What are the taxes in Spain?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-02 13:48

If you are going to work or study in Spain, then you will certainly need to know about its tax system. Every year, everyone who lives in the country is required to file a tax return. You can read more about what taxes exist in Spain and how they can be reduced in this article.

Types of fees

Spain is a country with a mild and warm climate, which has enjoyed special love among tourists from all over the world for many years. And how many people dream of moving into it! You can emigrate here, but it is quite difficult to do so. Therefore, many people prefer to simply buy a property so that they can spend their holidays on a sunny beach from time to time. It doesn't matter if you are going to temporarily live in Spain or buy an apartment in this country, you will still need to pay taxes in order to be able to return to this wonderful land again. What taxes are there in Spain?

• Income - is the most basic and applies to all types of profits.
• Tax forcouples.
• Property tax. If you purchased a property or a car in the country, then every year you will be required to pay tax on it. This rule applies to residents of Spain as well as non-residents and foreigners.
• Inheritance tax and gifts.
• VAT.
• Corporate tax.

For the most part, Spain has the same list of laws as Russia. But still there are significant differences, which relate mainly to the amount of fees. What percentage is tax in Spain on income? The rate varies depending on the level of income and ranges from 19 to 45%.

Tax return

The tax year in Spain follows the calendar year, starting on January 1st and ending at the end of December. Taxes are imposed on both residents and non-residents who receive income in Spain. For convenience, taxes are divided into two types: general income and income from savings. Therefore, it does not matter whether you receive profit from a business or from interest in a Spanish bank, this amount will still be taxed. The tax rate in Spain is progressive and depends on how much you earn:

• Up to 6000 euros the rate will be 19%;
• If a person receives from 6 to 50 thousand euros, then he will need to deduct 21% to the treasury;
• If the income exceeds 50,000 euros, then in this case the rate will be maximum: 23%.

You must file your tax return every year by June 30th if youare a resident of Spain. If you do not meet the deadlines for filing your tax return, you may receive a late fee. The usual amount is 100 euros, but it can increase if you delay paying taxes for more than a few months. If the delay exceeds three months, then the pen alty will be 20% of the debt.

How can I file my tax return? The easiest way to do this is online, but you can also fill out the necessary documents at tax offices.

Taxes for non-residents

Taxes for residents and non-residents in Spain are slightly different, and this is important to consider. Who is considered a non-resident of the country?

• A person staying in Spain for less than 183 days a year.
• A person who has no business in the country.
• A person whose spouse or minor children do not reside in Spain.

Taxes in Spain for non-residents average from 19 to 24%. If you are a citizen of another EU country, then a reduced rate of 19% will apply to you. If you come from another place, then you will have to pay all 24%. All sources of income are taxed:

• Pensions.
• Roy alties.
• Profit from capital increase.
• Investment projects and dividends.

VAT

Value added tax is classified as an indirect consumption tax. Almost all goods are subject to VAT, with some exceptions. The rates of this tax are 21, 10, 4%. The lowest interest rate applies to essential products: vegetables, bread, fruits and other items from the grocery basket. A higher 10% tax is imposed on other foodstuffs, public transport, and medical services. All other categories of services and goods fall under the rate of 21%. Every person who came to Spain as a tourist can receive a tax deduction for purchased goods when leaving the country. So if you're visiting Spain for shopping, don't forget this great deal.

Corporate tax

This fee is levied on the income of legal entities and enterprises. Therefore, only those who have a business in Spain need to worry about it. According to the law, the tax rate ranges from 25 to 30% and depends on the region in which the company is registered. The highest rate is in Navarra and the lowest in the rest of Spain. Also, businessmen have the possibility of preferential taxation at a reduced rate of 20 and 15%. Who has these benefits?

• Enterprises that have just started their activity (newcomers to the market).
• Legal entities registered in the Canary Islands.
• Loss-making companies that did not receive any profit in a year. In this case, the state generally exempts them from tax.

Economic activity tax

In Spain there are several taxes that affect only legal entities. Tax on conducting economicactivity is a regional fee that applies to all corporations that conduct economic activity. However, in practice, such a tax is charged only to large companies whose annual profit exceeds one million euros.

Another interesting tax that exists in Spain is the stamp duty, which applies to legal acts and documents. It is charged for transactions that require certification by a notary. Thus, for example, when selling real estate, you will be required to pay tax not only on the apartment or house, but also on the registration of legal documents.

Tourist tax

Even if you are just going to visit the country for tourism purposes, you still have to pay a city tax in Spain. This is a fee that is collected by the local authorities of major tourist centers. The tourist tax in Spain is introduced in Catalonia and applies to accommodation in hotels and hostels. For example, for five-star hotels, the tax is 2.25 euros, and for campsites - 0.65 euros. However, some categories of tourists are exempt from paying this tax:

• EU residents.
• Persons under 15.

In addition to the tourist tax, every person who purchases food or clothing in Spain, as well as pays for various services, will need to pay VAT, which is about 21%. The good news is that you can apply for TaxFree at the airport. However, VAT can only be refunded on items that you can take with you (clothing, electronics, jewelry, etc.).etc.).

Income tax in Spain

Taxes in Spain are varied and often require a good knowledge of the tax structure of this country. For non-payment, you can receive serious fines and sanctions, up to restriction of entry or exit. One of the most important taxes in Spain is the income tax. It applies to absolutely all types of profit that an individual or legal entity can receive. If you live in Spain for six months (183 days) or more of a calendar year, or if your family or business is in this country, then you are considered a resident and are liable to pay taxes based on this. To avoid various pen alties, you need to file a tax return every year in the following cases:

• Your annual income is over EUR 22,000.
• You earn more than 1,000 euros a year in rental income.
• You have income from deposits that bring you more than 1600 euros a year.
• You are a sole proprietor or owner of your own business.
• You are a resident of the country for the first year and file a tax return.

If you are a resident of the country, you will also have to report to the state all assets abroad worth more than 50,000 euros. The income remaining after the payment of all deductions (social, pension) is subject to taxation. In Spain, income tax has a progressive rate, so its amount directly depends on how much income you receive.

Non-residents also bearresponsibility for any income that was received in the territory of Spain (cash deposit in a Spanish bank, property or any business in the territory of the country). Income tax in Spain for non-residents ranges from 2 to 24%. It is also progressive.

If you are a resident of the country, then in this case the tax rate on dividends in Spain can range from 19 to 45%:

• Income up to €12,450 is taxed at a minimum rate of 19%.
• If you receive more than 66,000 euros, then your rate will be equal to 45%.

Property tax

If you own property in Spain and live in it, you will pay a tax on local property called Impuesto sobre Bienes Inmuebles (IBI). How to calculate its amount? To do this, you need to multiply the cadastral value by the tax rate set by the authorities. On average, it is about 0.7%, but can reach up to 1.1%. At the same time, it should also be taken into account that the cadastral value can be several times less than the real one, therefore, on average, land owners pay about 500-800 euros per year. What taxes do I have to pay in Spain besides the property tax? When calculating, it is also necessary to take into account utility bills and garbage collection tax. Their value will directly depend on the prestige of the area and the availability of various amenities on the territory (pool, trees, elevator). The range of taxes can vary greatly, starting from 30 euros and going up to 1300 euros. If you decide to rent out your property,you will have to pay 24% of the income. The tax must be paid every quarter and do not delay filing returns.

In Spain, it is quite profitable to use car rental. But if you are going to get a residence permit or purchase transport to move around the country, then in this case you will also have to pay tax to the state.

Car tax in Spain is 21% for those who decide to buy a new car and about 14% for those who buy a used one. But in addition to this, you will need to pay a fee for vehicle registration, which will depend on the amount of CO _{2 emissions into the atmosphere. And every year you will have to pay the transport tax. It is usually 100-150 euros. In the event that you decide to sell the car, you will also need to pay income tax. So a car in Spain is not something that everyone can afford.}

We alth tax

The crisis in Europe forced the Spanish government to think about the introduction of additional fees that can replenish the treasury of the state. This time, the “victims” of the new fees were the owners of expensive assets and luxury goods. The main criterion for calculating such a tax is the value of property over a million euros for residents or 700 thousand euros for non-residents of the country. The rate depends on how much the value of the property exceeds the reference point. The tax rate ranges from 0.2 to 2.5 percent on average.

Buying property

Buying property in Spainmany people are attracted by the fact that as a result you not only get real estate abroad, but also invest in a liquid project, because an apartment or house can always be rented out. When buying real estate, both the seller and the buyer are required to pay taxes, and it does not matter whether you are a resident of the country or do not live there permanently. There are several fees associated with buying and selling an apartment or house:

• Value Added Tax (IVA). This tax when buying an apartment in Spain is paid only if a person purchases a new apartment from a construction company. The rate is around 10%.
• Tax on the transfer of property (ITP). Paid if you buy housing in the secondary market. The amount of this fee is usually between 6 and 10%.
• Housing tax in Spain also includes income tax. It must be paid if you sell real estate. As in Russia, the tax is calculated on the basis of the amount received on the difference between the purchase and sale price.
• Stamp tax is paid by the buyer. Each region has a different rate - from 0.1 to 2% of the total cost of housing.

The gift tax in Spain ranges from 7 to 32% of the property value. Therefore, many prefer not to draw up a deed of gift, but to draw up a contract of sale. This is often much cheaper and faster.

Self-employed citizens and students

If you came to Spain to study, you still have to payincome tax from your funds in the same way as for all other residents of the country. However, you may qualify for minor exemptions and additional cash benefits based on your status. After all, as a rule, students can only work for a limited amount of time, so they receive little money. But the main benefits that students can claim do not concern taxes and apply to travel tickets and visits to social and cultural facilities (museums, theaters).

Some of the foreigners who come to Spain for a living do not work officially, but under a contract of employment. If you know your situation, then keep in mind that in this case you are required to file a tax return in the same way as other Spanish citizens.

How to avoid double taxation?

What taxes do foreigners pay in Spain? Exactly the same as the citizens of this country, except that the tax rate is slightly different. But if you are planning to become a resident of Spain or move for permanent residence, then you need to think in advance about how you can avoid double taxation. If you leave your country in the middle of the tax year and continue to receive income in its territory, then you will pay deductions not only to its treasury, but also to the treasury of Spain. But with some countries, Spain has signed an agreement on the avoidance of double taxation. These include Russia, Poland, Slovenia, Switzerland, the USA and many other states. All you need is to notify the tax office in time about the change of your place of residence.

Expert Tips

If you want to save money and pay as little tax as possible, the first thing you need to do upon arrival in Spain is to learn the language of the country. There are many open sources where you can easily find comprehensive information, but it is better to study it in Spanish in order to avoid misunderstandings. Also, a reasonable way to settle all misunderstandings with the tax authorities can be considered the search for accountants and lawyers in Spain. They are familiar with all the laws and can handle all the red tape.

If you are working in Spain under a contract of employment or officially registered as an employee of an organization, then your situation is quite simple. The employer withholds and pays all taxes for you, and you get your hands on the net profit. The Spanish tax system works in such a way that this amount corresponds exactly to your income level. However, even though your employer pays the deductions from your salary, you still need to file your own return each year.

If you work as an individual entrepreneur, then the amount of taxes will directly depend on the amount of your income and on how many employees you have.

Results

What is the percentage of tax in Spain? Although the Spanish tax system differs in details, in general it is very similar to the Russian one. Therefore, if you decide to move, then you should not have big difficulties. The main thing is to file a declaration on time and find out on the spot what deductionsyou need to pay. In Spain, taxes are divided into state, regional and local. A lawyer or an accountant can help you figure it out, but you can easily find the information you need on your own.