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Personal Tax Spain - Personal Spanish Taxes

Our qualified Spanish tax experts provide advice and assistance for Spanish residents, non-residents, self employed and employed persons

Personal Spanish taxes explained:

Non-residents
If you are employed or receive a regular income in Spain, you are considered to be a “fiscal resident” in which case this section does not apply to you, please see the next sections below.

If you do not live in Spain and are not a “fiscal resident” but possess Spanish property or assets, you must pay the appropriate taxes on these, even if you pay income tax, capital gains tax etc. in your home country.

Moreover, all non- residents in Spain, regardless of nationality, are obliged to have a Spanish fiscal representative. 

Taxes applicable to non-residents are, for property owners:  IBI, net wealth tax and capital gains tax.  (For taxes payable upon a property purchase or sale, please see section below).

Other taxes include savings income tax, wealth tax, inheritance and gift tax.  For more information about how these affect you, please contact us.

Residents
If you are employed or receive a regular income in Spain, you are automatically considered to be a “fiscal resident” and treated as a Spanish resident in term of taxes payable.

Employed persons

Any individual in possession of an employment contract will have a social security and income tax retention made on their behalf by their employer.  Although this bears some similarity to the UK system, employees must be aware that, unlike the PAYE system, they are obliged and solely responsible for the completion of an annual tax return.  Certain tax deductions can be made for business travel and expenses etc.  For more details, please contact one of our qualified tax advisors.

Any further income from savings, property etc. is also taxable.

Autonomos/Self-employed

Autonomos (or self employed individuals) must make their own social security and income tax payments.  It is especially beneficial to use an accountant for these as there are many saving that can be made by retaining receipts and bills and offsetting taxes etc.

Property taxes

When selling or buying a property, the following taxes are applicable:

IVA: This is the Spanish equivalent of (VAT).  It is charged at the rate of 7% on a new property and paid to the developer/ promoter.  If purchasing a property form an independent vendor (i.e. a second hand property), there is no IVA payable but it is replaced by Transfer Tax which is also charged at the rate of 7%.

Stamp duty: This is payable at the rate of 1% upon completion of the property purchase

IBI: This is the closest thing to council tax in Spain, is payable annually and is usually organized by your accountant.

There are other costs involved in the purchase of a property, such as legal, notary and registry fees but these are not taxes and therefore not listed here.  Your accountant or lawyer can, however, calculate all purchase costs for you prior to completion.