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 The deduction for your main home has been withdrawn, although those with income up to €24,000 that have claimed previously may continue to claim for rental contracts in place before 1 January 2015.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 The 100% deduction for rental income from young tenants has been withdrawn.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 The tax exemption for the first €1,500 of dividend income has been withdrawn.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