At Marfour International law firm we have a team of tax lawyers’ expert in Spanish taxation system and doble taxation.  Tax is a complex subject and very particular of each country.  In this article our aim is to summarize the different categories of the Spanish Tax system.  

Taxes in Spain for freelancers and individuals

Paying taxes in Spain is compulsory both for companies and citizens. In this regard, Spain is the fourth country in the EU that charge the highest tax percentages. There are two main types of taxes in Spain:

  • Direct taxes, which depends on your income or assets
  • Indirect taxes such as the VAT on consumer goods

Taxation in Spain for the self-employed is mainly composed of 6 different direct and indirect taxes:

  1. Personal Income Tax or IRPF

This tax records the income obtained within a year to both residents and non-residents in Spain. It varies from one autonomous community to another (19% to 48%). IRPF for non-residents, coming from the EU, the fixed tax rate is 19% and 24% regarding non-resident, coming from countries outside of the EU.

  • Capital gains tax

This tax corresponds to the percentage that mut be paid based on the profit obtained when selling a property in Spain. Again, there is a distinction between residents, non-resident living in the EU and non-resident living outside the EU.

Concerning the first category, there is a tax rate between 19% and 23%.

For non-residents living in the EU, there is a fixed rate of 19%.

For non-residents living outside the EU, there is a flat rate of 24%

  • Wealth tax

This tax is paid once a year based on the assets or wealth. It is a progressive percentage ranging from 0.2% to 2.5% applied on the value of the property or asset that exceeds the bonus of 700,000€ and it applies both to residents and non-residents.

  • Inheritance and gift tax

This tax is paid by the new owner of a business by inheritance or by donation.

  • VAT

VAT is a well-known indirect consumption tax assessed on the value added to goods and services. VAT in Spain is 21%.

  • Non-resident income tax

This tax applies to those who do not reside in Spain. A person who lives less than 183 days per year is considered non-resident.

Taxes for companies:

  1. Corporate Income Tax

It is a direct fixed tax of 25%, that records the result of the economic activity of a company.

  • Transfer Tax

This tax records the different operations that can happen throughout the life of a company as capital increase, mergers etc. However, there are autonomous communities that do not charge this tax.

Our English-speaking lawyers can help you to understand our Spanish tax system and file your tax declarations. We have help thousands of people in the same situation as you. Our relationship with international accounts over the whole world allowed us to give practical solutions to our clients and implement doble taxation conventions benefits.