General information
The Personal Income Tax (Impuesto sobre la renta de las personas físicas / IRPF) is a direct tax levied on the income of individuals.
The individual's income may derive either of a dependent work or obtained by means of self-employment: development of a business or professional activities.
The taxable income is determined as the difference between the income earned and the expenses that are deductible according with Spanish Law.
At the moment, only those individuals earning more than € 21,035.42 a year in Spain, are obliged to file income tax returns. Any amout above that involves a progressive tax structure.
The tax period coincides with the calendar year.
This tax is assessed differently for residents and non-residents in Spain.

Non-residents income tax liability
Non-residents are liable for this tax on any income arising in Spain, such as a money deposit with a Spanish bank, a property in Spain, or income derived of any business in Spain. Property owners are taxed on their property income. The tax base is the property cadastral value (valor catastral), which can be found on any IBI ( In Alicante province SUMA BILL). Should you fail to pay this tax, you will be charged and penalized by the Spanish Tax Agency if you try to sell your property.

If you are an Spanish resident
If you are a Spanish resident you will be taxed for your worldwide income, and will be obliged to file income tax returns. It is needed the following information:

INCOME:

1. Earnings from work (wages, salaries, pensions, etc.)
2. Earnings from liquid capital (share dividends, account interests, etc.) and from real estate capital (from leasing of real estate, etc.).
3. Earnings from economic activities (employers,professionals, etc.)
4. Net gains and capital gains loss (by transfer of goods, some prizes, etc.).
5. Legally established imputations of income from ownership of some properties, other than the home, that are leased, etc.)
6. Certificate of Unemployment (if unemployed during fiscal year).
7. Government grants (if any).

EXPENSES:

9. Last Suma bills for personal residence or leased properties.
10. Proof of mortgage or loans (if any).
11. Date of purchase of actual residence.
12. Pension plan contributions.
13. Charitable contributions.

OTHER:

14. Copy of residence and passport.
15. Name and date of birth of dependants.
16. Last year´s income tax return.
17. Certificate of Dissability (if disabled).
18. Copy of Deed (Escritura).
19. Bank account number (to be used only in the event of tax refund).
20. Padron (original). Must be less than three months old and must show date when first padroned ("con antiguedad").
21. Electric and water bills (for the last seven months).

When should you file your income tax return?
Depending on the result of tax return, if the taxpayer must pay, tax declarations shall be filed from the 1st of May to the 20th of June. If the taxpayer is entitled to a tax refund, then this period will be extended up to the 30th of June.

Where should you file the income tax return?
Income tax returns must be filed before the Tax Office of the taxpayer's address. Taxpayers also have the possibility to file their tax return before the Spanish bank where they have an account; provided that they are entitled to tax refund or shall make any payment as a result of their tax declaration.

These are only general guidelines. It is suggested that all technical and legal matters pertaining to taxes be referred to a lawyer for advice, guidance and execution. Pellicer&Heredia Abogados y Consultores Tributarios will be pleased to help you.

For more information and free advice, call us on +34 965 480737 or send us an e-mail to info@pellicerheredia.com