Moving to Spain means navigating an entirely new tax landscape. This straightforward guide demystifies the Spanish tax system, translating complex obligations into clear, actionable knowledge that helps you stay compliant and avoid costly mistakes from day one.
Understanding Your Tax Status: The Foundation of Everything
Before diving into specific taxes, you must determine your tax residency status—this single classification determines your entire fiscal relationship with Spain.
Tax Resident vs. Non-Resident
You become a Spanish tax resident if you meet any of these criteria:
- Physical presence: Spending more than 183 days in Spain during a calendar year (sporadic absences count as days in Spain unless you prove tax residency elsewhere).
- Economic interests: Your main business activities, professional base, or income source is located in Spain.
- Family ties: Your spouse (unless legally separated) and minor children reside permanently in Spain.
Tax residents pay tax on worldwide income—every euro earned anywhere on the planet. Non-residents only pay tax on income generated within Spanish territory.
This distinction fundamentally shapes which taxes apply to you and at what rates. Understanding it prevents the most common and expensive mistake foreigners make: assuming they’re not tax residents when Spanish authorities have already classified them as such.
Personal Income Tax (IRPF): The Big One
The Impuesto sobre la Renta de las Personas Físicas (IRPF) is Spain’s primary individual income tax. Tax residents file this comprehensive return annually, declaring all worldwide income earned during the previous calendar year.
Progressive Tax Rates for Residents
Spanish income tax operates on a progressive scale, meaning higher earnings face higher percentages. National rates for 2025 include:
- Up to €12,450: 19%
- €12,451 to €20,200: 24%
- €20,201 to €35,200: 30%
- €35,201 to €60,000: 37%
- €60,000 to €300,000: 45%
- Over €300,000: 47%
Regional variations matter: Each autonomous community adds its own supplement to these state rates, so your actual percentage depends on where you live. Catalonia, Madrid, Valencia, and Andalusia all apply different final rates.
Two Components of IRPF
Spanish income tax divides your earnings into two distinct categories, each taxed differently:
- General taxable base: Employment income, business profits, rental income—taxed at the progressive rates above.
- Savings taxable base: Interest, dividends, capital gains—taxed separately at rates between 19% and 28% depending on the amount.
When and How to File
Tax residents file their IRPF return (Modelo 100) between April and June of the year following the tax year. For 2024 income, the filing window runs from April 2 to June 30, 2025.
Not everyone must file. You’re exempt if you earned less than €22,000 from a single employer and have no other significant income. However, filing voluntarily often results in refunds, making it worthwhile even when not mandatory.
The Spanish Tax Agency (Agencia Tributaria) provides a draft return (borrador) for many taxpayers, pre-filled with information they’ve received from employers and financial institutions. You can review, modify if necessary, and submit this online.
Non-Resident Income Tax (IRNR): For Property Owners Abroad
The Impuesto sobre la Renta de No Residentes applies to non-residents earning Spanish-source income. If you own Spanish property but don’t live here full-time, this tax affects you directly.
Tax Rates for Non-Residents
Non-residents face simpler, flat-rate taxation:
- EU/EEA residents: 19% on Spanish income.
- Non-EU residents: 24% on Spanish income.
Rental Income Taxation
Non-residents renting Spanish property must declare this income using Form 210. Since 2024, rental income declarations shifted from quarterly to annual filing between January 1-20.
Critical difference: EU/EEA residents can deduct rental expenses (mortgage interest, community fees, IBI, insurance) proportionally. Non-EU residents pay 24% on gross rental income without deductions.
Imputed Income: The Hidden Tax
Even if you don’t rent your Spanish property, you still owe annual non-resident tax on «imputed income»—a fictional rental value the tax authority assumes you could have earned. This calculation uses your property’s cadastral value and typically results in modest amounts, but ignoring it triggers penalties.
Value Added Tax (IVA): Spain’s Consumption Tax
Impuesto sobre el Valor Añadido (IVA) is Spain’s VAT system, charged on most goods and services you purchase. As a consumer, you pay IVA automatically; as a business owner or self-employed professional, you collect it and remit the difference to authorities.
IVA Rates
Spain applies four distinct VAT rates depending on product category:
- Standard rate (21%): Most goods and services—electronics, clothing, professional services, hospitality.
- Reduced rate (10%): Food, transport, hotel accommodation, restaurant meals.
- Super-reduced rate (4%): Basic necessities—bread, milk, books, medicines, wheelchairs.
- Zero rate (0%): Certain medical services, educational courses.
IVA Obligations for Businesses
Self-employed individuals (autónomos) and companies must register for IVA immediately—Spain has no registration threshold. From your first sale, you’re required to:
- Charge appropriate IVA on invoices issued.
- File quarterly IVA returns (Modelo 303) by the 20th of January, April, July, and October.
- Submit an annual summary (Modelo 390) by January 30.
Property Tax (IBI): Annual Municipal Obligation
The Impuesto sobre Bienes Inmuebles is Spain’s annual property tax paid to your local town hall. Every property owner—resident or non-resident, Spanish or foreign—pays IBI.
How IBI Works
IBI is calculated by multiplying your property’s cadastral value (a government-assigned valuation usually lower than market price) by the municipal tax rate, which ranges from 0.4% to 1.3% depending on location and property type.
Town halls issue IBI bills annually, typically in late spring or summer. Payment responsibility falls on whoever owns the property as of January 1 of the tax year.
Example: A Barcelona apartment with a cadastral value of €150,000 in a municipality applying 0.8% would generate annual IBI of €1,200.
Capital Gains Tax: When You Sell Assets
Selling Spanish property or other assets triggers capital gains tax on your profit. Rates and rules differ dramatically between residents and non-residents.
Residents: Progressive Rates
Spanish tax residents pay progressive capital gains tax on their profit:
- First €6,000: 19%
- €6,001 to €50,000: 21%
- €50,001 to €200,000: 23%
- €200,001 to €300,000: 27%
- Over €300,000: 30%
Important exemption: Residents over 65 selling their primary residence pay zero capital gains tax. Younger residents reinvesting proceeds into a new primary residence within two years also qualify for exemption.
Non-Residents: Flat Rate
- EU/EEA residents: 19% flat rate on profit.
- Non-EU residents: 24% flat rate on profit.
When non-residents sell Spanish property, buyers must withhold 3% of the total sale price and pay it directly to the tax authority. Sellers then file Form 210 within three months to calculate actual tax owed.
Municipal Capital Gains Tax (Plusvalía Municipal)
The Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana taxes the increased value of urban land between acquisition and transfer. Sellers pay this local tax to the town hall when selling, inheriting, or gifting property.
Two calculation methods exist, and taxpayers choose whichever results in lower tax:
- Objective method: Cadastral land value × years owned × municipal coefficient × municipal rate (max 30%).
- Real method: Actual increase in land value × percentage of land value to total property × municipal rate.
Wealth Tax and Solidarity Tax
Spain taxes significant wealth through two complementary mechanisms.
Wealth Tax (Impuesto sobre el Patrimonio)
Spanish tax residents with worldwide net assets exceeding certain thresholds must declare annual wealth tax:
- General exemption: €700,000 per person.
- Primary residence exemption: Additional €300,000 (residents only).
- Progressive rates: 0.2% to 3.5% depending on asset value and region.
Solidarity Tax on Large Fortunes
Introduced in 2022 and extended through 2025, this applies to individuals with worldwide net wealth exceeding €3 million. It prevents high-net-worth individuals from avoiding taxation in regions with high wealth tax rebates.
Self-Employment Taxes: For Autónomos
Becoming self-employed (autónomo) in Spain involves three primary tax obligations:
1. Social Security Contributions
Autónomos pay their contributions directly via an income-based system with 15 brackets. 2024 monthly contributions range from:
- Lowest bracket: €230.15 minimum
- Highest bracket: €542.13 minimum, €1,477.52 maximum
New autónomos qualify for a Flat-rate discount (reduced contributions) during their first years.
2. Quarterly IRPF Payments (Modelo 130)
Paying 20% of net profit every three months as an advance on your annual tax bill.
3. Quarterly VAT Returns (Modelo 303)
Remitting the difference between VAT collected from customers and VAT paid on business expenses.
Foreign Asset Declaration (Modelo 720)
Spanish tax residents holding foreign assets exceeding €50,000 in categories like bank accounts, real estate, or securities must file Form 720 annually by March 31.
Cryptocurrency Exception: Since 2025, digital assets require separate declaration using the new Form 721.
Inheritance and Gift Tax
Spain’s Impuesto sobre Sucesiones y Donaciones applies to inherited or gifted Spanish assets. National base rates range from 7.65% to 36.5%.
Regional differences are dramatic: Some autonomous communities offer near-total exemptions for close family members, while others impose full rates. Beneficiaries must file returns within six months.
Essential Tax Deadlines: Your Compliance Calendar
Missing deadlines triggers penalties. Mark these dates:
Annual Deadlines
- Form 720: January 1 – March 31
- IRPF (Modelo 100): April 2 – June 30
- Wealth Tax (Modelo 714): April 2 – June 30
- Solidarity Tax (Modelo 718): July 1 – July 31
- Non-resident imputed income (Modelo 210): By December 31
Quarterly Deadlines (Jan 20, Apr 20, Jul 20, Oct 20)
- Autónomo quarterly IRPF (Modelo 130)
- Quarterly VAT (Modelo 303)
Frequently Asked Questions
How do I know if I’m a Spanish tax resident?
You’re a resident if you spend 183+ days in Spain, your main economic interests are here, or your immediate family resides here. It is independent of your visa status.
Do I pay tax in Spain if I already pay tax in my home country?
Double taxation treaties prevent paying twice. You typically claim foreign tax credits.
What’s the difference between NIE and NIF?
Your NIE is your foreigner identification number; your NIF is your tax ID. For most foreigners, they are the same number with different prefixes.
Transform Tax Complexity Into Compliance Confidence
Lextax specializes in guiding foreign residents through Spanish tax compliance, combining deep expertise in international taxation with practical experience. We don’t just file forms—we translate Spain’s tax complexity into clear strategies that protect your wealth.
Don’t navigate Spanish taxes alone. Contact Lextax today for a personalized consultation that clarifies your obligations and establishes a comprehensive compliance strategy tailored to your unique situation.
