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Oh Spain, how did your tax return come to be so confusing? Well, these few lines give an answer to eventual doubts about your Declaration de Renta, including how to apply for a tax refund!

Lots are moving to Spain for a year or two to work and travel, enjoying the country. But what happens when it’s time for a tax return? Here some helpful tips about Spanish fiscal system!

Spain is one of the most wonderful countries in Europe, because of the warm climate, the beautiful landscapes and the still cheap cost of living. However, if you are there to work, it will come the day for you to fill out your tax return; indeed the deadline to send your tax return is the end of June but, as we’ll explain further, you can still submit your tax refund request after it. Here we explain what deductions and allowances you may be be entitled to!


Above all, let us introduce how the income tax rates work in Spain. Basically, the system is the so said “progressive”:  the more you earn, the more tax you pay. The tax rate is split between a state tax and a regional tax, as the country has 17 regional autonomies.


Income Tax Rates for the year 2018

From/To (Euros)

State tax %

Regional tax %

Total tax %

0>12,450

9.50

9.50

19.00

12,451>20,200

12.00

12.00

24.00

20,201>35.200

15.00

15.00

30.00

35,201>60,000

18.50

18.50

37.00

More than 60,000

22.50

22.50

45.00


Now that you know the numbers, who pays what?

Residents pay their income tax on their worldwide income, so adding what they earn (investments, properties, etc.) abroad; while non-residents pay taxes only on what they earn in Spain.

As a general rule anyone who is physically present in Spain for more than 182 days in a year (the Spanish tax year is the same as the calendar year) is considered to be tax resident in Spain, and therefore needs to submit an annual Spanish residents' tax return (Declaracion de la Renta).


As said before, you must file a tax return by the 30th of June. Late filings normally come with a fine. It may happen that your tax return does not include all deductions or benefits you are entitled to. In this case, you can recalculate the total amount of tax and claim a refund for the money you overpaid.

Spain law allows you to recalculate and ask for a tax refund up to 4 tax years before.

  

Taxpayers in Spain are granted certain Spanish tax deductions.

A basic personal allowance for everyone under the age of 65 is set at €5,550.

If you have children under 25 living with you, you can claim an additional allowance of €2,400 just for the first child, while you are entitled to a different amount for every other child you have.

Married couples can choose a conjoint declaration or a single one, according to what is more reasonable for them. By the way, a €3,400 allowance is granted to the second taxpayer, while a €5,550 goes to the first.


In general, you can claim tax deductions in Spain for:

  • payments into the Spanish social security system
  • pension contributions
  • the costs of buying and renovating your main home
  • charitable donations

Now that we wrote a bit about the topic, what other questions do you have? There are still other deductions applicable to your case and probably lots of money were lost in the last years due to a non-precise calculation of your tax return. In case you overpaid your tax, the Spanish government owes you a refund!

If you don’t know where to start, trying to collect all your payroll documents or your employer confirmations (Certificados de Retenciones/IRPF) could be a chaotic waste of time. In this case, a professional accountant is what you need! Contact us and find out if you are entitled to a tax refund!

We will check your previous tax return and recalculate for FREE your taxable income. Try now our online calculator and apply for your refund!

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