taxesTax system in Spain

BarnaRelocation can help you understand how the Spanish tax system works. Below you will read a brief information about property taxes, VAT, capital gains tax, car tax, wealth tax and inheritance tax.

Usually the tax year begins on January, 1st and ends on December, 31st. It is important to know that Spain is divided into 17 communities where taxes and liabilities may be different from each other. All detailed information about Spanish tax system and different taxes can be found in the website of the Agencia Tributaria. Unfortunately most of information is in Spanish, however some can be found in English.

Value-added Tax (VAT)

In Spain, the Value Added Tax (Impuesto sobre el Valor Añadido – IVA) is divided in three levels:
1. IVA general: Charged on non-essential products and services at 21%
2. IVA reducido: Charged on products and services such as tickets, eyeglasses, hairdressers, funeral services and dentists at 10%
3. IVA superreducido: Charged on essential items such as bread, milk, cheese, eggs, fruit, vegetables and cereals at 4%

In the Canary Islands IVA is not applicable, nonetheless there is a special reduced local tax known as Canaries General Indirect Tax (Impuesto General Indirecto de Carnarias, IGIC) and it is applicable for services and purchases. You can find more detailed information by clicking here.

Note that only residents have to pay IVA on goods, and those who are visiting Spain and purchase goods / services valued above €90.16 can have the IVA refunded.

Gift Tax

Gift tax (inheritance tax) is a tax for receiving a gift from a donor and it is calculated taking into account variables such as the Community, the amount and the existing wealth of the beneficiary and must be paid within 30 days of the transfer date.

Personal Income Tax in Spain

You must pay taxes in Spain if:

  • You stay in Spain for more than 183 days in a row during one calendar year. You will become automatically liable and it is irrelevant if you are registered or not in the Registro Central de Extranjeros.
  • You are doing business or working in Spain.
  • You are married and your spouse lives in Spain or you have a under aged dependent living in Spain.

There are different tax obligations for residents and non-residents in Spain:
A Spanish resident has to pay taxes on their worldwide income after all allowances and deductions.
A non-Spanish resident is liable only for Spanish income tax, generally at fixed rates.

If you need any assistance, BarnaRelocation can provide you a detailed session of how the Tax system in Spain works.

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