Spanish income tax rates 2012 to 2014

RATES AND ALLOWANCES FOR SPANISH RESIDENT INCOME TAX

Introduction

Spanish resident tax returns declaring income received in the 2014 calendar year will be submitted during May and June 2015. The deadline for submission of a return and payment of any tax due is 30th June 2015.

Most foreigners will be considered Spanish tax resident if they were in the country for 183 or more days during 2014. They must complete a tax declaration including all their worldwide income unless their income is lower than the thresholds described below. Anyone becoming tax resident for the first time (because they moved to Spain during 2014) must file a tax declaration regardless of income levels. Related article: Do you need to do a Spanish tax return?

Married couples can make a joint return or declare separately. The tax implications of separate taxation versus joint taxation are significant and couples should calculate the best option, though often it is obvious - see related article: Spanish taxation of married couples

Changes

> Significant "temporary" tax rises for the tax years 2012 to 2014 push the top rate of tax to 52%

> The deduction for cost of principal residence was originally meant to have been scrapped for all taxpayers with income greater than €24,000 but this change has been cancelled so the deduction is currently still available

> Increased deduction for income earned from rent (landlords were taxed on 50% of rent received, now 40%)

Extra taxes in the regions

Since 2011, people in different regions pay different top rates of income tax. Local surcharges have been added by autonomous regions such as Andalucia and Cataluna. For example, the income tax rate in Andalucia is 1% higher than the rates in the table below for incomes above €80,000, 2% above €100,000 and 3% above €120,000

In Catalonia the top rate, payable on income over €150,000, will be even higher at 49%

Selected other top rates:  Asturias 48.5%  Cantabria and Extremadura 48%

Madrid and Valencia actually have slightly lower rates of tax than the national scale below

SPANISH TAX RATES AND ALLOWANCES FOR 2012 TO 2014

  • Rate for capital gains and investment income:
  • (Dividends up to €1,500 are tax free)
  • €0 - €6,000                  21%
  • €6,000 - €18,000          25%
  • more than €18,000       27%

    Rate for other income after allowances and deductions:

  • Income band                           Tax rate
  • €0 - €17,007                           24.75%
  • €17,007 - €33,007                    30%
  • €33,007 - €53,407                    40%
  • €53,407 - €120,000                  47%
  • €120,000 - €175,000                49%
  • €175,000 - €300,000                51%
  • more than €300,000                 52%

Personal allowances

Individual €5,151 (at the basic tax rate of 24.75% regardless of income level)

65 and over €6,069
75 and over €7,191

Disability allowance

Grade 33-65 €2,316
Grade 65-100 €7,038
Additional if third-party care required €2,270

Child allowance (less than 25, living in and income less than €8,000):

First child                €1,836
Second child            €2,040 
Third child               €3,672 
Fourth & additional children €4,182

Additional for child under 3 €2,244

Parent allowance (mother or father living in with income less than €8,000):

Over 65      €918
Over 75      €1,122

Earned income allowance (includes pension income)

Earnings up to €9,180         €4,080
Earnings over €13,260        €2,652
(sliding scale applies for income between the two limits)

Dividends receivable tax free €1,500

Declaration thresholds

Allowable levels of income before a declaration must be made:

Earned income already subject to employer deductions (if other income less than €1,500)  €22,000

Reduced limit if earned from more than one employer  €10,200

Bank interest and other investment income €1,600

Rent €1,000

 

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