Spanish income tax rates 2015

RATES AND ALLOWANCES FOR SPANISH RESIDENT INCOME TAX

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.

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 The deduction for your main home has been withdrawn, although those with income up to €24,000 that have claimed previously may continue to claim for rental contracts in place before 1 January 2015.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 The 100% deduction for rental income from young tenants has been withdrawn.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 The tax exemption for the first €1,500 of dividend income has been withdrawn.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 Catalunya 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. 

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