Spain Explained

What are the different tax brackets in Spain?

Tax brackets are a familiar concept across most European jurisdictions and tax brackets in Spain follow a similar basic principle. In Spain, the amount of income tax you pay will depend on the amount of money you earn. These earnings are divided into groups, with the percentage of tax you pay ascending the more you earn. In this article, we summarise the Spanish income tax system and detail the different tax brackets in Spain.

However, we would like to remind you that taxes 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.

New Call-to-action

Do I have to pay income tax in Spain if I do not live there full time?

Whether or not you pay income tax in Spain will depend on your residency status. However, it is important to be aware of the Spanish definition of a resident. If you live in Spain for more than 183 days per calendar year, then you are classified as a resident. Remember, these 183 days do not need to be consecutive, so you cannot argue that you do not need to pay income tax because you only stay intermittently.

Note that non-residents are still liable for some tax, mostly associated with property. Take a look at this guide to find out more.

Income tax in Spain

The vast majority of Spanish residents are liable for taxes and have to submit a tax declaration. This declaration is made annually, usually before the end of June and then paid before the assigned deadline. The self-employed, or autonomos, also submit their declaration annually but have to pay their taxes quarterly. The only instance within which you do not need to submit a tax declaration or pay income tax in Spain is if you have one pension worth less than €14,000 depending on circumstances. 

The charges are retrospective, so will cover last year’s earnings. The document will have to cover your worldwide income, including any gains from employment, rental properties, savings, dividends, property sales or any other assets. 

If you have retired in Spain, then you will be taxed on your pensions, however, some pensions come under governmental employment and are treated differently under double taxation treaties, and the figure will be taken into account when calculating your tax band.

Tax brackets in Spain

Like Britain, Spain has a ‘personal allowance’ on which you do not pay income tax. However, it is much smaller. The personal allowance is as follows, depending on your age and whether or not you have a disability recognised by the Spanish Authorities:

General personal allowance€5,550
Married couples allowance for joint declarations€3,400
Deductions for work-related expenses€2,000
Over 65s+ €1,150
Over 75s+ €1,400
Incapacity allowance+ €3,000
Incapacity allowance for over 65s+ €9,000

Due to the size of the personal allowance, the vast majority of residents are liable for some income tax. The table below details the different tax brackets in Spain:

Up to €12,45019%
From €12,450 to €20,00024%
From €20,200 to €35,20030%
From €35,200 to €60,00037%
Over €60,00045%
New Call-to-action

Calculating your income tax obligations

The Spanish tax system can be complex. Therefore, it is advisable to hire a fiscal representative to handle your tax declaration. Ábaco Advisers have been assisting our clients with their fiscal obligations in Spain for more than two decades. If you would like a free consultation, without obligation, please fill in this form. One of our team will be in touch to arrange a meeting at a time that suits you. With Ábaco, you can be confident you are fully tax compliant in Spain.

See all

It might be of your interest...

Leave a comment

2 comments

Christine Tucker

30 June, 2020 11:25 am

Excellent news letter as always. Thank you. Can I ask a question about annuities

Are they taxed less when a person is over 70 years old?

Oscar Paoli

30 June, 2020 11:18 pm

Hi Christine,
Thank you for your message.
In this article we explain some of the advantages:
https://blog.abacoadvisers.com/taxes-in-spain/
Should you wish any more details please do not hesitate to contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers