Taxes in Spain

Rusol Prime have a large experience in managing taxes for companies registered in Spain, Andorra and France. Our experts provide with detailed information on Spanish taxes and will assist with tax planning for your business.

Taxes are paid in Spain by each legal entity, which is assigned a tax identification number CIF. When registering a company, it is obligatory assigned by the fiscal authorities and enters the database of the State Agency of Tax Service. From there they will monitor how regularly you pay taxes on income, on the activities of the enterprise, economic transactions, etc. The first thing to note for entrepreneurs who decide to start their own business in Spain - taxation here is carried out at the state, regional and local levels. Since the status of autonomies is not the same, some regions, such as Catalonia, have the authority to independently regulate tax rates, while Navarra and the Basque Country generally have the right to introduce their own types of taxes. Also, a special tax regime is assigned to the Canary Islands. In addition to geography, the amount and types of taxes in Spain are influenced by the type of activity of the company, its organizational and legal form and many other factors. Ignorance of the specifics of the legislative framework, which is periodically amended, is fraught with financial losses and serious problems with the law. To avoid them, we recommend contacting Rusol Prime lawyers. These are professionals whose daily practice is directly related to the taxation of companies registered in Spain, Andorra and France, both by citizens and residents of the country and by foreign investors. With their help, you can not only understand such a complex issue, but also build the most logical and economical scheme for paying taxes specifically for your company.

Property taxes in Spain

Spain is one of the most popular countries for overseas property buyers.

Annually, both Spaniards and non-residents, all homeowners pay property and wealth taxes, as well as income tax. When renting out real estate, investors also bear the cost of taxes on rental income and capital gains.

Tax rates in Spain

VAT

10 or 21%

Transfer tax
property rights

6-10%

Registration fee
(including notary services)

0.5 - 2.0%

City tax
for real estate depending on the region

0.405 - 1.3%

Wealth tax
(property value
over 700 thousand euros)

0.2 - 2.5%

Capital gains tax

19%

Inheritance tax

7.65-34%

Income tax

19-45%

Corporate tax

25% (15 - for 2 years for a new
established companies)

Real estate income tax
(if the property
For Rent)

24% (19 - for EU residents)

Real estate income tax

24%

Real estate purchase taxes

When buying a property, taxes in Spain are paid by both parties: the seller and the buyer.

Usually, the seller pays a commission to the agency, and the buyer, in turn, pays for the services of a notary and pays a registration fee of 0.5–2.0% of the value of the property.

When buying a primary residential real estate, the buyer pays VAT (impuesto sobre el valor anadido or IVA) in the amount of 10%, when purchasing a land plot or commercial object - the rate is 21%. Together with VAT, the buyer pays a legal act tax (Actos Jurídicos Documentados, AJD) - 1.5% of the value of the object.

In the case of buying real estate on the secondary market, the buyer pays - tax on the transfer of ownership. The rate varies from region to region and ranges from 6 to 10%.

Tax rates on the transfer of property rights by region

Alava

Andalusia

8-10

Aragon

Asturias

8-10

Balearic Islands

8-10

Vizcaya

Valencia

ten

Galicia

Guipuzcoa

Canary Islands

6.5

Cantabria

8 or 10

Castile-La Mancha

Castile and Leon

Catalonia

ten

La Rioja

Madrid

Murcia

Navarre

Extremadura

8, 10 or 11

Ownership taxes

Upon taking over, owners pay a municipal property tax (impuesto sobre bienes inmuebles, IBI). Depending on the region, the rates range from 0.405 to 1.3% of the cadastral value. This tax is annual but paid quarterly. The amount for property owners in Spain varies from 200 to 800 euros per year.

Annual property tax,%

Avila

0.57200

Madrid

0.60424

Alicante

0.84700

Malaga

0.72320

Albacete

0.40500

Murcia

0.79970

Almeria

0.49000

Oviedo

0.83160

Badajoz

0.91300

Ourense

0.54000

Barcelona

0.82500

Palencia

0.60280

Burgos

0.46200

Palm

0.80800

Valencia

1.07100

Pontevedra

0.70400

Valladolid

0.67580

Salamanca

0.79200

Guadalajara

0.66000

Zamora

0.62480

Granada

0.74030

Santander

0.52700

Girona

0.88600

Zaragoza

0.64911

Cadiz

1.11100

Seville

0.93170

Caceres

0.82500

Segovia

0.49400

Castellon

0.88000

Soria

0.45760

Cordoba

0.76090

Ciudad Real

0.98000

Cuenca

0.68000

Tarragona

1.02080

La Coruña

0.59500

Tenerife

0.68750

Las Palmas

0.73700

Teruel

0.67100

Leon

0.86900

Toledo

0.42000

Logroño

0.58300

Huelva

1.16600

Lugo

0.71500

Huesca

0.97200

Lleida

0.66500

Jaén

0.66000

The taxation of income from Spanish real estate depends on the status of the owner (tax resident or non-resident in Spain). Spanish tax resident is a person who stays in the country for more than 183 days in a calendar year. For non-residents, only those incomes that are received in Spain are encumbered with mandatory payments. Income must be declared by June 30 of each year.

When renting real estate, the income of a non-resident is 24% (for EU residents - 19%). The tax is payable quarterly.

Income tax rates (impuesto sobre la renta) for residents are 19–45%. The rate for non-residents is 24% (19% if the taxpayer is a resident of one of the EU countries).

In the event that the value of the assets exceeds 700 thousand euros, then the property tax (impuesto sobre el patrimonio) is also paid. The tax is payable in June for the previous year and is calculated based on the net worth on a progressive scale: rates vary from 0.2 to 2.5%. Wealth means real estate, income from professional activities, bank deposits, sources of temporary income, luxury goods (jewelry, fur coats, sports cars, yachts, airplanes), art and antiques.

Wealth tax rates

Taxable
amount, euro

Rate,%

Maximum
amount, euro

Up to 167 129

0.2

1334

167 130 - 334 253

0.3

1836

334,254 - 668,500

0.5

12507

668,501 - 1,337,000

0.9

18 523

1,337,001 - 2,673,999

1,3

125,904

2,674,000 - 5,347,998

1.7

171,362

5 347 999 - 10 695 996

2.1

183670

More than 10 695 997

2.5

- Income tax rates (impuesto sobre la renta) for tax residents of Spain from 2016 - from 19 to 45%. The rate for non-residents is 24% (19% if the taxpayer is a resident of one of the EU countries).

Income tax rates in Spain

Threshold, euro

Rates,% (2020)

12 450

20200

thirty

35,200
(34,000 in 2015)

60,000

Corporate tax for legal entities (impuesto sobre las utilidades de sociedades). The standard rate is 25%, for newly created companies - 15% (this rate will be valid for two years from the moment the company makes a profit). Companies with profits of more than 1 million euros must also pay municipal tax (IAE). Tax rates depend on the type of economic activity of the company, the area of its commercial premises and other parameters established at the level of a particular municipality.

For companies resident in countries or territories that belong to the offshore zone and own or own any real estate in Spain, a special payment is established, which is calculated based on the assessed value at a rate of 3%.

Mandatory payments upon withdrawal from property rights

On the sale, a tax is paid on the difference between the purchase price and the sale price - capital gains tax (impuesto sobre la venta de inmuebles). For non-residents, the rate is 19%.

In this case, the income of companies is taxed at a rate of 25% (or 15% for newly created companies within the first two years from the date of profit).

Also, real estate sellers pay a tax on the increase in the value of urban land (Impuesto sobre el incremento de valor de los terrenos de naturaleza urbana, IIVTNU). The rates depend on the specific municipalities.

In Spain there is inheritance tax (impuesto de sucesiones). Rates range from 7.65% (for the first 7,933 euros of the total amount or value of the inheritance) to 34% for 797,555 euros or more. The further the degree of kinship, the higher the rate.

Please note that tax information in Spain is basic.