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.
Your Renta, now with a Videoconference
Do you need to lodge your tax return, but simply can't find the time to visit one of our branches? At Pellicer & Heredia you can now file your tax return with a simple videoconference meeting. It takes seconds to connect and one of our experts will be assisting you, reviewing your documents just the way they would in a face to face 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.
Do you have to file a Spanish tax return?
There are exceptions in place, which we will highlight below:
- €22,000 income in the year from employment and pensions, including those from overseas.
- This limit falls to €14,000 under 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 €1,500 or less you can still use the €22,000 exemption.
However, a return becomes obligatory in certain circumstances no matter how low your earnings are, such as:
- if you have a claim for double taxation
- if you have made pension contributions
- if you are claiming deductions for cost of buying your main residence
- if you have capital gains or income above certain limits
Types of income
Below we list 5 types of income:
- Income from work (paid employment, pensions).
- Investment income (interest, dividends).
- Income from real estate (rentals, second homes).
- Income from economic activities.
- Capital gains (lottery, gambling winnings, sales of assets such as homes, stocks, etc.).
Personal Allowance 2020
- Older than 65 years: €6.700
- Older than 75 years: €8.100
In addition, employment income and pensions have a minimum exemption of €2.000.
There is a further reduction of €5.565 when the income is below €13.115, and it progressively disappears until the income is above €16.825.
Spain is divided into 12 autonomous regions, and taxes are split between state and regional Governments, with each autonomous region deciding on its own tax rates and liabilities, so how much income tax you pay depends on where you live. Below are the state bands and rates applied to general taxable income:
Taxable Amount 2020
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).
Taxable Savings Amount 2020
Most Important Deductions
- Deduction of 15% on the total of the purchase of your main residence, acquired before 01.01.2013.
- Deduction of 10.05% on the amount paid in rentals (contracts before 1 January 2015, as long as it was declared in 2014 income tax).
- Additionally, the Comunidad Valenciana has a further deduction of 15% on the amount paid in rentals, with a limit of €459, when the tenancy contract is registered with the Comunidad Valenciana.
- Double Taxation Deduction.
If you need more information, or someone to help you submit your tax declaration when it is due, contact expert tax advisors who can assist you.