Guide to the income tax statement in Spain

If you are a foreigner receiving income (because of working, pensions, etc.,) this is extremely important to you because it is highly likely that you need to file your income tax statement. This article will guide you through all your questions regarding this issue.

 

1. What is an income tax declaration in Spain?

2. Do I need to present my income tax statement in Spain?

3. When and how to submit the statement?

4. What are the factors that affect the tax declaration amount?

5. How do you calculate the amount you need to pay?

 

 

1. What is an income tax declaration in Spain?

 

Wherever you are, if you receive any form of income, you will need to pay the income tax. In Spain, an income statement (called “declaración de la renta”) is the process of drafting a document that includes and specified all the incomes you have obtained and generated throughout the year so that the Spanish Tax Agency can charge or reimburse any money that was left. Some key points to know and understand are:

 

• Submitting this document does not necessarily mean that you need to pay extra tax, because in most cases, you have already paid taxes for all your income monthly before the year ends. The tax declaration just helps to check if you have paid any extra amount or if there is any amount left to be paid. In some cases, the tax agency may even reimburse you some money.
• If you are required to present this document, you will need to submit it once a year.

 

 

2. Do I need to present my income tax statement in Spain?

 

There are several requirements to consider if you should submit your income tax statement in Spain or not.

 

• If you are a tax resident in Spain, you must submit your income tax declaration in the country. You are a tax resident in Spain if you:
  • You live in Spain for more than 183 days per year (which can be seen through passport control)
  • Your center of economic interest is in Spain
  • Your spouse or children who economically depend on you currently live in the Spanish territory

 

If you meet any of the above conditions, you will be regarded as a tax resident, which means that you will have to pay taxes in Spain on your worldwide income and declare them through your annual income statement.

 

• If you are a tax resident in Spain, then you must file your income tax return if:
  • You receive more than 22.000€ per year, from work activities or pensions (both in Spain and abroad)
  • Your income has not been taxed in Spain or comes from more than one payer (like two different jobs, or a job and unemployment benefits), and you have earned over 14.000€
  • You have pensions over 12.000€ from abroad
  • Other specific situations that must be analyzed case by case

 

 

3. When and how to submit the statement?

 

 

• How is a tax year calculated?
  • Remember: the Spanish tax year is equivalent to the natural year (from the 1st of January to the 31st of December). Therefore, you need to declare your income occurred in that period.
• When to submit?:
  •  Furthermore, remember that from January to March you need to declare your worldwide assets through model 720 (if you have assets valued over €50.000).
  • You need to submit from the 1st of April to the 30th of June of the following year. For example, the income tax declaration for 2021 should be submitted from April to June 2022.
  • If you don’t submit it on time, you may incur a penalty that depends on how late you are. This penalty can range from 5 to 20% of the tax due, so make sure to save the date and submit all the documents on time.
• How to submit your income tax declaration?:
  • Your income tax declaration must be filed online. You can easily follow the steps by activating the English version of the website in the top right corner.
  • After submitting your statement, there are two possible results:
    •  Its status is to be paid (“a pagar”), so you must pay the resulting amount
    • Its status is to be returned (“a devolver”), in which case the government owes you money
  • Any payment or reimbursement will be done directly by the bank. As the Spanish Tax Authorities already have your bank account information, they will automatically charge or pay you the amount due.
  • Also, it is worth considering that in case you need to pay any specific amount, you can do it in two parts: 60% after filing your declaration, and the remaining 40% on the 5th of November.

 

4. What are the factors that affect the tax declaration amount?

 

The best answer to this question is: it’s a case-by-case study. Because your income tax declaration depends on many factors, such as:

 

• Your age
• Marital status
• If you are renting
• If you have any kind of disability
• If you recently bought any property
• How much income you have generated throughout the year
• And many other personal circumstances
• if you are an expat in Spain that receives income from these countries, you may benefit from double treaty conventions between your country of origin and Spain.

 

Depending on each of those factors, you may benefit from certain allowances and deductions, which will significantly reduce the total amount to be paid.

 

The specific incomes that will generate the obligation to pay income tax and be included in your income tax statement are:

 

• The income you receive from work (salaries, retirement pensions, pensions for disabled individuals, maternity benefits, unemployment benefits, etc.)
• The income from movable capital (dividends, interest on accounts, interest on deposits, etc.)
• The income generated from real estate capital
• The Capital gains: Benefits obtained from the sale of real estate or financial assets (for example, selling property or shares of a company).
• The income from economic activities as a self-employed individual.

 

5. How do you calculate the amount you need to pay?

 

 

The incomes listed above can be divided into two groups:

 

• General income taxable amount (the income tax consists of two parts, the part charged by the general government, and the part charged by the autonomous region) When adding the two parts we can get a progressive tax range like this:
  • The first part depends on the general government: from 9.5% to 22.5%.
  • The second part depends on the autonomous region: 12.5% to 25%.

 

• Taxable savings (base de ahorro): Taxable savings are the capital gains and part of the interests you receive. The taxation is presented in 3 levels:
  • Up to €6.000, 19%
  • From €6.000 to €50.000, 21%
  • Over €50.000, 23%

 

You might benefit from the following occasions, but it’s recommended to consult a tax lawyer to see if you fulfill the requirements :

 

• Tax allowance
• Pension plans and their contributions
• The mortgage or the rent of the house
• Donations to solidarity entities such as NGOs
• Extra regional deductions

 

Here in Adeslas, we know about the confusion and worries of most expats. And the income tax declaration is one of the many important issues concerning most expats. We want to ensure you the best benefits by protecting you with our medical insurance, the best expat insurance that meets all visa/ NIE requirements as well as reliable health insurance that can relieve you from any physical or mental discomfort.

 

If you would like to know more about this topic, check out one of the blogs listed below:

• How to apply for the student NIE/TIE in Spain for the first time?
• Guide to the use of online banks in Spain
• Guide on how to open a bank account in Spain
• Payroll in Spain: what you need to know as an entrepreneur
• Guide to taxes required when buying a house in Spain
• Guide to the tax deduction for maternity/paternity

 

Reference:

 

[1] Modelo 100. Impuesto sobre la Renta de las Personas Físicas. Declaración anual. - Sede Electrónica - Agencia Tributaria. (2021). Retrieved 8 September 2021, from https://www.agenciatributaria.gob.es/AEAT.sede/procedimientoini/G229.shtml 

 

Our content will be updated according to the most recent legislation. Last update: 17/07/2023