Taxes in Spain
Do expats pay taxes in Spain?
The most basic tax that expats must pay in Spain is the income tax. The income tax is calculated upon the expat’s worldwide income. However, if you are a Spanish non-resident, the income tax is calculated just upon the income generated in Spain.In this section, we will answer that question. We’ll see what exactly are the taxes in Spain for expatriates during 2020. If you want specific information about certain types of taxes in Spain, you can click the following links:
need help filling your taxes? contact us!
Taxes in spain for non residents
So how do I know if I am a tax resident in Spain?
- You live in Spain more than 183 days per year (note that the days do not have to be consecutive to count as effective).
- You have economic interests in the country, which means that you carry out your professional activity in Spain, either working for a company or working as a self-employed person.
- Your spouse and/or children live in Spain.
CAPITAL GAINS TAX IN SPAIN OR INCOME TAX.
- Wages earned as an employee and what you earn as a self-employed person through your bills;
- Capital gains from, for example, dividends; and pension contributions and benefits.
Paying non resident tax in SpainIn that case you are non resident in Spain, that’s good news for you: you will only have to pay income tax on the income you have generated in Spain, and that will be all. The tax rates in spain for non residents are fixed at 25% on the gross income (not as with the income tax for residents, which is progressive). It is the so-called non-resident tax in Spain. Suppose, for example, that you live in the UK but have a property in Spain. In that case you will only be taxed on all the income you generate by renting the property on the Peninsula. The bad news is that you will not be able to deduct any expenses in this scenario.
How much income tax do you pay in Spain as a resident?
- Below the first €12,450 you earn, you will pay 19% of the income tax.
- From €12,450 to €20,200, you owe the Spanish Tax Agency 24%.
- From €20,200 to €35,200, 30%.
- From €35,200 to €60,000, 37%.
- And above 60,000 €, 45%.
Is there a tax-free allowance in Spain?
Residents in Spain have the right to different Spanish tax deductions. The general personal allowance for everyone under the age of 65 is set at €5,550, or €6,700 from age 65, and €8,100 from age 75.In the case of families with children under 25, where all family members share the same home, it’s possible to claim the following additional allowances:
- €2,400 for the first child
- €2,700 for the second child
- €4,000 for the third child
- €4,500 for the fourth child
- Payments into the Spanish social security system;
- Pension contributions;
- The costs of buying and renovating your main home;
- Charitable donations