Understanding the Spanish tax system is essential for foreigners, whether you're a resident or non-resident. This guide outlines key aspects to help you navigate taxes in Spain.

Tax Overview in Spain

Spain’s tax system is managed by the Agencia Tributaria, with the fiscal year running from January 1st to December 31st. After the year ends, you need to file your tax return, usually between May 1st and June 30th. If you earn less than €22,000 from a single source, you may not need to file a return, but a NIF (Tax Identification Number) is necessary for any legal procedures.

Are You a Tax Resident or Non-Resident?

Your tax residency determines the scope of your tax obligations. You’re considered a tax resident if:

1. You spend more than 183 days a year in Spain.

2. You have economic interests in the country.

3. Your family resides in Spain.

Tax residents must declare their worldwide income, while non-residents only declare income earned in Spain.

Tax Rates in Spain

Personal Income Tax (IRPF)

Income tax is progressive, with rates ranging from 19% to 47%, depending on your income level.

Corporate Tax

The general corporate tax rate is 25%, with a 15% rate for newly created companies for the first two years with a positive tax base.

Regional Tax Differences

Spain’s autonomous regions, such as Madrid and Catalonia, have varying tax policies. Madrid is known for lower wealth and inheritance taxes, while Catalonia has higher rates on certain taxes.

Double Taxation Treaties

Foreigners in Spain may also need to file taxes in their home country. Spain has double taxation treaties to prevent paying taxes twice on the same income. These treaties determine which country has the right to tax various types of income, and often allow tax credits.

Book a Free Consultation to Recieve Guidance On Your Case

Imagine you are a foreigner working in Spain, and wondering to know how the Beckham Law could benefit you? This special tax regime allows eligible foreign workers to be taxed as non-residents, potentially saving you money on income tax.

Take the guesswork out of Spanish taxes and schedule here a free consultation with us to check if you qualify for the Beckham Law and explore other ways to optimize your tax obligations in Spain. Contact us at partners@entretramites.com!