Spanish tax.


Non-residents Income Tax (IRNR): national

For non-residents only: Most non-residents are required to file income tax because they own a property (see article on Taxes for Property Owners), though you may also have to file because a Spanish company has paid you dividends, or because you worked for a few months during the year in Spain, etc.
Report of foreign assets (Form 720): national 
Filing period: January 1 - March 31 of the following year.

For residents:You are required to provide to the Spanish tax authorities information about any offshore accounts, offshore investments, and real estate located abroad with a value over 50,000€.


Inheritance and Gift Tax: regional

This tax applies to the beneficiaries of the inheritance or gift. The tax is on assets received with a value over 8000€. Even if the beneficiaries are not residents of Spain, they must pay this tax when the assets or rights are located in Spain. The tax rate starts at 7.65% and rises to 34% for assets with a value above 815,000€. If the beneficiary is a child (under age 18) of the deceased, then the tax rate on the assets is reduced to 5%.

VAT Tax (IVA): national 

The Canary Islands, Ceuta and Melilla have a different rate.

The standard rate is 21%. Essentials (food, water, medicine) have a reduced rate. If you're a tourist, you can get a refund of this tax at a booth in the airport before you leave Spain by showing your receipts for over 90€ (including IVA). The 90€ doesn't have to refer to a single item but it does have to be on a single receipt.

Transfer Tax and Stamp Duty (impuesto de transmisiones patrimoniales y actos jurídicos documentados): regional 

Filing period: Within 30 days of the transaction.
This tax is for certain real estate and commercial transactions. It is paid by the purchaser or the beneficiary of the transaction. The rate starts at 0.5% (for commercial activities) and rises to 6% (for real estate transactions).

Property Tax (IBI): local 

Filing period: Varies depending on the municipality, but normally between September and November of each year.
Each year, the municipality issues a property tax payment slip for all properties. The tax is usually between .5% and 1.1% of the cadastral value (valor catastral) of your property, which is roughly 20 times lower than the market value.

Plusvalía: local 

Paid when you sell your property.
This is essentially a tax on the appreciated cadastral value of a property. It is paid by the seller. For more information, see our article on property taxes

Municipal Tax (basura): local 

Filing period: Varies depending on the municipality.
This varies depending on where you live. Usually assessed per house or building. Sometimes the tax is combined with water consumption.

Motor Vehicle Tax (impuesto sobre vehículos de motor): local 

Filing period: Varies depending on the municipality, but normally between September and November of each year.
This tax is based on the age and the power of the vehicle. The larger the city is, the higher the tax. For an average car, it is about 60€ a year.


Josep Navarro's picture
Josep Navarro es Licenciado en Económicas por la UB, especializado en Inspecciones Tributarias, con más de 25 años de experiencia en asesoría fiscal para empresas y particulares en España.

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