The Spanish Income Tax Calculator is designed for individuals living in Spain and filing their tax return in Spain who wish to calculate their salary and income tax deductions for the 2023 Tax Assessment year (1st January 2023 - 31st December 2023). You can include your income, Capital Gains, Overseas Pensions, Donations to charity and allowances for family members. You can also select future and historical tax years for additional income tax calculations (where figures are held, if you would like to calculate your income tax deductions for Spain for a year which is not shown please contact us and we will integrate the relevant tax tables).
Enter your employment income and expenses to produce an income tax calculation for Spain or select advanced to edit the default setting and change the salary calculation to match your circumstances.
Spain, Officially the Kingdom of Spain, is the largest country in Southern Europe. Spain is the world's thirteenth largest economy, and a member of the Organization for Economic Co-operation and Development and the World Trade Organization.
The Agencia Estatal de Administración Tributaria (AEAT), commonly known as Agencia Tributaria, , management of the customs and repression of smuggling. The agency was created in 1991 and has been operational since January 1992. AEAT also does revenue collection on behalf of the European Union. You can access the Online portal for AEAT here.
Let's discuss the details of various taxes that are levied on individual and corporate income.
The Tax year for Individuals is the same as the calendar year. The Period for declaring and paying PIT (Personal Income Tax) is established annually by ministerial order. The filing and payment window for taxes generally opens up in early April, and closes by late June following the tax year end. The minimum threshold to file PIT is EUR 22,000. For employees that have income from two sources, the minimum income threshold is EUR 14,000.
Penalties for underpayments range from 50% to 150% of the unpaid tax liability. For late payment, interest and surcharges (from 5% to 20%) are imposed if the tax payment is done voluntarily without any investigation.
Resident individuals must declare any assets held abroad annually. Filing joint tax returns for married couples is allowed.
Resident individuals are taxed on worldwide income and non-residents are taxed on Spanish source based income. The Following are considered as taxable income for PIT in Spain:
The basis is split into two important categories, savings taxable income and ordinary taxable income. Rates for saving taxable income are:
Progressive tax rates apply to general tax income. These rates are approved separately by each state and the autonomous communities in Spain. Tax liability may differ from one autonomous community to another. The common guidelines to withholding tax at progressive rates applicable, the latest rates and thresholds are available here.
Investment income and capital gains are taxed at 19% of the revenue up to EUR 6,000. At 21% of income between EUR 6,000 to EUR 50,000 and at 23% of income over EUR 50,000.
Note: Each Autonomous community has to approve its own tax rate brackets.
Tax on capital gains derived by an individual by selling the main residence is exempt, given the proceeds are used to purchase another permanent residence within 2 years. The Capital gains of this sort may also be subject to exemption if the seller is over 65 years of age and the proceeds are invested in a pension plan that meets the defined criteria.
In case of transfer of properties located in Spain by nonresident individuals without permanent establishment, a 3% of the price is required to be deposited with tax authorities by the purchaser. This is considered as withheld advanced payment of capital gains tax.
Deductions on personal income tax are available for each type of income. In some cases a deduction for mandatory social security is permitted. A 30% of deduction may be allowed for employment income given it meets the specific criteria.Corporate Income Tax (CIT)
Compliance for corporations - Corporate taxes are to be filed within 6 months and 25 days following the end of the tax year. Advanced corporate tax is paid in 3 installments in April, October and December each year. Final payment is made at the time of filing.
The tax year coincides with the accounting period. It may not exceed 12 month period.
Consolidated returns are permissible upon meeting the defined criteria. Penalties and interest are payable for late filing and failure to comply with the tax law.
Resident companies are subject to tax on worldwide income and nonresident companies are taxed only on Spanish-source income, subject to the provision of an applicable tax treaty. Branches and subsidiaries are taxed in a similar manner.
A flat CIT of 25% applies to the global amount of taxable income on tax resident and nonresident entities. Special rates may apply in certain cases, such as banks which are subject to 30% tax rate.
Dividends and capital gains from Spanish and foreign subsidiaries may be exempt from corporate tax, given they meet all the requirements. There are many circumstances in which participation exemptions do not apply, such as in the case of dividends and capital gains that are already claimed as an expense for tax deductions at the level of entities.
Up to Euro 5 million may be claimed as a cash rebate for research and development (R&D) Credit under the tax incentive regime, given they meet the defined criteria.
Net operating losses may be carried forward indefinitely, however carry back of losses is not permitted. The percentage cap on the losses differs on the basis of the turnover amount.
VAT is generally applied on imports, and supply of goods and services performed in Spanish VAT territory. You can calculate the VAT due on goods in Spain using the Spain VAT Calculator
VAT is levied at the standard rate of 21% with reduced rate of 10% and 4%. Exemption of VAT applies to certain transactions.
Monthly returns to be filed when the annual turnover exceeds EUR 6 million. An Electronic VAT reporting system (SII) has been made mandatory for filing monthly returns. For turnover, lower than 6 million one may file returns on a quarterly basis.