What are the taxes in Spain?

If you are going to work or study in Spain, then you probably need knowledge about its tax system. Every year, everyone who lives in the country is required to file a tax return. You can read more about what taxes in Spain exist and how they can be reduced in this article.

Types of Fees

Spain is a country with a mild and warm climate, which has been enjoying special love among tourists around the world for many years. And how many people dream of moving to it! You can emigrate here, but it is quite difficult to do. Therefore, many people prefer to just buy real estate so that you can from time to time spend a vacation in Sunny Beach. It doesn’t matter if you are going to temporarily live in Spain or buy an apartment in this country, you still need to pay taxes in order to be able to return to this wonderful land again. What taxes are there in Spain?

• Income - is the most basic and applies to all types of profits.
• Tax for couples.
• Property tax. If you purchased real estate or a car in the country, then every year you will be required to pay tax for it. This rule applies to both residents of Spain and non-residents and foreigners.
• Inheritance tax and gifts.
• VAT.
• Corporate tax.

For the most part, Spain has the same list of laws as in Russia. But still there are significant differences that relate mainly to the amount of fees. How much is income tax in Spain? The rate varies depending on the level of income and ranges from 19 to 45%.

Tax return

The tax year in Spain follows the calendar year: it starts on January 1 and ends at the end of December. Both residents and non-residents who receive income in Spain are taxed. For convenience, taxes are divided into two types: total income and income from savings. Therefore, it doesn’t matter if you get profit from a business or from interest in a Spanish bank, this amount will still be taxed. The tax rate in Spain is progressive and depends on how much you get:

• Up to 6,000 euros, the rate will be 19%;
• If a person receives from 6 to 50 thousand euros, then he will need to pay 21% to the treasury;
• If the income exceeds 50,000 euros, then in this case the rate will be maximum: 23%.
  

The tax return must be submitted every year, until June 30, if you are a resident of Spain. If the deadlines for filing a tax return are not met, then you may receive a late fee penalty. The usual amount is 100 euros, but may increase if you delay the payment of taxes for more than a few months. If the delay exceeds three months, then the penalty will already be 20% of the amount owed.

How can I file a tax return? The easiest way to do this is online, but you can fill out the necessary documents at the tax office.

Taxes for non-residents

Taxes for residents and non-residents in Spain are slightly different, and this is important to consider. Who is considered a non-resident of the country?

• A person staying in Spain for less than 183 days a year.
• A person who does not have a business in the country.
• A person whose spouse or minor children do not live in Spain.

Taxes in Spain for non-residents averages from 19 to 24%. If you are a citizen of another EU country, then a reduced rate of 19% will apply to you. If you come from another place, then you will have to pay all 24%. All sources of income are taxed:

• Pensions
• Royalty.
• Profit from the increase in capital.
• Investment projects and dividends.

VAT

Value added tax is classified as an indirect tax on consumption. Almost all goods are subject to VAT, with some exceptions. The rates of this tax are 21, 10, 4%. The lowest interest rate applies to basic necessities: vegetables, bread, fruits and other goods from the grocery basket. Other foodstuffs, travel in public transport, as well as medical services are taxed at a higher 10% tax. All other categories of services and goods fall under a rate of 21%. Each person who came to Spain as a tourist can receive a tax deduction on goods purchased when leaving the country. Therefore, if you are going to Spain for shopping, do not forget about this advantageous bonus.

Business Tax

This fee is charged on the income of legal entities and enterprises. Therefore, it is necessary to worry about it only to those who have business in Spain. According to the law, the tax rate ranges from 25 to 30% and depends on the region in which the company is registered. The highest bid is in Navarra and the lowest is in the rest of Spain. Also, businessmen have the opportunity of preferential taxation at a reduced rate of 20 and 15%. Who has such benefits?

• Enterprises that have just started their activities (newcomers to the market).
• Legal entities registered in the Canary Islands.
• Unprofitable companies that have not received any profit in a year. In this case, the state generally exempts them from tax.

Business Tax

In Spain, there are several taxes that affect solely legal entities. A business tax is a regional tax that applies to all corporations that conduct economic activity. However, in practice, such a tax is charged only to large companies whose profit for the year exceeds one million euros.

Another interesting tax that exists in Spain is the stamp duty, which applies to legal acts and documents. It is charged for transactions that require notarization. Thus, for example, when selling real estate, you will be required to pay tax not only for the apartment or house, but also for the registration of legal documents.

Tourist fee

Even if you are going to just visit the country for tourist purposes, you still have to pay a city tax in Spain. This is a fee that is charged by the local authorities of large tourist centers. A tax for tourists in Spain has been introduced in Catalonia and applies to hotel and hostel accommodation. For example, for five-star hotels the tax is 2.25 euros, and for campsites - 0.65 euros. However, certain categories of tourists are exempt from paying this tax:

• Residents of the European Union.
• Persons under 15 years old.

In addition to the tourist tax, each person who will purchase food or clothing in Spain, as well as pay for various services, will need to pay VAT, which is about 21%. The good news is that you can arrange TaxFree at the airport. But VAT can be returned only from those things that you can take with you (clothing, electronics, jewelry, etc.).

Spain income tax

Fees in Spain are diverse and often require good knowledge of the tax structure of this country. Serious fines and penalties can be obtained for their non-payment, up to the restriction of entry or exit. One of the most important taxes in Spain is income tax. It applies to absolutely all types of profit that an individual or legal entity can receive. If you live in Spain for six months (183 days) or more than a calendar year, or if your family or business is in this country, then you are considered a resident and must pay taxes based on this. In order to avoid various fines, you need to file a tax return every year in the following cases:

• Your annual income is more than 22,000 euros.
• You get rental income of more than 1000 euros per year.
• You have income from deposits that bring you more than 1600 euros per year.
• You are an individual entrepreneur or owner of your own business.
• You are a resident of the country for the first year and file a tax return.
  

If you are a resident of the country, you will also have to inform the state of all assets abroad worth more than 50,000 euros. Subject to taxation is the income remaining after payment of all deductions (social, pension). In Spain, income tax has a progressive rate, so its value directly depends on what income you receive.

Non-residents are also responsible for any income that was received in Spain (cash deposit in a Spanish bank, property or any business in the country). Income tax in Spain for non-residents ranges from 2 to 24%. He is also progressive.

If you are a resident of the country, then in this case the tax rate on dividends in Spain can be from 19 to 45%:

• Income up to EUR 12,450 is taxed at a minimum rate of 19%.
• If you get more than 66,000 euros, then your rate will be 45%.

Property tax

In the event that you own property and live in Spain, you will pay a tax on local property called Impuesto sobre Bienes Inmuebles (IBI). How to calculate its amount? To do this, multiply the cadastral value by the tax rate established by the authorities. On average, it is about 0.7%, but can reach up to 1.1%. It should also be borne in mind that the cadastral value may be several times lower than the real one, so on average land owners pay about 500-800 euros per year. What taxes do I have to pay in addition to property tax in Spain? When calculating, it is also necessary to take into account utility bills and garbage collection tax. Their size will directly depend on the prestige of the area and the availability of various amenities on the territory (pool, trees, elevator). The range of taxes can vary greatly, starting from 30 and reaching up to 1300 euros. In the event that you decide to rent out your property, you will have to pay 24% of the income. The tax must be paid every quarter and not delay in filing declarations.

In Spain, it is quite profitable to use car rental. But if you are going to get a residence permit or purchase vehicles to move around the country, then in this case you will also have to pay the state tax.

The tax on cars in Spain is 21% for those who decide to buy a new car and about 14% for those who buy a supported one. But in addition to this, it will be necessary to pay a registration fee for the vehicle, which will depend on the amount of CO ₂ emission into the atmosphere. And every year you will need to pay the transport tax. It usually amounts to 100-150 euros. In the event that you decide to sell the car, you will also need to pay income tax. So a car in Spain is not a thing that everyone can afford.

Wealth tax

The crisis in Europe made the Spanish government think about introducing additional fees that could replenish the state treasury. This time, the owners of expensive assets and luxury goods became the “victims” of the new fees. The main criterion for calculating such a tax is the value of property in excess of one million euros for residents or 700 thousand euros for non-residents of the country. The rate depends on how much the value of the property exceeds the reference point. The tax rate on average ranges from 0.2 to 2.5 percent.

Buying a property

Buying property in Spain attracts many people because, as a result, you not only get property abroad, but also invest in a liquid project, because you can always rent an apartment or house. When buying real estate taxes are required to pay both the seller and the buyer, it does not matter whether you are a resident of the country or do not live in it permanently. There are several fees associated with the sale of an apartment or house:

• Value Added Tax (IVA). This tax when buying an apartment in Spain is paid only if a person purchases a new apartment from a construction company. The rate is about 10%.
• Property Transfer Tax (ITP). Paid if you purchase housing in the secondary market. The value of this collection is usually from 6 to 10%.
• Housing tax in Spain also includes income tax. It must be paid if you are selling property. As in Russia, the tax is calculated on the basis of the amount received on the difference in the purchase and sale prices.
• Stamp tax is payable by the buyer. Each region has a different rate - from 0.1 to 2% of the total cost of housing.

The gift tax in Spain ranges from 7 to 32% of the amount of real estate. Therefore, many prefer not to issue a gift certificate, but to draw up a contract of sale. This often comes out much cheaper and faster.

Self-employed citizens and students

If you came to Spain in order to study, then you still have to pay income tax from your funds in the same way as all other residents of the country. However, you can claim minor exceptions and additional cash benefits based on your status. After all, as a rule, students can work only for a limited amount of time, which is why they receive little money. But the main benefits that students can apply for do not apply to taxes and apply to tickets and visits to social and cultural facilities (museums, theaters).

Some of the foreigners who come to Spain for a living do not work officially, but under a contract of employment. If you find out your situation, then keep in mind that in this case you are required to file a tax return in the same way as other Spanish citizens.

How to avoid double tax?

What taxes do foreigners pay in Spain? Exactly the same as the citizens of this country, except that the tax rate is slightly different. But if you plan to become a resident of Spain or move to permanent residence, then you need to think in advance about how to avoid double taxation. If you leave your country in the middle of the tax year and continue to receive income on its territory, then you will pay deductions not only to its treasury, but also to the treasury of Spain. But Spain has signed a double tax treaty with some countries. These include Russia, Poland, Slovenia, Switzerland, the USA and many other states. All you need to do is to notify the tax on time of a change in your place of residence.

Expert Advice

If you want to save your money and pay as little taxes as possible, the first thing you need to do when you arrive in Spain is to learn the language of the country. There are many open sources where you can easily find comprehensive information, but it is better to study it in Spanish in order to avoid misunderstandings. Also a reasonable way to resolve all misunderstandings with the tax can be considered a search for accountants and lawyers in Spain. They are familiar with all laws and can settle all bureaucratic delays.

If you work in Spain under a contract of employment or are officially registered as an employee of an organization, then your situation is quite simple. All taxes are withheld and paid by the employer, and you already get a net profit on hand. The Spanish tax system works in such a way that this amount exactly matches your income level. However, despite the fact that your employer pays deductions from wages, you still need to file a declaration yourself every year.

If you work as an individual entrepreneur, then the amount of taxes will directly depend on the size of your income and on how many employees you work for.

Summary

What is the percentage tax in Spain? Although the tax system in Spain differs in details, it is mostly very similar to the Russian one. Therefore, if you decide to move, then you should not have great difficulties. The main thing is to file a declaration on time and find out on site what deductions you need to pay. In Spain, taxes are divided into state, regional and local. A lawyer or accountant can help you figure it out, but you can easily and independently find the information you need.