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Individuals


Personal income tax applies to individuals who are tax residents in Spain. Personal income taxpayers are taxed on their worldwide income.  Spain nationals are not taxed in Spain if they are not considered tax residents.

A taxpayer is considered to reside in Spain if he spends more than 183 days in Spain during a calendar year, or if his principal center or the base of his business or professional activities or of his economic interests is in Spain.  

Taxable income is made up of a general base and the so called savings base:

  • The general base consists of the balance resulting from adding together all other income (salary income, income from business or professional activities, rental income, etc.), and/or the positive balance resulting from gains/losses not included in the savings base (e.g. prizes). As for the tax rates, there is a general scale and a regional scale; the minimum combined rate for income up to €17,707.20 is 24%, while the marginal combined rate for income from €53,407.20 and above is 43%.
  • The savings base consists of the positive balance resulting from income from movable capital (basically dividends, interest –except those received from related entities- and the monetary return or payment in kind on capitalisation transactions and life or disability insurance contracts), and the positive balance resulting from capital gains/losses deriving from the transfer of assets. The savings base is taxed at an 18% rate.

There are tax credits for buying a home, for income and/or gains obtained in Ceuta and Melilla (remember they Spain territory in Africa), for investments in and expenses in respect of assets of cultural interest, and for certain economic activities.

Workers assigned abroad: Spanish personal income tax legislation establishes a very large exemption for salary income earned by workers who work abroad, but remain tax residents of Spain. This exemption applies to up to €60,100 per year, provided that certain requirements are met.

 

 

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