Spanish income tax rates 2017

Rates and allowances for Spanish resident income tax

Introduction

Spanish resident tax returns declaring income received in the 2017 calendar year will be submitted during May and June 2018. The deadline for submission of a return and payment of any tax due is 30th June 2018.

Taxes are split between central and regional governments. This used to be an equal split but since 2011 each autonomous region (comunidad) of Spain has been able adjust its own tax rates and bands so residents of each region pay slightly different rates of income tax.

Most foreigners will be considered Spanish tax resident if they were in the country for 183 or more days during the calendar year. Residents must submit a Spanish tax return including all their worldwide income, unless their income is lower than the thresholds described below. Any person becoming tax resident in 2017 must file a tax declaration regardless of income level for their first year of residency. 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, although often it is obvious. Related article: Spanish taxation of married couples

Changes for 2017

> Tax rates for 2017 have stayed largely the same as 2015 and 2016 with just a few minor adjustments. Allowances and deductions have largely stayed the same as well.

> The top rate for income is 48% in some regions (see below).

> The deduction for your main home only continues for those with income up to €24,000 that claimed previously and have rental contracts in place from before 1 January 2015.

Taxes in the regions

In Cataluña the top rate, payable on income over €175,000, is 48%.

In Andalucía the top rate, payable on income over €120,000, is 48%.

Madrid currently has the lowest tax rates in Spain, starting at 19% and going up to a maximum of 43.5%

SPANISH TAX RATES AND ALLOWANCES 2015 TO 2017

Tax on capital gains and investment income:
Income band                                  2015          2016 & 2017
Up to €6,000                                 19.5%                   19%
€6,000 to €50,000                         21.5%                   21%
Over €50,000                                23.5%                   23%

Tax on other income after allowances and deductions:
Income band                                  2015          2016 & 2017
Up to €12,450                                19.5%                  19%
€12,450 to €20,200                         24%                    24%
€20,200 to €35,200                         30%                    30%
€35,200 to €60,000                         37%                    37%
Over €60,000                                  45%                    45%

Most regions vary slightly from the above State-recommended rates. Tables for most regions can be found here

Personal allowance
Individual        €5,550 (at basic rate)
65 and over     €6,700
75 and over     €8,100

Married couple allowance
For second spouse in a joint return    €3,400 (at highest marginal rate)

Disability allowance
Grade 33-65                          €3,000
Grade 65-100                       €12,000
Grade 65+reduced mobility     €6,000

Child allowance
(under 25 living with you and income less than €8,000):
First child                        €2,400
Second child                    €2,700
Third child                       €4,000
Each additional child         €4,500
+for each child under 3     €2,800

Parent allowance
(mother, father or grandparent living with you with income less than €8,000):
Over 65     €1,150
Over 75     €2,550

General earned income allowance
(includes pension income)
Fixed amount                                         €2,000

Low income allowance
(includes pension income)
(only available if investment income is less than €6,500)
Earnings up to €11,250                           €3,700
Earnings between €11,250 and 14,450     €3,700 pro rata
Earnings over €14,450                            €0

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  €12,000

Bank interest and other investment income €1,600

Rent €1,000

 

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