La Renta in Spain
Save money in your income tax return Renta 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.
Your Income Tax Return, 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 are due a refund
- 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 2022
- Minimum: €5.550
- 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 €6.498 when the income is below €14.047,50, and it progressively disappears until the income is above €19.747,50.
Spain is divided into 17 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 General Amount 2022
- 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).
Taxable Savings Amount 2022
- Up to 6.000: 19%
- Remaining 44.000: 21%
- Remaining 150.000: 23%
- Remaining 100.000: 27%
- Over 300.000: 28%
Most Important Deductions
- 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)
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.
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