Personal Income Tax Spain >> La Renta & IRPF Explained

Spanish personal income tax (Impuesto sobre la Renta de las Personas Físicas or IRFP) is a complex process for Expats in Spain that you’ll hear referred to as la Renta. Anyone who is a tax resident in Spain must file an annual personal income tax Spain return declaring all Spanish and international income. We’ll look at timings, individual tax rates, and how to file your Spain income tax declaration and return.

Note: In the sections below, we’ll cover how this impacts Expats under the Beckham Law and non-residents earning income in Spain.

Understanding La Renta

“La Renta” refers to the annual Spanish income tax return filing or self-assessment. It is officially known as “La Declaración de la Renta,” which translates to “the income tax declaration.” This process involves submitting a detailed income tax return detailing all income earned during the previous fiscal year, along with deductions and credits. It’s how individuals settle their tax obligations based on their income. 

La Renta is how you pay your Personal Income Tax in Spain (IRPF).

Key 2024 Timings for “La Renta”

You can submit your Spanish personal income tax return for the 2023 tax year during a window from April – July.

• Opening for 2023 Tax Year Return Submissions: April 3, 2024
• Deadline for Tax Returns Submission (Online): July 1, 2024

• Appointments for In-person Assistance: May 29, 2024 – June 28
• More Information and Appointments: Agencia Tributaria

Important: Spain does not have a split-year treatment, you are either resident or not resident for the whole tax year (January 1 – December 31).

READ ALSO: Spanish Tax System Guide – Expat Essentials 2024

Spain Personal Income Tax Brackets and Rates

The IRPF is a progressive income tax, which means that the tax rate increases as the taxable base (the amount of income subject to tax) increases. It covers earnings from various sources, such as employment, business activities, certain capital gains, and income from property.

Important: Your tax rate combines the national and regional government rates. So, you’ll need to find the rate for your autonous community. The usual rate (without regional variations is):

General Taxable Income in Spain Rates

Your general taxable income includes all income that isn’t classified as savings taxable income: 

• All employment income, including wages, salary, or fees.
• Capital gains that don’t come from selling assets, like winning the lottery.
• Any income assigned to you by law, like allocations or attributions.
• Interest and other earnings from lending your own money to a related company.

Spain Personal Income Tax Rates for 2023 (2024 Tax Returns)

General Rates:

Income Bracket (€)	Tax Rate (%)
Up to 12,450	19%
12,451 – 20,200	24%
20,201 – 35,200	30%
35,201 – 60,000	37%
60,000 – 300,000	45%
Over 300,000	47%

Important Note: These are the combined rates of national and regional taxes (typical scenario). You’ll need to apply your regional tax rates to understand your personal pre-deduction taxation rates.

Savings taxable income 

You’ll be required to pay tax on various types of savings and investment income at a different rate. These income streams can include:

• Dividends and other earnings from your investments in companies
• Interest and other returns received from money lent to others
• Income from life and disability insurance policies
• Capital gains resulting from the sale of assets

The tax on savings and investment income is calculated at rates different from those for employment income. As of 2024, the tax rates for savings income are: 

• 19% on the first €6,000 of taxable savings income
• 21% on the next €6,000 to €50,000
• 23% on the next €50,000 to €200,000
• 27% on the next €200,000 to €300,000
• 28% on any amount over €300,000

Note: The Basque Country and Navarra have different savings tax rates.

Spain’s income tax rates for the 2023 tax year are unchanged from 2022.

READ ALSO: Beckham Law in Spain >> How To Pay Much Less Spanish Tax

Deductions and Allowances

Important: Each autonomous community sets its own allowable deductions. For example, educational expenses may be deductible in the Canary Islands and Extremadura but not in Catalunya or Valencia.

These are just some of the many deductions that may be available for you to claim against your personal tax.

Type of Deduction	Description
Personal Allowance	Reduces taxable income based on the taxpayer’s profile.
Dependent Children Allowance	Incremental based on the number of children.
Dependent Relative Allowance	For supporting elderly or disabled relatives.
Employment Contributions	Social security payments made by employees.
Professional Expenses	Costs related to earning income.
Housing Expenses	Related to the purchase and improvement of a primary residence.
Start-Up Investment	Generous deductions for investments in new businesses.
Pension Contributions	Contributions to personal pension plans.
Educational Expenses	Costs for education, including tuition fees.

Remember: not all deductions are available in all autonomous communities. Understanding your personal deductions and tax-free allowances can significantly reduce your taxable income in Spain. Here are more details of some tax deductions and allowances that you should explore: 

Personal Allowances

Personal Allowance: Each taxpayer is entitled to a basic personal allowance that reduces taxable income. The basic personal allowance for people under 65 is €5,550.

Age-related Allowance: Once you reach 65, the allowance rises to €6,700, and from 75, it increases again to €8,100 per person.

Family Allowances

There are also several other allowances, including married couple allowance, child allowance (dependent on the number of children under 25 you have living with you), and disability allowances. 

Dependent Children: if you have children under 25 living with you, you may be able to claim a personal allowance for each child: 

• 1st child: €2,400
• 2nd child: €2,700
• 3rd child: €4,000
• 4th child: €4,500
• Each additional child (providing they are under three years of age): €2,800

Dependent Relatives: If you support relatives like parents or grandparents over 65 or disabled relatives, you may be eligible for allowances between €1,150 and €2,550.

Deductions for Employment and Professional Activities

Employee Contributions: You may be able to claim deductibles for social security contributions, union dues, mutual benefit society fees, and similar expenses.

Professional Expenses: You may be able to deduct costs directly related to earning professional income. For those who work from home, this may be a portion of their water, electricity, gas, telephone, and Internet bills.

Investment in Startups: Louis Williams, our Spanish cross-border specialist, highlights this little-known tax deduction available to everyone. You can deduct 50% of your investment amount, an increase from the previous 30% rate. The maximum investment amount that qualifies for the deduction is now € 100,000, and the startup must be a commercial company (S.A or S.L.) and not publicly traded.

Housing Deductions

Primary Residence: Deductions for expenses related to buying and renovating a primary residence, although these have been restricted in recent years.

Investment Deductions

Pension Contributions: Contributions to pension plans can reduce taxable income within limits set by law.

Educational Deductions

Education Expenses: Allowances for education costs, including tuition fees for children’s and adult education, are allowed in some autonomous communities.

Our Advice: Speak to a tax expert to understand your available deductions in your region. There are endless local varients – for example, you can claim up to €50 for each bicycle you purchase in La Rioja!

How to File A Personal Tax Return in Spain

Here are the steps to filing your La Renta.

Preparation

1. Speak to a Spanish cross-border taxation specialist to help prepare your tax declaration in Spain. While there is no requirement to get advice, we strongly recommend this.
2. You’ll need your tax number – see our guide to get your N.I.E. (Número de identidad de extranjero) and NIF (número de Identificación fiscal).
3. We recommend gettinga official digital certificate (Certificado electrónico). 

Forms (Modelos)

• Modelo 100 – Spanish tax residents 
• Modelo 149 – Non-residents for taxation
• Modelo 210 – Non-resident property owners

Filing Methods

1. Your accountant or tax representative can file on your behalf using your digital certificate.
2. You can submit your return online.
3. You can personally submit your return to a tax office or an authorized Spanish bank (where you hold an account).

Reminder: The Spanish tax return deadline is July 1, 2024 

Spain Income Tax Calculator

Tax calculators are valuable tools that can help you estimate your tax liability based on income, deductions, and other relevant factors. Remember, these are for guidance only.

• Agencia Tributaria Calculator: This official tool provided by the Spanish Tax Agency helps you estimate your income tax based on the latest tax rates and rules applicable in Spain. Access the calculator here.

Professional Tax Advice

While online tools provide an excellent preliminary overview, professional tax advice is crucial, especially for complex cases or when dealing with multiple countries’ tax systems.

1. Look for a tax advisor with extensive experience dealing with expat tax matters, particularly for individuals from your home country. This expertise ensures they are familiar with both Spanish tax laws and any international considerations relevant to your situation.
2. Recommendations from other Expats or reviews can also provide insights into the advisor’s reliability and service quality.
3. Ensure clear communication; your advisor should be able to explain complex tax issues in a language you understand fully, whether in English or another preferred language.

Here are the top two tips from Louis Williams, our Spanish taxation specialist partner:

1. Spain has just massively increased the tax break for start-up investments, where investing €1,000 can take €500 straight off your tax bill. Anybody looking for investment diversification and special tax benefits has a remarkable opportunity with this new tax break.

2. Check in for 2023 on the list of local tax breaks. There are usually 10-20 tax breaks available in each autonomous community. None are worth that much money individually, but they can add up. Your Spanish tax partner can guide you through the opportunities or search the Agencia Tributaria website.

Special Considerations for Expats

As an Expat living in Spain, your personal income tax planning can get complicated. Here are several concepts you’ll need to understand and consider.

Do You Still Have to File A Tax Return In Your Home Country?

Your obligation to file tax returns in other countries depends on several factors (and the DTTs manage these responsibilities).

1. Your Citizenship: Some countries (including the US) require an annual tax declaration based on your citizenship, so US citizens still have to file a US annual tax return. However, this doesn’t mean you’ll have to pay US tax because double tax treaties (DTTs) mean you are not taxed twice on the same income.
2. Non-Spanish Earnings: If you earn income outside of Spain, the country where you earn the income may require a personal income tax return. For example, we earn both rental and dividend income in Australia. We report and pay personal income tax in Spain on the rental income but report and pay tax on the dividends in Australia. If you earn any income outside of Spain, getting professional taxation advice is crucial to ensure you report the income in the correct country and don’t pay excess tax.

Double Taxation Agreements / Treaties (DTT)

Spain has double tax treaties (DTTs) with around 100 countries, including the USA and the UK. These treaties set out which countries will tax you on which income – the crucial part is that you won’t pay tax twice on the same income. 

Read more in our Guide to Spanish Taxation. 

Worldwide Income and Tax Liability

Spain taxes foreign income using La Renta. Spanish tax residents report and pay Spanish personal income tax on global foreign income, including from employment, rental properties, or investments. 

Read more about Spanish Tax Residence. 

Non-Resident Taxation

If you live in Spain for less than 183 days a year but earn income in Spain, you may pay non-resident tax and tax rates (a fixed 24%). 

Read more about tax in Spain for non-residents. 

The Beckham Law

The Beckham law allows some Expats to pay non-resident tax rates (so a flat 24%) even though they live in Spain. 

See our detailed Beckham Law in Spain guide. 

Wealth and Solidarity Taxes

You may have to pay an annual tax on worldwide net assets. This complex tax differs by autonomous region. 

See our Spain Wealth Tax Explainer + Wealth Tax Calculator. 

Personal Income Tax Spain

Getting your head around your tax obligations as an Expat in Spain can be scary. Spain’s reputation as a high-taxing country can be true if you don’t manage your tax situation effectively. 

As the old saying goes, the best time to start your tax planning is last year. The second best time is today—you can book a consultation with our Spanish and cross-border personal income tax specialist here.

Personal Income Tax Spain >> Glossary

English Translation	Spanish Term	Description
Income Tax Return	Declaración de la Renta	The annual process whereby individuals report their income from the previous year to the tax authorities.
Personal Income Tax	Impuesto sobre la Renta de las Personas Físicas (IRPF)	A tax on individual earnings that changes based on how much one earns and other personal details.
Wealth Tax	Impuesto sobre el Patrimonio	The amount of income or assets that is actually taxed after accounting for deductions and exemptions.
Taxpayer	Contribuyente	A person or organization that has tax obligations.
Tax Agency	Agencia Tributaria	The organization in Spain that is responsible for collecting and managing taxes.
Fiscal Year	Ejercicio Fiscal	Measures that reduce the amount of tax owed for reasons such as investments or family responsibilities.
Taxable Base	Base Imponible	The amount of income or assets that is actually taxed after accounting for deductions and exemptions.
Exemptions	Exenciones	Specific conditions that allow taxpayers to reduce their taxable income.
Deductions	Deducciones	Expenses or specific outgoings that can be subtracted from gross income to reduce the tax payable.
Tax Return Deadline	Fecha Límite para la Declaración	The last date by which the tax return must be submitted each year.
Tax Rates	Tipos Impositivos	The percentages at which different levels of income are taxed.
Non-resident Income Tax	Impuesto sobre la Renta de No Residentes	Tax on income earned in Spain by individuals who do not reside in Spain.
Tax Bracket	Tramo Impositivo	The divisions at different income levels determine the tax rate applied.
Tax Relief	Alivio Fiscal	Measures that reduce the amount of tax owed, for reasons such as investments or family responsibilities.

Personal Income Tax In Spain – La Renta FAQs