Tax Changes for 2025

As of 1 January 2025, Spain is introducing a number of tax changes affecting both individuals and businesses. The main changes are outlined below.

Personal Income Tax (IRPF)

• Higher income threshold for filing: Taxpayers earning up to €22,000 a year from more than one payer will not have to file a return if the amounts received from the second and subsequent payers do not exceed €2,500 (previously €1,500).

• Filing requirement for unemployment-benefit recipients: From 2025, all recipients of unemployment benefits must file a tax return, regardless of their income.

• Home energy-efficiency deductions: Deductions for energy-efficiency improvements to homes are extended until the end of 2025 or 2026, with specific rates and limits depending on the type of improvement.

• Promoting electric mobility: The 15% deduction for purchasing electric vehicles or installing charging points continues, with maximum tax bases of €20,000 and €4,000 respectively, and applies until 31 December 2025.

• Imputed property income: A rate of 1.1% will apply to properties in municipalities whose cadastral values have been updated since 2012.

• Modules regime: thresholds extended: The current thresholds remain in place for 2025, including a maximum income of €250,000 and a €125,000 limit for transactions requiring an invoice.

• Reduction for exceptional artistic income: A new 30% reduction is introduced for artistic income that exceeds the average of the previous three years by 130%, subject to an annual limit of €150,000.

• Higher top rate for the savings tax base: The top band of taxable savings income (over €300,000) rises from 28% to 30%.

• 2025 tax return campaign: The campaign will run from 2 April to 30 June 2025. Telephone filing will be available from 6 May to 30 June, and in-person appointments from 2 to 30 June, in both cases by appointment.

• New payment methods: Payments by Bizum or credit card will be accepted, reflecting the popularity of these methods and making payment easier for taxpayers.

• Exemption for landlords renting to under-35s: Landlords who rent to people under 35 may qualify for a 100% personal income tax exemption on rental income, encouraging rentals to young people.

Corporate Income Tax (IS)

• Capitalisation reserve: Tax benefits are expanded for businesses that reinvest in capital and increase their workforce, with reductions varying according to workforce growth.

• Tax rates for micro-enterprises: A new reduced rate of 17% applies to the first €50,000 of the taxable base, with the excess taxed at 20%. These rates will be phased in through 2027.

• Immediate depreciation for renewable energy: Investments in renewable electricity or heat self-consumption installations may be fully depreciated up to €500,000, provided the workforce is maintained.

• 15% global minimum tax: A minimum rate of 15% is ensured for large multinational and domestic groups, in line with OECD guidelines.

Value Added Tax (VAT)

• Fermented milk: This product is subject to the reduced 4% VAT rate.

• Fuel: New safeguards are introduced to combat tax fraud in the distribution of diesel, petrol and biofuels.

• Tourist accommodation: Changes are being prepared to tax this type of rental in areas experiencing tourist saturation.

• Reduced VAT rate for olive oil: From 1 January 2025, the VAT rate on olive oil is reduced from 10% to 4%.

Simplified modules regime

• The current thresholds for applying this regime are extended for 2025. The deadline to opt out or revoke an opt-out is extended to 31 January 2025.

Electronic invoicing

• Invoicing platforms will have to send exact copies of invoices to the public system. They will also have to report whether each invoice has been paid or rejected.

Additional measures

• Property purchases by non-resident foreign nationals: A 100% tax charge is proposed on property purchases by non-EU non-residents, with the aim of curbing speculation and easing the housing shortage.

• Emergency plan to address the housing crisis: The Government has launched a 12-measure plan, including tax incentives for landlords offering affordable rents and rules to prevent rental fraud.

These changes are intended to respond to the current needs of the Spanish economy by promoting energy efficiency and sustainable mobility, addressing the housing crisis and pursuing other objectives.