Income Tax in Spain: Am I liable to pay it?

Income Tax in Spain: Am I liable to pay it?

If you are living or working in Spain, you will be liable to pay Spanish taxes on your income and assets and will need to file a Spanish tax return.

Who is a resident?

The first question to answer is who is considered a resident for tax purposes. This consideration must not be confused with the legal status of resident, which I have explained in detail y my previous post « Living and working in Spain ».

Natural persons (private individuals) are considered resident in Spain for tax purposes if they remain in Spain for more than 183 days of the calendar year.

Anyone who does not find themselves in this situation will be considered a Non-Resident Income Tax payer (see our previous post « Non-Resident Income Tax: What is it and why do I have to pay it? »).

Who has to pay taxes in Spain?

As a Spanish resident, you will need to submit a Spanish tax return and pay Spanish Income Tax, at progressive scale rates, on your worldwide income if:

  • your annual income from one source of employment is over 22.000 €;
  • you are self-employed or run your own business;
  • you receive rental income of over 1.000 € a year;
  • you have capital gains and savings income of more than 1.600 € a year;
  • it is your first year declaring tax residency in Spain;

Among other examples.

You will have to declare all overseas assets worth more than 50.000 € (using Form 720). Your taxable income is the income left after deductions for social security contributions, pension, personal allowance, professional costs, etc.

Do I have to register for taxation in Spain?

You will need to register for tax in Spain with the Spanish Tax Authority, whether you are a resident or non-resident.

However, in recent years the police and the Foreign Office have begun registering anyone who passes through their system, which has unfortunately resulted in many foreigners being incorrectly registered. It is therefore very important to make sure what you are considered to be liable for by the Spanish Tax Office, as many have been registered as tax residents without their knowledge.

What are the rates?

Personal Income Tax is split between state and region and while the state has reduced taxes and simplified the income bands, this has not happened right across Spain. Each region sets its own tax bands and rate of income tax, so how much income tax you pay depends on where you live.

Income Tax rates





State tax


Regional tax


Total tax


0 12.450 9.5 9.5 19
12.450 20.200 12 12 24
20.200 35.200 15 15 30
35.200 60.000 18.5 18.5 37
60.000 + 22.5 22.5 45

If you are resident in Spain you will be subject to Spanish taxation on your worldwide income.

When do I have to pay?

The end of June is the deadline every year, by which time residents must have filed their annual Income Tax return for the previous year, and you can start submitting your tax returns from the beginning of April (exact dates vary each year).

Not submitting your tax return or submitting it incorrectly can result in expensive fines, so it is important that you seek professional advice and assistance for peace of mind.

Gabriella Mary Trussler Rowland
4408 Ilustre Colegio de Abogados de Almería

Why is it more important than ever to have a Spanish Will?

Why is it more important than ever to have a Spanish Will?

You may or may not know that a European regulation has been approved to regulate questions of jurisdiction, applicable law and enforcement of all successions where the deceased has passed away on or after the 17th August 2015 (Regulation No. 650/2012 of the European Parliament and of the Council of 4 July 2012).

This regulation can cause difficulties for those foreigners who have not made certain provisions regarding their last Will and Testament, especially for those habitually resident in Spain.

We must pay particular attention to the provisions of Articles 21 and 22 of the regulation. On the one hand, Article 21 establishes that “Unless otherwise provided for in this Regulation, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.” But on the other hand, Article 22 points out that “A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.”

But what is the difference between these two options? And how can this be resolved?
For those of you who don’t know, Spanish inheritance law provides a certain amount of protection for legal heirs which, to those who originate from other jurisdictions, seems completely foreign. Certain inheritors are deemed, under Spanish law, to be what are called “compulsory heirs”, entitling them to a legal minimum share of the deceased’s estate.

The new European regulation sets the place of habitual residence of the deceased as the sole criteria for determining jurisdiction, as well as the applicable law. This being the case, it means that any foreigner that is deemed to be resident in Spain who does not make the necessary provisions in their Spanish Will to ensure the application of their national law on their death, as opposed to that of their habitual residence which is automatic, will be limited regarding the distribution of his/her estate. Even if you are not legally registered as a resident here, the Spanish authorities may consider you to be resident here based on other external factors.

To help you understand this better, here is a practical example of what the application of Spanish law to your inheritance entails.

Let us imagine that you are married with 2 children and the total value of your estate amounts to 150,000 €. Spanish law would require, upon death, that your estate be divided in the following way:

  • « Legítima »: 1/3 of estate (50,000€) must be left to all your “compulsory heirs” in equal parts (25,000€ each).
  • « Mejora »: 1/3 of estate (50,000€) must be left to “compulsory heirs” but may be distributed in any way the testator sees fit (you can leave it all to one child, to two of them or to all three of them, but to no-one else).
  • « Libre disposición » or « Tercio libre »: 1/3 of estate (50,000€) can be disposed of however, and to whomever, the testator wishes (legal heir or not).

There are autonomous regions with their own civil law in this matter, and they are Aragon, the Balearics, Catalonia, Galicia, Navarre and the Basque Country.

What does this all mean? It means that if you have made a Spanish Will, but not included the proper provisions to ensure the application of your national law on your death, any provisions for the distribution of your estate that overstep these limitations under Spanish law will be ignored. This could mean a great amount of inconvenience for your heirs in trying to have your Will recognised on your death.

It is for this reason that it has become strongly advisable for any foreigners with assets in Spain to make a Spanish Will for their property in Spain, or update it if necessary. Make sure to seek appropriate legal advice to make sure it complies with the new requirements of Regulation No. 650/2012 and to avoid the automatic application of Spanish law on death, which can result in your wishes not being abided by because of the legal restrictions Spanish inheritance law places on the freedom of the testator to dispose of his estate at his own discretion.

Gabriella Mary Trussler Rowland
4408 Ilustre Colegio de Abogados de Almería