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Taxes In Spanish Income: Impuesto Sobre la renta

taxes in spanish

Taxes in Spanish income can be quite complex, so it’s important to have an understanding of the tax system in order to pay them correctly. In this article, we’ll take a look at the impuesto Sobre, or tax on income, and discuss some of the basics involved.

What is a Tax?

In English, taxes refers to any fees or charges levied by the government on its citizens for the purpose of funding public services. In Spanish, taxes can also refer to an income-related charge that a person or business must pay in order to operate legally in a particular country. Taxes can take many different forms, and they can be levied on individuals, businesses, or even entire countries.

Some of the most common taxes terms in Spanish are the..

Impuesto sobre la Renta (income tax),

Impuesto sobre Sociedades (corporate tax),

y el Impuesto Especial sobre Producción (special production tax).

taxes in spanish
Each of these taxes has specific rules and requirements that you’ll need to know if you’re planning on operating a business in Spain.

Each of these taxes has specific rules and requirements that you’ll need to know if you’re planning on operating a business in Spain.

If you’re an individual living in Spain, you may also have to pay

impuestos de bienes personales (property taxes),

impuestos municipales (municipal taxes),

y impuestos especiales sobre motocicletas y automóviles particulares (motor vehicle taxes).

fraude or evasión fiscal (Tax Evasion)

sobre la gasolina (Tax on Petrol, gasoline tax)

Tax la mitad se (half of it goes in tax)

Income tax is one of the more common Spanish cultures. It’s usually imposed at a progressive rate, meaning that higher-income individuals are typically responsible for paying a larger percentage of their income in taxes. The government uses this revenue to fund a variety of important public

anyexpat's Spain expat services for expatriates who living abroad

Tax Burden

The tax burden consists of all the taxes that people have to pay on what they earn (direct taxes) and on things that they buy (indirect taxes).

Taxation: A Brief History

In Spanish, the word for “tax” is “impuesto.” Impuestos are levied by the government to raise taxes/funds for public needs. Impuestos can be classified according to their source of revenue: income, property, sales, etc. One of the most important Spanish taxes is the impuesto Sobre la Renta.

Taxation: A Brief History

The origins of Tax In the Spanish Income can be traced back to the Middle Ages. At that time, Spain was a feudal society and the landlords were taxed on their incomes. This system remained in place until 1834 when it was replaced by an indirect system based on property owners. The direct system was restored in 1898 during Francisco Franco’s dictatorship. In 1931, Spain adopted its current progressive system, which taxes higher incomes more heavily than lower incomes.

There are three main types of Spanish tax:


Global income tax is imposed on all taxable income derived from within Spain regardless of where it is earned.

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Regional tax applies only to incomes derived from activities within a specific region of Spain (e.g., Catalonia, Andalusia).


Local tax applies only to incomes derived from activities within a specific municipality or local district (e.g., Barcelona City Hall).

The most important part of any Spanish tax return is the Income Tax Declaration Form (T4), which must be

Types of Taxes

There are a variety of taxes that you may be liable for in your Spanish income, depending on your source of income. Here’s a quick rundown of the most common ones:

Impuesto Sobre la Renta: This tax is levied on all income earned, including wages, salary, and any other form of compensation. The rate can vary depending on the country you reside in, but it’s typically around 25%.

Impuesto Sobre el Valor Añadido: This tax is charged on profits generated from selling goods or services in Spain. The rate ranges from 8% to 21%, with an overall cap of 32%.

Impuesto General de la Nación (IGNA): This is the main general tax in Spain and applies to all types of incomes. The rate ranges from 14% to 34%, with an overall cap of 48%.

Impuesto sobre Bienes Inmuebles (IBI): This tax is levied on property ownership in Spain. The rate varies based on the value of the property, with a maximum rate of 20%.

Tax Incentives and Credits

Taxes in Spain

Income Taxes in Spain

how much tax do you pay? is a Question. Every country in a democratic system should be able to decide on its own taxes Spain has a progressive tax system in which individuals who earn more money pay tax higher percentage of their income in taxes. The following table shows the progressive rates for tax in Spain:

Income Tax Rate

  • 19% on €12,450 of Income,
  • 24% on Next €12,450 to 20,000 of Income,
  • 30% on Next €20,000 to 35,200 of Income,
  • 37% on Next €35,201 to 60,000 of Income.

Savings are taxed at the following rates:

  • 19% for the first €6,000 of taxable savings income
  • 21% for the following €6,000–€50,000
  • 23% for the following €50,000–€200,000
  • 26% for any savings income even more than €200,000

There are also various deductions and credits that can reduce an individual’s taxable income. For example, one deduction is the basic allowance for employees, which lowers taxable income by 50%. Additionally, there are various education and health expenses that can be deducted from an individual’s taxable income. Finally, there are also Various allowances and exemptions for pensioners, the unemployed, children under 18 years old, etc. that can reduce an individual’s taxable income even further.

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The Spanish government collects its revenue through two main sources: direct taxation and social security contributions. Direct taxation includes taxes such as personal income tax (IBI), corporate tax (CIT), value-added tax (VAT), and estate tax. Social security contributions include payroll taxes such as the national insurance (INPES) contribution and social security payments such as unemployment benefits (AJUDA) and maternity benefits (MATERNIDAD).

In Spain, who is required to pay taxes?

In Spain, who is required to pay taxes?

Residents’ Spanish tax

if you live in Spain for six months 183 days or more of the calendar year or if your main vital interests are in Spain (for example, your family or business).

In the following cases, you must file a Spanish tax return and pay Spanish income tax as a Spanish resident:

You earn more than €22,000 per year from your employment.

In Spain, you are self-employed or run your own business.

A rental income of more than €1,000 per year is received by you.

You earn more than €1,600 a year from capital gains and savings.

You are declaring tax residency in Spain for the first time.

Additionally, you must declare all assets abroad worth at least €50,000 (using Form 720, Modelo 720). The income left after deductions for social security contributions in Spain, pensions, personal allowances, and professional fees is your taxable income. Spanish tax rates are progressive.

Non-resident tax in Spain

Your income from Spain is taxed at a flat rate with no allowances or deductions if you live in Spain for less than six months in a calendar year. If you live in Spain for less than six months (183 days) in a calendar year, you are a non-resident. You will have to file a tax return if you own a property in Spain, whether or not you rent it out, and pay Spanish property taxes for non-residents (or imputed income tax on your property) as well as local Spanish property taxes.

What is an Impuesto sobre la Renta de las Personas Fisicas?

An impuesto Sobre la Renta (I.S.), also known as an income tax, is a type of indirect taxation collected by the government on earned income and capital gains. It is one of two main types of taxes levied in most countries, the other being direct taxation. Worldwide, there are many different types of I.S., each with its own specific rules and rates.

In general, an individual’s taxable income depends on their source of income and their personal circumstances. The I.S. applies to both earned and unearned income, including wages, salaries, tips, dividends, interest, rental income (including social housing), alimony payments, child support payments, lottery winnings, and property rentals (such as holiday homes). The I.S. usually ranges from 10 to 45 percent of your annual earnings or net investment income (net of any allowable deductions), whichever is greater.

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Tax Reform

If you’re an American expat living in Spain, you may be wondering how the new tax reform will affect you. The short answer is that it’s complicated. Here’s a breakdown of the main changes.

Tax Reform

The most important change for individuals is that the standard deduction has been doubled, from €12,000 to €24,000 for singles and from €24,000 to €48,000 for married couples filing jointly.

This means that most people will no longer have to itemize their deductions. Additionally, the marginal rate for individuals has been lowered from 41% to 37%. This means that if your income falls below a certain level, your effective tax duty decreases.

For example, if your income is €40,000 and you are taxed at 37%, your tax bill would be €7,500. If your income falls below €33,000 ($38,600 USD), your effective tax percentage decreases to 33%. Another change that affects individuals is the elimination of the corporate tax rate of 25%.

This will increase the cost of doing business in Spain for some American companies and could lead to job losses in Spain. On the other hand, businesses will now be able to deduct all expenses associated with doing business

– including taxes, insurance premiums, and employee salaries

– which should make it more competitive to do business in Spain. Overall, while there are a lot of details still to be worked out, these changes appear to favor individuals over businesses.

What are the Penalties for Not Paying Taxes in Spain?

In Spain, taxes are payable on all income earned, including salary, dividends, and other forms of income. Failure to pay taxes can lead to penalties and fines. Penalties for not paying taxes can range from a simple fine to imprisonment.

Fines for not paying taxes can be as low as €250 (US$300) or as high as €5,000 (US$6,400). Penalties for not filing tax returns can also be severe, with fines ranging from €10,000 (US$12,700) to €500,000 (US$600,000). In some cases, failure to pay tax can lead to the seizure of property.

Taxes in Spain are relatively high compared to other countries in Europe. The highest marginal tax duty in Spain is 54%. This means that anyone earning more than €54,550 ($62,100) per year will have to pay tax on income. For people earning below this threshold, the marginal tax tariff is 23%.

About the Author(anyexpat)

Quick Intro, I am Kenny and I am from sunny Scotland. I have experienced the Expat specific challenges of all aspects of moving and living in several countries over the years. Having previously built large online networks I created a single Facebook Group called "Expats In Italy" as this is what I was at that time. This single group has grown to many, with the groups focus being to help people save Time, Money, Effort and Stress in their relocation journey. My focus and that of AnyExpat is on Legal, Financial and Real Estate services, rather than offer advice myself (I do not) instead I have curated a highly qualified, English Speaking network of professionals who are standing by to assist you.

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