The income tax in Spain
is a type of tax
that is charged on the income obtained by both natural persons and legal entities (divided between the personal income tax
in the case of natural persons, and the corporate income tax
, in the case of corporate entities).
According to the tax legislation
available here, the obligation to pay the income tax in Spain
is also imposed in the case of entities that have their tax residency
elsewhere - they can be natural persons or business forms. However, there is a difference in the manner in which this tax
is calculated in this case, as Spanish tax residents
must pay the income tax in Spain
for their global income, while foreign entities must pay it only for the income obtained from taxable activities
Persons who need consultancy services on the income tax
can receive in-depth information on this subject from our team of Spanish lawyers
. Our law firm
can also provide legal representation to those who need to register for taxation
, including for the income tax in Spain
What are the tax obligations for natural persons in Spain?
Natural persons in Spain
are legally required to pay taxes
if they obtain a taxable income
. The obligations of individuals refer to paying the required amount due, to submitting the necessary tax returns
and to register for taxation
for various types of incomes. The current tax rates
charged to tax residents in Spain
are the following:
- an yearly income of up to EUR 12,450 is charged with the income tax in Spain applicable at a rate of 19%;
- income that ranges from EUR 12,451 to EUR 20,200 is charged with a rate of 24%;
- the next tax rate is of 30%, applicable to an yearly income of EUR 20,201 to EUR 35,200;
- persons who obtain a taxable income ranging from EUR 35,201 to EUR 60,000 will be charged with a tax rate of 37%;
- any income that is above EUR 60,000 is taxed with a rate of 45%.
In the case in which the persons are tax residents in Spain, the annual income will take into consideration other incomes obtained in foreign countries, and then taxed with the necessary tax rate. Persons who are foreigners living in Spain should be aware of the fact that they will become liable for the payment of this tax if they live here for more than 183 days.
As a natural person, the tax liability
can arise for the payment of the income tax in Spain
in situations such as: the person has started a business in his or her own name (such as sole trader) or in the case in which the person obtains an income from renting real estate properties; our team of Spanish lawyers
can offer more details on the tax liability
of a natural person.
What is the standard corporate income tax rate in Spain?
Businesses must also prepare to pay the income tax in Spain
, which here is charged at the standard rate of 25%. All corporate entities must pay this tax rate
on their income, but investors should know that they can benefit from a lower corporate income tax
, in certain conditions that can be explained at length by our Spanish law firm
It must be noted that Spanish businesses
can pay a corporate income tax
of only 15% in the first two years of activity when they obtain a profit. Foreign companies are charged with this tax
and foreign investors should also know that permanent establishments will also be liable to paying the income tax in Spain
The tax rates and other procedures referring to paying the income tax as a corporate entity are prescribed by the Corporate Income Tax Act (the Spanish Act 27/2014). The legislation presents that foreign companies can be taxed following the same tax principles applicable to local companies.
Companies, as well as natural persons, have to submit tax returns
in a given period of time. The institution that handles tax matters
here is the Spanish Tax Agency
. Tax returns in Spain
have to submitted following the rules imposed by the financial year, which coincides with the calendar year.
A company is allowed to pay installments on the corporate income tax in Spain in the months of April, October and December, while the overall calculation of the income tax, for the entire financial year, can be done in maximum six months and 25 days after the end of the accounting period.
Businessmen can find out more details on how to submit the tax returns
, as well as on other accounting obligations of company, from our team of lawyers in Spain
. Please contact our Spanish law firm
for professional advice on the accounting procedures imposed to local businesses, the tax regulations
applicable to natural persons and legal entities, as well as on any other matter that can be of interest for those who are tax residents in Spain