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Spanish Income Tax Calculator for expats and pensioners. Non Resident Tax, Income Tax – 2024

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(updated Jan. 2024 source: spanishtaxcalculator.com)

Spanish Income Tax for individuals in Spain

1.- Base of the Tax – Incomes and property rentals 

The taxable event is made up of all the incomes received during the NATURAL YEAR (in Spain a “Natural Year” is from 01.01 to 31.12):

– Individuals or particulars, with tax residence in Spain.

What types of incomes?: Salaries, pensions, rental income, income from economic or professional activities, gambling profits, donations, sales, inheritances, shares, interests, etc.

2.- Who is Tax liable?

All those natural persons who have their habitual residence in Spanish territory.

When is it considered that an individual or individual has their habitual residence in Spain?

There are several criteria to determine when a person is a tax resident in Spain:

A person is considered a resident of Spain when he or she remains in Spanish territory for more than 183 days during a calendar year.

In order to count the time, temporary trips or stays abroad that do not imply a change of residence are not taken into account. In other words, only those stays abroad that involve a real change of residence will be considered as “absences” for this purpose.

In this way, a round trip abroad, whether on vacation, health, visiting relatives, leisure, etc., will not count as “absence”, and the time involved in the trip will be counted as “stay in Spain”.

Case of Tax Havens: For these purposes,  a certificate of residence issued by a Tax Haven will not be valid.

However, if there is a “real” change of residence of the taxpayer to a Tax Haven, once this change is verified for more than 6 months and one day, for FOUR YEARS it will continue to be taxed in Spain as a tax resident.

For Spain, a “Tax Paradise/Haven” ceases to be so when Agreements have been signed to avoid double taxation, with the exchange of information obligations between the two countries.

As an example, Spain has been signing this type of agreement with the following countries:

Criterion of MAIN economic activity

By means of this criterion, a tax resident in Spain is considered to be anyone who has activities or economic interests with the main nucleus or base in Spain.

In the event that the taxpayer does not wish to be considered as a resident in Spain based on this criterion, he will have to prove that he has the base or main nucleus of his activity outside of Spain.

A person is considered resident in Spain in the event that the non-separated spouse or minor children of the natural person reside in Spain.

Those workers who remain in Spain only and exclusively for work reasons, will be exempt and will not be taxed by the Income Tax of Individuals, but by the Income Tax of NON-RESIDENTS (which is lower than the Tax of Residents).

For this exemption to be fulfilled, these people must prove:

The objective of this regime is to welcome qualified labor in Spain, since, since income is not subject to personal income tax, which reaches rates close to 50%, it allows these income to be taxed to IRNR (Non-Resident Income Tax ), with a fixed rate of 19% for nationals of the European Union, and 24% for the rest.

In addition to “natural persons” or “individuals”, there are several cases that are also subject to the tax:

  1. Civil societies
  2. Communities of owners
  3. Reclining inheritances

In these cases, the income obtained by these entities is attributed to the members that make them up, so that the entity itself is not taxed either by personal income tax or by corporation tax.

The way to attribute the income obtained by these entities to their members or participants is done as follows:

3.- Income Tax exemptions

There is a long list of income that is not taxed by personal income tax, such as compensation in the event of dismissal (the first 180,000 euros are exempt, the rest must be taxed as work performance); scholarships for studies, income from work abroad (the limit for exemption is 60,100 euros per year), or payments for maternity or paternity.

Fiscal year 2023:

Below we present a list of income exempt from taxation in personal income tax:

Exempted capital gains

In addition, there are income obtained through Capital Gains that are exempt from the tax, such as: Donations of goods with the right to a deduction in the quota or the transfer of the habitual residence by people over 65 years of age or in situations of great dependency.

Among them, we list the following:

Earnings or income from work abroad

We want to make special mention of income from work abroad.

In these cases, those income obtained from work income received as a result of work actually carried out abroad for a company or entity not resident in Spain, or a permanent establishment located abroad, are considered exempt.

For this exemption to apply, the following are required:

Minimum Amount Exempted 

Spanish system establishes a certain amount non taxable. This amount is:

Regional bonifications on acquisitions on Reform/Acquistion/Re-investment on  Permanent Residence 

Depending on the Spanish region, you may find different reductions and bonifications on the Income Tax on the acquisition of a house for living permently, or for special reforms (to reduce energy, etc.).

Here we find some of them:

Andalusia

-For beneficiaries of aid to protected house: a deduction of 30 euros for citizens who have received aid or benefit for the acquisition or rehabilitation of protected housing. The total annual income of the family unit may not exceed 2.5 or 3.5 or 5.5 times the Iprem in protected housing of special, general and limited price regime, respectively.

-Investment in protected habitual house: 2% of the amount invested in acquisition and / or rehabilitation is deducted with the limits of the previous section and with the condition that they are operations prior to 2003.

-Investment in habitual residence for children under 35: Deduction of 3% for the amounts paid for purchase or rehabilitation in operations before 2003. The sum of the general tax base and that of savings cannot exceed 19,000 euros in individual taxation and 24,000 in joint.

Catalonia

-Rehabilitation of habitual residence: 1.5% of the amounts paid with a limit of 9,040 euros.

-Regional section for investment in habitual residence: a deduction of 7.5% in general and rises to 15% with the rehabiilitación of homes for people with disabilities. In general terms, it rises to 9% for works before July 30, 2011 in people aged 32 years or younger, with at least six months unemployed, 65% disability or being part of a family unit with a child. The limit is 30,000 euros of total tax base minus the personal and family minimum.

Community of Valencia

-First acquisition of habitual residence with 35 or less years: the deduction is 5% of what was paid (except interest) if the total tax base does not reach 15,039.18 euros.

-Acquisition of habitual residence by people with disabilities: same deduction and same limit for people with physical or sensory disabilities of at least 65% or psychic of at least 33%.

-Aid for the acquisition or rehabilitation of a habitual residence: people who have received this type of aid can deduct 102 euros.

Murcia

-For investment in habitual residence by young people of age equal to or less than 35years: the deduction is 5% of the expenses of acquisition, construction, extension or rehabilitation, including others such as external financing, interest, amortization … provided that the total tax base does not exceed 24,107.20 euros and the taxable base of savings does not exceed 1,800 euros.

Balearic Islands

-For investments to improve the sustainability of the habitual residence: 50% of the investments “that improve the quality and sustainability of the homes” with a maximum base of 10,000 euros per year. The total tax base must not exceed 30,000 euros in individual taxation and 48,000 in joint taxation.

Joint Declaration – Tax reduction

Members of the same family may opt to present the Income Tax declaration “joined”. This will reduct the amunt of 3.400 EUR, or 2.150 EUR in case of monoparental families.

Opting for joined or separate declaration will depend on the individual result of the tax from each member of the family.

For this, it is very important to know that the “Minimum Amount Exempted” per person will not be multiplied by 2 in case of joint declaration. This reduction will be just 5.550 EUR from the base of the tax.

So, taking this into account, some examples:

As a general rule, the personal income tax return is filed individually. However,  if you are married – although the Spanish Tax office  also recognizes other types of family unit – you can choose to declare jointly, provided that all its members aretaxpayers of this  tax.

Remember that for the Tax office. a family unit is :

But do not forget that opting for this modality one  fiscal year does not force you to do it in successive ones. Of course, in the fiscal year that this  option has beenchosen, it can only be modified within the regulatory deadline for filing returns.

Characteristics of the joint declaration in the 2020 Income Tax

Advantages of making the joint declaration in the Income 2023

Although each case is unique (depending on personal and economic circumstances), this modality coudl be interesting in the following cases:

Disadvantages of making the joint declaration in the Income 2023

As a disadvantage of this modality, it is important to know that the Tax office may decide to compensate in accordance with the rule of the negative items of previous periods not compensated by the taxpayers who form the family unit regardless of whether they come from a previous individual or joint declaration.

Advantages of making the individual declaration

Does having children influence making an individual or joint declaration?

There are no major differences between joint and individual declarations, since the reduction is the same for children and, in the case of opting for the individual, each one imputes 50% of the reduction.

In case of mortgage,is it better to make the individual or joint declarations?

For purchases of properties – those that constitute the habitual residence– that were made before January 1, 2013 (after 2013 there is no bonus),  each  holder  of a mortgage loan  is entitled to a deduction of  15%  on the amount paid over a year, with a limit per  taxpayer  of 9,040 euros.

In the individual declarations,  each of them can benefit from the deduction for the purchase of a habitual residence of 15%,  with a limit of 9,040 euros. That is, between them they can reach 18,080 euros of  relief. If the joint declaration is chosen, the 15% deduction would only be applied on a maximum of 9,040 euros for the two members.

4.-  Tax Base

The taxable base of the tax will be those income from:

  1. Income: Salaries, capital income, activities, and allowances, pensions, payments in kind, etc.
  2. Income from Capital Gains, and imputed income.

To begin with, income must be classified and quantified according to its origin, thus distinguishing between income from income, income from capital gains and losses, and imputed income.

5.- Deductible expenses 

The following concepts can be deduced:

Tax base reductions

A series of reductions will be applied to the amount resulting from subtracting income and yields – deductible expenses, which are established each year by the Spanish administration.

6.- Tax Rate

TAX RATE FOR REGULAR INCOMES

Incomes Tax Rate
Up to 12.449 € 19 %
12.450 – 20.199 € 24 %
20.200 – 35.199 € 30 %
35.200 – 59.999 € 37 %
60.000 – 299,999 € 45 %
+ 300.000 € 47 %

TAX RATE FOR SAVINGS

Incomes Tax Rate
Up to 6000 € 19 %
6000 – 50.000 € 21 %
50.000 – 200.000 € 23 %
200.000 – 300.000 € 27 %
 + 300.000 € 28 %

Official site Spanish Tax office

Some FAQ’s 

How are pensions taxed?

In relation to Spanish personal income tax, pensions are considered as income from work and, as such, are subject to withholding before the Treasury, the pensioner receiving their net amount in their checking account. In this way, the withholding is a “payment on account” of the final personal income tax.

What is the retention percentage?

This percentage depends on two conditions:

Minimum exempt from pensions

All pensions that do not exceed 22,000 euros in annual income are exempt from declaring personal income tax, as long as they come from ONE SINGLE PAYER (usually Social Security).

However, in the event that the pensioner obtains other income derived from work income, or other public or private pensions, that is, that he has TWO PAYERS, and that this income is greater than 1,500 euros per year, the exempt minimum will be of 14,000 euros.

Withholdings for pension tranches

They are as follows:

Once the final personal income tax declaration has been made, the pensioner will be in one of two situations:

Pensionists/Retired UK citizens in Spain 

DOUBLE TAX CONVENTION SPAIN- UK  of March 14, 2013 (BOE of May 15, 2014)

In a simplified way, taking into account the provisions of the Agreement between Spain and the United Kingdom (CDI), the taxation for TAX RESIDENTS in Spain of the income of BRITISH ORIGIN most commonly obtained would be:

– Pensions: understood as remunerations that have their cause in a previously exercised job, they have different treatment depending on whether they are public or private.

Its treatment is:

  1. In general, public pensions will only be taxed in the UK. In Spain they would be exempt, with exemption progressively. This means that if the taxpayer is obliged to file a tax return for obtaining other income, the amount of the exempt pension is taken into account in Spain to calculate the tax applicable to the remaining income.
  2. However, if the beneficiary of the public pension resident in Spain had Spanish nationality, the aforementioned pensions would only be taxed in Spain.

Private pensions will only be taxed in Spain.

Incomes derived from real estate (article 6 CDI): income from real estate located in the United Kingdom can be taxed in both Spain and the United Kingdom.

The resident taxpayer would have the right to apply the deduction for international double taxation in Spain in personal income tax.

– Dividends (article 10 CDI): British source dividends may be taxed in Spain in accordance with its internal legislation. These dividends, in general, can also be taxed in the United Kingdom, if this is the State in which the company that pays the dividends resides and according to its internal legislation, but if the recipient of the dividends is the beneficial owner residing in Spain, the The tax thus required in the United Kingdom will have a maximum limit of 10% or 15% of the gross amount of the dividends. The resident taxpayer would have the right to apply the deduction for international double taxation in Spain in personal income tax up to that limit.

– Interests (article 11 CDI): Interests from the United Kingdom and whose beneficial owner is a resident of Spain, can only be taxed in Spain.

– Remuneration of members of the boards of directors of companies resident in the United Kingdom (article 15 CDI): They can be taxed both in the United Kingdom and in Spain. The taxpayer would have the right in Spain to apply the deduction for international double taxation in personal income tax.

– Capital gains:

Obligation of information/declaration of assets abroad  

People residing in Spain must inform the Spanish Tax Administration about three different categories of assets and rights located abroad:

This obligation must be fulfilled, through form 720, between January 1 and March 31 of the year following that to which the information to be supplied refers.

There will be no obligation to report on each of the categories of goods when the value of the set of goods corresponding to each category does not exceed 50,000 euros.

Once the informative return has been submitted for one or more of the categories of goods and rights, the presentation of the statement in subsequent years will be mandatory when the value has experienced an increase of more than 20,000 euros compared to that determined by the presentation of the last statement .

The Personal Income Tax Law and the General Tax Law establish specific consequences for the case of non-compliance with this information obligation.


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