Income tax in Spain

Are you in Spain for more than six months (183 days) of the calendar year, or are your core economic interests in Spain? If the answer is yes, then you are considered to be a tax resident in Spain.

As a fiscal resident, you will be liable to pay Spanish taxes on your worldwide income and assets and will need to file a Spanish tax return.

At Pellicer&Heredia, we offer a comprehensive and expert service in the management of personal income tax return in Spain. Our team of tax advisors will ensure that you make the most of the tax deductions and benefits available. With us, filing your income tax return will be more accurate and efficient.

We understand that certain tax circumstances require the skill and knowledge of tax experts. If you are self-employed, own multiple properties, have complex investments, work abroad, or have received inheritances or donations, our management service for filing your income tax return will ensure that your tax complies with all tax regulations, and we will optimize your result. for the benefit of your economic situation.

Your tax advisor Spain, now with videoconference

Do you need to file your personal income tax return, but simply can’t find the time to come to one of our offices? At Pellicer & Heredia you can now file your tax return with a simple videoconference meeting. In a matter of seconds you will connect and one of our experts will assist you, reviewing your documents in the same way as they would in an in-person meeting.

Once your appointment is confirmed, you will receive an email with the date and time, together with a link to access the conference. Please note that no registration is required. When your appointment is due, simply click on the link indicated and the connection will be made instantly.

Save money in your income tax return Renta in Spain

Questions about your personal income tax in Spain

At Pellicer&Heredia, we respond to your concerns with clarity and precision. Below you will find answers to common questions about how to file your income tax return in Spain. Our goal is to simplify the tax process and ensure you are informed and confident every step of the way.

Is it compulsory to file a tax return in Spain?

There are exceptions, which we highlight below:

22,000 euros of earned income and pensions, including income from abroad.

This limit is reduced to 15,000 euros in the following circumstances:

The income has not been taxed at source (Spain).
The income comes from more than one source (e.g. two jobs or two pensions, or one of each). If the other sources add up to EUR 1,500 or less, you can still benefit from the EUR 22,000 exemption.

However, the declaration becomes compulsory in certain circumstances, regardless of how low your income is, for example:

If you are entitled to double taxation
If you are entitled to a refund
If you have made pension contributions
If you claim deductions for the purchase of your main residence.
If you have capital gains or income above certain limits.

Types of income

Here are 5 types of income:

Earned income (employment, pensions).
Investment income (interest, dividends).
Income from real estate (rentals, second homes).
Income from economic activities.
Capital gains (lottery, gambling, sale of assets such as housing, shares, etc.)

Personal Allowance 2023

Minimum: €6,105
Older than 65 years: €7.370
Older than 75 years: €7.645

In addition, income from work and pensions have a minimum exemption of 2,000 euros.

There is another reduction of 6,498 euros when income is less than 14,047.50 euros, and it disappears progressively until income exceeds 19,747.50 euros.

Spain is divided into 17 autonomous communities, and taxes are shared between the state and regional governments, with each autonomous community deciding its own tax rates and obligations, so the amount of income tax you pay depends on where you live. Below are the state brackets and the rates applied to the general tax base:

What's new in 2023:

Reduction of the regional personal income tax rate: The regional personal income tax rate is reduced from 24% to 23% for the first 30,000 euros of income.
Deduction for health and assistance expenses: A deduction of 30% is established for amounts paid for optical, dental and gym expenses, up to 150 euros per person.
Deduction for expenses associated with sports: 20% of the fees paid in gyms, sports schools and sports federations can be deducted, up to 100 euros per person.

General Taxatable Base 2023 (coincides with the autonomous community of Valencia)

Up to 12.450: 19%
Remaining 7.750: 24%
Remaining 15.000: 30%
Remaining 24.800: 37%
Remaining 240.000: 45%
From 300.000 onwards: 47%

Savings Income includes income from interest, dividends, life insurance, purchased annuities (not annuities purchased with pension funds) and capital gains on the sale of transfer of assets (not property).

Tax saving amount 2023

Up to 6.000: 19%
Remaining 44.000: 21%
Remaining 150.000: 23%
Remaining 100.000: 27%
Over 300.000: 28%

Most Important Deductions in your personal income tax in Spain

50% of the amounts invested in newly created companies up to a maximum of 100,000 euros deduction provided that not more than 40% of the company is owned (State deduction)
Double Taxation Deduction (State deduction)
10% of the amounts donated to legally recognized foundations (State deduction)
For general large family (3 or more children): 1.200 euros (State deduction); and probably the region includes an additional deduction as in the case of Valencian region.
For special large family (5 or more children): 2.400 Euros (State deduction)
For the rental of the habitual residence, on the amounts paid in the tax period (Valencia region deduction):
– 20 %, with the limit of 800 euros.
– 25%, with a limit of 950 euros if the tenant is under 35 years of age.
40 % of the amount of the amounts invested in electric self-consumption installations in the main residence with a maximum deduction of 8,800 euros (Valencia region deduction)
With effect from 30th June 2023, a new state deduction for the purchase of electric vehicles is approved in the 58th additional provision of the Personal Income Tax Law, introduced by Royal Decree-Law 5/2023 of 28 June (BOE of 29 June) 2023. One of the following alternatives is available:

– If the vehicle is purchased between 30th June 2023 and 31st December 2024, the deduction can be taken in the tax period in which the vehicle is registered.

– If amounts are paid between 30th June 2023 and 31st December 2024 on account of the future purchase of the vehicle, amounting to at least 25% of the acquisition value, the tax credit can be taken in the tax period in which this amount is paid, the remainder must be guaranteed and the vehicle must be purchased before the end of the second tax period immediately following that in which the payment of this amount was made, i.e. in 2025 (if the 25% payment was made in 2023) or 2026 (if it was made in 2024).

In both cases, the basis for the deduction is made up of the purchase price of the vehicle, including the expenses and taxes inherent to the purchase, and does not include amounts subsidised or to be subsidised through a public aid programme.

The base of the deduction then calculated may not exceed 20,000 euros.

Deduction for energy efficiency improvement works on homes
The deduction for work to reduce heating and cooling demand may be applied to amounts paid for work carried out up to 31sts December 2024 on the main residence or any other property owned by the taxpayer that is rented for use as a home at that time or in the expectation of being rented, provided that, in the latter case, the property is rented before 31st December 2025.
The deduction for works to improve the consumption of non-renewable primary energy can be applied to the amounts paid for works carried out up to 31st December 2024 on the main residence or any other property owned by the taxpayer that is rented for use as the main residence at that time or in the expectation of rental, provided that, in the latter case, the property is rented before 31st December 2025.
The deduction for work carried out on predominantly residential buildings may be applied for the amounts paid for such work up to 31st December 2025.

This last deduction will be applied in the tax periods 2021, 2022, 2023, 2024 and 2025 in relation to the amounts paid in each of them.

For more information, please do not hesitate to contact our multidisciplinary professional firm specialised in taxation. At Pellicer & Heredia we can analyse your tax situation on a personalised basis, as well as carry out a tax planning study in accordance with your needs.