Rates and allowances

Income Tax Rates for the year ended 31st December 2023

Below is the general table for Spanish tax rates set by the government for 2023. However, each region (Comunidad Autónoma) of Spain may set its own rates. Please contact us for more detailed guidance on which rates apply to you.

From (Euros)	To (Euros)	State tax %	Regional tax %	Total tax %
0	12,450	9.50	9.50	19.00
12,450	20,200	12.00	12.00	24.00
20,200	35.200	15.00	15.00	30.00
35,200	60,000	18.50	18.50	37.00
60,000	300,000	22.50	22.50	45.00
300,000	+	23.50	23.50	47.00

Capital Gains Tax Rates

Residents
First 6,000 Euros:	19%
6,000 - 50,000 Euros:	21%
50,000 - 200,000 Euros:	23%
200,000 + Euros:	26%
Non-residents	19%

Company Tax Rates

Please see our company tax page.

Wealth Tax (Impuesto sobre el Patrimonio)

After having been previously abolished in Spain on 1st January 2009, Wealth Tax then re-introduced on a "temporary" basis for the years 2012 and 2013, and then again from 2015 onwards.

The tax-free allowances for this tax vary per area of Spain (Comúnidad Autónoma) where the taxpayer is resident.

Allowable Depreciation

Straight line method can be used for any depreciable asset. Reducing balance method can be used for new tangible assets with estimated useful life of at least 3 years

	Maximum straight Line rate %	Maximum Useful Life years
Buildings and other constructions	3	68
Tools	30	8
Motor vehicles	16	14
Fixtures & Fittings / Office Equipment	10	20
Machinery	12	18
Computers	25	8

Depreciation must be recorded in accounts to be deductible. And within above limits, except: Accelerated allowance may be granted for new assets located in Spain, where it can be demonstrated that actual depreciation took place.

Other significant taxes

For holding companies of Spanish real estate which are resident in non-treaty countries, an annual "penalty tax" is payable which is calculated as 3% of the cadastral value of the property.

Income Tax Declaration threshold

If either of the limits below are exceeded, the taxpayer must file an annual tax return.

Income from employment:	22,000 Euros
Capital gains and savings income:	1,600 Euros
Rental income:	1,000 Euros

VAT (IVA - Impuesto sobre el Valor Añadido)

Standard rate (Tipo General)	21%
Reduced rate (Tipo Reducido)	10%
Super-reduced rate (Tipo Superreducido)	4%

• Payment is quarterly, in general within 20 days of the month end;
• A monthly regime applies for businesses with turnover above 6 million Euros.

There is a pro-rated partially exempt calculation for businesses making both taxable and exempt supplies.

Exemptions

• Public services
• Financial transactions
• Public postal services
• Insurance Transactions
• Medical and health service
• Conveyance of land designated as not for housing
• Welfare
• Resale of property
• Education
• Private lettings
• Sport
• Exemptions for internal transactions
• Certain cultural activities
• Exemptions for exports

Deductibility of VAT

VAT incurred in relation to taxable goods and services is recoverable.

Non-recoverable VAT

In the case where a motor vehicle has mixed business and personal use, 50% of the motor vehicle cost and related expenditure is not recoverable for Spanish VAT purposes. VAT on travelling expenses which are not deductible for corporation or income tax purposes is not recoverable.

Special Systems

• Agriculture, stock breeding and fishing
• Second-hand goods, art objects and antiques
• Travel agents
• Retail trade - recargo de equivalencia - under this system, net VAT is paid to suppliers, rather than the Spanish Tax Office.

VAT on property

New homes	-	VAT AJD (stamp duty)
Second hand homes	-	ITP (property transfer tax) AJD
Commercial premises & plotsVilla plots from promoter	-	VAT AJD
ITP/ AJD rates can vary according to area (Comunidad Autónoma).