Spanish Resident Tax

This week we would like to explain the INCOME TAX and respond to the most common questions we receive.

Who must file a Tax return?

If you’ve been living in Spain for more than 183 days in a calendar year (not necessarily consecutively) or if your main vital interest is in Spain (for example your spouse or children live in Spain or you have a business running in the country) you will be classed as a fiscal resident in Spain, independently if you have or have not applied for your administrative Residencia or TIE.

As a Spanish fiscal resident, you will need to submit a Spanish Income Tax (Modelo 100) on your worldwide income, independently where you receive the funds, and it will be be compulsory in the following cases:

Your annual income from employment was higher than 22,000 Euros, with one payer.
Your annual income from employment was higher to 14.000 Euros, having two or more employments, in case you have got more than 1.500 Euros on your second or later payers.
You get pensions abroad for a total amount higher to 14.000 Euros
You are self-employed in Spain or run your own business.
You receive rental income of more than 1.000 Euros a year
You had capital loos higher to 500 Euros in a year
You have capital gains and savings income of more than €1,600 a year
You sold a property on the previous year (independently if the property was situated in Spain or in any other country).

How it works?

Taxes to be paid, apply on a progressive scale, and are split between state and region, so the final percentage of Tax that will apply, will depend on which region you live.

Are there any Tax deductions?

Yes, some of the main deductions are:

Personal tax-free allowance
Joint declaration (only applicable to married couples)
Employment allowance
Child Tax allowance
Deduction for contribution to pension plans

When it is due?

The Tax returns must be submitted from from April 7 to June 30.

What if I don´t pay?

Failure to pay Tax can result in penalties, from 50% to 150% of the tax owed, plus delay interest.

Late payment can result in penalties between 5% to 20% of the Tax involved, plus delay interest.

Tax system in Spain, can be complex, so in order to be up to date with the Tax office and avoid problems, we recommend you seek for fiscal advise, to be aware about your fiscal liabilities in Spain.