Income Tax Return
Tax residence in Spain: more than 183 days a year or economic interests in the country.
Are you in Spain for more than six months (183 days) of the calendar year or are your main economic interests in Spain? If the answer is yes, then you are considered a tax resident in Spain.
As a tax resident, you will be required to pay Spanish taxes on your worldwide income and assets and will need to file a Spanish income tax return.
At Pellicer&Heredia, we offer a comprehensive and expert service for managing your Spanish income tax return. Our team of tax advisers will ensure that you make the most of the tax deductions and benefits available. With us, filing your tax return will be more accurate and efficient.
Do you need professional help to prepare and file your tax return in Spain?
We handle the preparation and filing of your tax return with the Tax Agency, applying all available tax deductions and ensuring compliance with current regulations. Furthermore, we advise you throughout the entire process to ensure your return is accurate, efficient, and tailored to your specific tax situation.
This service is especially recommended if your tax situation includes:
Self-employed workers or professionals
Owners of several real estate properties
People with financial investments
Taxpayers who work in multiple countries
People who have received inheritances or donations
Foreign residents with international income
Is it mandatory to file an income tax return in Spain?
Not all taxpayers are required to file an income tax return, but there are limits and circumstances that determine this obligation.
General income limits
In general, it will not be mandatory to file a declaration if:
- Their income from employment or pensions does not exceed €22,000 per year.
This limit is reduced to €15,876 when:
- The income has not been taxed at source in Spain.
- They come from more than one payer (two jobs or two pensions)
- The other sources exceed €2,500 per year
Cases in which it is mandatory to declare
The declaration will be mandatory, regardless of income level, when:
- International double taxation exists
- A tax refund is requested.
- Contributions have been made to pension plans
- Housing deductions apply
- There are relevant capital gains or additional income
Types of income declared in the Personal Income Tax (IRPF)
Returns on work
Income derived from employment or pensions.
Returns on movable capital
Bank interest, dividends, life insurance or annuities.
Returns on real estate capital
Income from rentals or second homes.
Returns from economic activities
Income generated by self-employed individuals or entrepreneurs.
Capital gains
Profits derived from the sale of assets, such as stocks, investments or properties.
Income tax brackets in Spain (IRPF)
Personal income tax (IRPF) is a progressive tax, which means that the tax rate increases as income increases.
General taxable base
- Up to €12,450 → 19%
- Up to €20,199 → 24%
- Up to €35,199 → 30%
- Up to €59,999 → 37%
- Up to €299,999 → 45%
- Over €300,000 → 47%
Savings income
- Up to €6,000 → 19%
- Up to €50,000 → 21%
- Up to €200,000 → 23%
- Up to €300,000 → 27%
- Over €300,000 → 30%
Savings income includes interest, dividends, life insurance, annuities, and gains from the transfer of financial assets.
Significant tax deductions in Spain
There are numerous tax deductions that can significantly reduce the amount to be paid.
Among the most relevant are:
State deductions
- 50% investment in newly created companies (up to €100,000)
- Deduction for international double taxation
- 10% for donations to foundations
- Large family
- €1,200 (general)
- €2,400 (special)
Tax deductions in the Valencian Community
- Rental of main residence
- 20% (up to €800)
- 25% if the tenant is under 35 years old
- Self-consumption electrical installations
- up to €8,800 deduction
- Purchase of an electric vehicle
- deduction on a maximum base of €20,000
- Healthcare and welfare expenses (tax updates)
- mental health
- oral health
- prescription glasses or contact lenses
- sports activities
Deductions for energy efficiency in homes
Deductions apply for:
- Reduction in energy demand for heating and cooling → 20%
- Improvement in non-renewable primary energy consumption → 40%
- Energy rehabilitation of residential buildings → 60%
These deductions can be applied to both primary residences and rental properties.
DEDUCTIONS 2024
State income tax deductions 2024
- For investment in primary residence (Mortgages prior to 2013)
- For renting your main residence (Lease agreement and payment by bank transfer or Bizum are required) (NO CASH)
- Deductions for incentives and stimuli for business investment. Taxpayers can fully deduct from their total state tax liability the amount corresponding to the deduction for investment in newly created or recently established companies, as regulated by Article 68.1 of the Personal Income Tax Law.
- Deductions for donations and other contributions
- Deduction for income obtained in Ceuta or Melilla
- Deduction for actions for the protection and dissemination of Spanish Historical Heritage and World Heritage.
- Deduction for rent of main residence. Transitional regime
The amount of these deductions is distributed as follows:
- 50 percent of the total amount is applied to reduce the full state tax liability.
- 50 percent of the total amount is applied to reduce the regional tax liability.
Deductions for energy efficiency improvement works in homes
The following deductions are introduced from October 6, 2021 on a temporary basis, applying in 2021, 2022, 2023 and 2024 for the first two and the third extending to 2025 as well:
- Deduction for improvement works that reduce the demand for heating and cooling. (1) (1)
- Deduction for improvement works that reduce the consumption of non-renewable primary energy. (2) (2)
- Deduction for energy rehabilitation works of buildings with predominantly residential use. (3) (3)
How do these 3 deductions work?
Housing type requirements:
Usual: 1 and 2
All types of housing except those intended for economic activities: 3
Deadline for completing and paying for the work:
From 06/10/2021 until 31/12/2024 (1 and 2)
From 06/10/2021 until 31/12/2025 (3)
When can I claim the deduction?
In the tax period in which the energy efficiency certificate is issued. If amounts are paid prior to its issuance, they will all be included in the period in which the deduction is claimed. The certificate after the works must be issued before 01.01.2025. (1 and 2)
The deduction will be applied in the tax years 2021, 2022, 2023, 2024 and 2025, in relation to the amounts paid in each of them, provided that the energy efficiency certificate has been issued before the end of the tax year in which the deduction is to be applied. The certificate issued after the works must be issued before 01.01.2026. (3) (3)
Requirements for obtaining the energy efficiency certificate
Reduction of at least 7% in the sum of the heating and cooling demand indicators (energy efficiency certificate of the dwelling after the works compared to the previous one) (1)
Reduction of at least 30% in the non-renewable primary energy consumption indicator or obtaining an energy rating of “A” or “B” (energy efficiency certificate of the dwelling after the works compared to the previous one) (2 and 3)
What percentage deduction applies in each case?
20% (1)
40% (2)
60% (3)
Deduction base
Amounts paid for the performance of works that are paid by any means, excluding deliveries of legal tender.
These amounts do not include costs related to the installation or replacement of equipment that uses fossil fuels.
Grants awarded will be deducted from the base.
Tax deduction for the purchase of “plug-in” electric vehicles and fuel cell vehicles and charging points
Effective from June 30, 2023, two new deductions have been introduced that will be applicable until December 31, 2024. These deductions are:
- Deduction for the purchase of new “plug-in” electric vehicles and fuel cell vehicles.
- Tax deduction for the installation of charging points for electric vehicles
Regional tax deductions (Valencian Community)
- For birth, adoption or foster care: 300 euros per child.
- For multiple births or adoptions: 246 euros for multiple births or two or more adoptions in the same tax period.
- For the birth or adoption of children with disabilities: 246 euros per child with a physical or sensory disability of 65% or more, or a mental disability greater than 33%.
- For large or single-parent families: 330 euros for general category families and 660 euros for special category families.
- For amounts allocated to non-occasional childcare in nurseries and early childhood education centers: Deduction for nursery expenses for children under three years of age. (15%) (15%)
Requirements:
- That the parents or foster parents who live with the minor carry out activities on their own account or for others for which they receive income from work or economic activities.
- That the sum of the general taxable base and the savings taxable base does not exceed:
- – 30,000 euros in individual declaration.
- – 47,000 euros in joint declaration.
- For work-life balance. €460 for each child or foster child in permanent care who is aged between three and five. (MOTHERS OR FOSTER CARERS ONLY)
- For taxpayers with disabilities: With a degree of disability equal to or greater than 33%, and aged 65 years or older. (197 euros)
- For ascendants over 75 years of age or over 65 years of age with a disability. (197 euros)
- For hiring on a permanent basis individuals affiliated with the Special System for Domestic Employees of the General Social Security Scheme for the care of persons. (50% of the contributions paid to Social Security)
- For income derived from housing rentals: Landlord’s deduction. (5%)
- For first-time purchase of their main residence by taxpayers aged 35 or younger. (5%)
- For the acquisition of a primary residence by people with disabilities. (5%)
- For amounts intended for the acquisition or renovation of a primary residence, originating from public aid. (112 euros)
- For lease or payment for the transfer of use of the main residence.
- For renting a dwelling, as a result of carrying out an activity, on one’s own account or for others, in a different municipality. (10%)
- For amounts invested in self-consumption installations or the generation of electrical or thermal energy through renewable sources. (40% in main residences and 20% in second residences).
- For donations with an ecological purpose. (20% up to 150 euros and 25% on the rest of the donation)
- For donations of items that are part of the Valencian Cultural Heritage. (20% up to 150 euros and 25% on the rest of the donation)
- For donations for the conservation, repair and restoration of assets that are part of the Valencian Cultural Heritage. (20% up to 150 euros and 25% on the rest of the donation)
- For amounts allocated by their owners to the conservation, repair and restoration of assets forming part of the Valencian Cultural Heritage. (20% up to 150 euros and 25% on the rest of the donation)
- For donations intended to promote the Valencian language. (20% up to 150 euros and 25% on the rest of the donation)
- For donations or transfers of use or loans for other purposes of a cultural, scientific or non-professional sporting nature.
- For taxpayers with two or more dependents. (10% of the total regional tax liability)
- Due to the increase in the costs of external financing for investment in primary residences. ( 50 percent of the positive difference between the amounts paid during the tax period and those paid during the previous year)
- For amounts intended for the purchase of school supplies. (110 euros per child)
- For conservation works or improvements to the quality, sustainability and accessibility of the main residence.
- For habitually residing in a municipality at risk of depopulation. (330 euros + possibility of increase)
- For amounts paid for fertility treatments performed in authorized clinics or centers. (100 euros)
- For amounts paid for certain health expenses. Up to 100 euros for amounts paid for the treatment and care of people affected by highly complex chronic diseases and so-called “rare” diseases, or for the treatment and care of people diagnosed with acquired brain damage or Alzheimer’s disease.
30 percent of the amounts paid derived from the acquisition of products, services and treatments related to oral health of a non-aesthetic nature, with a maximum limit of 150 euros.
Those expenses related to the care of people affected by any pathology related to mental health, with a maximum limit of 150 euros.
Expenses derived from the acquisition of prescription lenses, contact lenses and cleaning solutions, with a maximum limit of 100 euros.
- For amounts paid in expenses associated with practicing sports and healthy activities. In general, 30% of the amounts paid in the tax period in expenses associated with practicing sports and healthy activities.
If the declarant is over 65 years of age or has a disability of 33 percent or more, the deduction percentage will be 50 percent.
If the declarant is over 75 years old or has a disability equal to or greater than 65 percent, the deduction percentage will be 100 percent.
The maximum deduction limit will be 150 euros.
The full amount of these deductions is applied to reduce the regional tax liability.
The taxpayer must keep in their possession the supporting documents for the deductions made for any verification by the Tax Administration.
Deduction applicable to family units formed by tax residents in Member States of the European Union or the European Economic Area
This deduction, introduced on January 1, 2018, is available to Spanish Personal Income Tax (IRPF) payers who are part of a family unit in which one member resides in another EU or EEA member state, preventing them from filing a joint tax return. This deduction equates, where more favorable, the tax payable by these Spanish resident taxpayers to what they would have paid had all members of the family unit been tax residents in Spain and opted to file jointly.
The amount of this deduction is not divided 50 percent between the full state and regional tax liability, but rather reduces each of them in the manner established by the forty-eighth additional provision of the Personal Income Tax Law and discussed in the section referring to said deduction.