Tax rates in Spain in 2020: If you are searching for interest rates and allowance amounts of Spain, then you are on the right page. The article outlines all the authentic information one needs to know about Spain tax rate structure.
Spain Tax Rate Structure
1) The rates of income tax for the year 2020
Just because of the political deadlock in Spain, the budget for 2020 was not passed and hence the earlier allowances and interest rates (same as the year 2018-2019) continue to be used for the current year 2020.
|From (Euros)||To (Euros)||State tax %||Regional tax %||Total tax %|
2) Capital Gains Tax Rates
|First 6,000 Euros:||19%|
|50,000 + Euros:||23%|
4) Wealth Tax Rates
The Wealth tax was abolished in Spain on 1st January 2009 but soon reintroduced temporarily for the years 2013 and 2012. After this, the government started imposing this tax from 2015 onwards.
The present tax-free allowance is Euros 700K with the additional 300K Euros against the amount of the taxpayer’s chief residence.
5) Allowable Depreciation
For some depreciable assets, the straight-line method is used for calculation. For new tangible assets having the expected useful life of at least three years, Reducing balance method can be used.
|straight-line rate % (Minimum)||Useful life years (Minimum)|
|Buildings and other constructions||3||68|
|Fixtures and Office Equipment||10||20|
Depreciation must be accounted for the deductible accounts. Within certain above limits, leaving: Accelerate allowance may be allowed for new assets or securities located in Spain, where it can be displayed that actual depreciation took place.
6) Other necessary taxes in Spain
For holding firms of Spanish real estates that are resident in non-treaty countries, a yearly “penalty tax” is obligatory and it is estimated as 3% of the cadastral worth of the property.
7) Declaration threshold of Income-tax
The taxpayer has to file an annual rate of return if any of the limits listed in the table exceeds.
|Income from employment:||22,000 Euros|
|Savings income and Capital gains:||1,600 Euros|
|Rental income:||1,000 Euros|
8) Value Added Tax (VAT)
The payment is quarterly, usually made within twenty days of the month-end. A monthly charge applies to the businesses with net turnover above six million Euros.
For the firms making both exempt and taxable supplies, there is a pro-rates method for partially exempt estimation.
- Exemptions for exports
- Resale of property
- Private lettings
- Some cultural activities
- Privileges for internal transactions
- Health and medical service
- Conveyance of designate land as not for housing
- Public postal services
- Financial transactions
- Public services
- Insurance Transactions
Deductibility of VAT
VAT incurred concerning taxable services and goods is recoverable.
In the case when a vehicle is used for both personal use and business, 50% of the vehicle amount and associated expense is not recoverable for Spanish Value Added Tax purposes.
Value Added Tax on travelling expenditures which are not deductible for income tax purposes and organisation is not recoverable.
Stockbreeding, Agriculture and fishing
Second-hand goods, antiques and art objects
Retail trade- in this scheme, aggregate net VAT is paid to suppliers, rather than the Tax offices in Spain.
9) VAT on Property
|New homes||–||AJD (stamp duty) VAT|
|Second-hand homes||–||AJDITP (property transfer tax)|
|lots or Villa & Commercial premises from the promoter||–||AJD VAT|
|AJD/ ITP amounts can change according to area|
The Bottom Line
The direct taxation system in Spain mainly comprises two types of personal income taxes. The first is Personal income tax or PIT, for those who reside in Spain for tax purposes and second is Non-resident income tax or NRIT, for those who do not reside in Spain for tax purposes (who receive income in Spain). For more information regarding the basic tax structure of Spain visit the site investhub.agency.