Spain Explained

Deductions and tax allowances in Spain

Last updated on April 30th, 2020 at 05:05 pm.

In this article we will go through deductions and tax allowances in Spain. However, we would like to remind you that taxation in Spain can be complicated and you could be subject to fines or penalties if you miss a deadline or don’t do your taxes properly. Advisably, you should seek fiscal advice from an expert to avoid possible complications.

Tax allowances in Spain

Tax residents in Spain are entitled to certain allowances and deductions.

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Basic personal allowances

Similarly to the UK, every resident has a basic personal allowance, which rises depending on your age. In 2019:

  • every person under 65 has a basic personal allowance of €5,550
  • then €6,700 from 65
  • and finally €8,100 from 75. 

Married couples allowances

If you’re married, you can choose to be taxed separately or as a couple. In Spain, there is a married couples allowance (declaracion conjunta) of €3,400 for the second taxpayer, in addition to an allowance of €5,550 granted to the first. However, you should compare the rate you’ll pay as individuals and as a couple, as it’s not necessarily more advantageous to file together.

Tax deductions for dependants

You can also claim tax deductions for dependants. If you have children under 25 living with you, you can claim the following additional allowances:

  • €2,400 for the first child.
  • €2,700 for the second.
  • €4,000 for the third.
  • €4,500 for the fourth.
  • An extra allowance of €2,800 for each child under three years.

If you have an elderly relative living with you and your total income is less than €8,000 you can claim an allowance of €1,150 if they’re over 65 and €2,550 if they’re over 75.

Other deductions and tax allowances in Spain

Generally, you can also claim deductions and tax credits for:

  • Social security contributions (deducted at source by an employer).
  • Pension contributions.
  • Mandatory contributions to mutual benefit societies for widows, widowers and orphans upon the death of the participant.
  • An allowance for working mothers of up to €1,000.
  • Subscriptions to unions and professional societies of up to €500.
  • Legal defence expenses up to €300.
  • Allowable work expenses of up to €2,000.
  • A certain percentage of charitable donations, depending on the nature of the organisation.

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Exactly how much you can claim in deductions and tax credits will depend on your personal circumstances. For a complete picture of what you’re entitled to, consult with an expert.

Ábaco Advisers have assisted our clients with all their Spanish legal and tax obligations for more than 20 years. To ensure you’re armed with all the information you need, book a free consultation at one of our offices. We can provide you with the information you need according to your individual circumstances.

In this article we have covered the deductions and tax allowances in Spain, but if you would like more information regarding the taxes you need to pay as a resident or as a non-resident, you could visit those articles:

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Craig Black

14 March, 2021 6:51 pm

Hi, my fiancée and I are looking into retiring to Spain and becoming residents. We would be married by then and both of us would take incomes from separate drawdown pensions. Would we be better being taxed singly, rather than as a married couple?
I understand we would both have a tax allowance of 5,500 euros pa, is that correct?

Oscar Paoli

16 March, 2021 3:02 pm

Hi Craig,

The Tax Allowance is 5.550 € on individual declarations and on joint 5.550 € plus 3.400 € joint however until a Tax declaration is completed you can not say if it is better one way or another.

Hope this information is useful for you.

With kind regards,

Ábaco Advisers

Eileen Wilson

8 June, 2021 7:42 am

1. Does the rent I pay on a property in Spain increase my personal allowance? In other words, if my personal allowance before tax is 5500€, is this increased by the amount of rent I pay?

2. Also, if I am taxed on my occupational and state pensions in the UK, can I be taxed again in Spain?

Oscar Paoli

8 June, 2021 10:34 am

Hi Eileen,

The personal allowance does not change it is a flat rate of 5.550 €.

As a residents in Spain you are Taxed on your Pensions here as part of your Worldwide income, and there is a process to stop paying Tax in the UK, which can be started once you have presented your first Tax declaration here.

Please do not hesitate to contact us should you have any further queries.

With kind regards,

Ábaco Advisers