Andalucía Lawyers’ guide to Spanish income tax for Spanish residents for the years 2012-2014.

Am I a Spanish resident?

Individuals become officially resident in Spain for tax purposes if they live more than 183 days of the calendar year on Spanish territory or if the principal centre of activity or physical base of their economic interests is in Spain.

For more detailed information on how tax residency is established or if you are unsure about whether or not you are a Spanish resident, read our article How Do I Know if I’m a Spanish Resident or Non-resident for Tax Purposes?

What must I declare and when?

Spanish residents are taxed on worldwide income therefore you have to declare all earnings, regardless of where they come from. This includes pensions from your home country, with the exception of some civil service pensions. According to the treaty for double taxation, a deduction is applicable to all earnings that are taxed abroad. As a result you will not be taxed twice on the same income. These rules apply even if your income is not paid into a Spanish bank. You are only exempt if your income falls below the established thresholds (see below). Spanish residents have from 1 April 2020 to 30 June 2020 to declare their income from the 2019 calendar year.

How do I prepare my tax return?

Option 1: Contact the Spanish Tax Office and request your fiscal information.

Option 2: We can do it for you. Contact us to enquire about this service or to set up a consultation, either in person or via phone/email.

What are the Spanish income tax allowances and deductions?

Various income tax allowances and deductions are available for Spanish residents. These vary according to the individual’s personal situation:

Age Allowance

• Individuals aged 65 to 75: €6,069.
• Individuals aged 75 and over:  €7,191.

Disability Allowance

The disability allowance is calculated according to a graded scale of disability:

• Grades 33-65: €2,316.
• Grades 65-100: €7,038.
• If third party care is required then an additional allowance of €2,270 applies.

Child Allowance (Under 25 years Old)

Child allowance for under 25s with an income below €8,000 living at home:

• First child: €1,836.
• Second child: €2,040.
• Third child: €3,672.
• Fourth and additional children: €4,182.

Child Allowance (Under 3 Years Old)

• For each child under 3: €2,244.

Dependent Parent Allowance

If your mother or father is living with you and has an income below €8,000:

• Over 65s: €918.
• Over 75s: €1,122.

Earned Income Allowance (Including Pensions)

• Earnings up to €9,180: €4,080.
• Earnings up to €13,260: €2,652.
• A sliding scale applies for income between the two limits.

Dividends

• Receivable tax free up to €1,500.

Deductions

• Cost of principal residence with a mortgage.
• Incomes earned from rent which are taxed on 40% of the net.
• There are also some deductions applied by local governments that vary from region to region.

What are the 2019 tax rates?

Rates for Capital Gains and Investment Income

• Dividends up to €1,500 are tax free.
• €0-€6,000: 21%.
• €6,000-€18,000: 25%.
• More than €18,000: 27%.

Rates for Other Income After Allowances and Deductions

• €0-€17,007:  24.75%.
• €17,007-€33,007: 30%.
• €33,007-€53,407: 40%.
• €53,407-€120,000: 47%.
• €120,000-€175,000: 49%.
• €175,000-€300,000: 51%.
• More than €300,000: 52%.

Local surcharges have been added by autonomous regions such as Andalusia and Catalonia. For example, the income tax rate in Andalusia is 1% higher than the rates in the table above for incomes above €80,000, 2% higher for incomes above €100,000 and 3% higher for incomes above €120,000.

I have a low income, do I have to declare?

The allowable levels of income before a declaration must be made:

• Earned income already subject to employer deductions (if any other incomes amount to less than €1,500): €22,000.
• Reduced limit if earned from more than one employer: €10,200.
• Bank interest and other investment income: €1,600.
• Rent: €1,000.

Our Services

We offer a resident tax advice service for a set annual fee:

tax return

If you would like advice about your tax situation or you’d like us to take care of your Spanish income tax return on your behalf, please get in touch.