Spain Personal Income Tax Rate

4 July 2019

It’s tax season here in Spain, so it’s time to start making arrangements to file the correct Modelos (tax forms) and make any necessary payments.

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It’s tax season here in Spain, so it’s time to start making arrangements to file the correct Modelos (tax forms) and make any necessary payments. Tax returns for income earned in 2018 are due no later than June 30, 2019. In this post, you’ll find Spain’s personal income tax rates for 2019 to help you plan. To make sure everything goes smoothly, we recommend seeking professional help from a legal or tax expert in Spain, especially if this is your first time filing taxes here.

Spain personal income tax rates 2019

Before you can determine your Spain personal income tax rate for 2019, you need to know whether or not you are considered a resident for tax purposes. Basically, if you spend more than 183 days out of a year in Spain, or your main “vital interests” are here, you are a fiscal resident and will be taxed at the rates for residents. Otherwise, you are nonresident and have a different rate.

Let’s begin with nonresident income tax rates simply because they are less complicated: all earned income (salary, rental income, imputed income from property ownership, etc.) obtained in Spain is taxed at a flat rate of 24%. No tax-free allowances or deductions are available. Capital gains are taxed at a reduced rate of 19%.

Fiscal residents in Spain are taxed on a progressive scale and are given tax-free allowances based on their age and number of dependents. After accounting for this allowance, income up to €12,450 is taxed at 19%; from €12,450 to €20,200 at 24%; from €20,200 to €35,200 at 30%; from €35,200 to €60,000 at 37%; and remaining income above €60,000 is taxed at a rate of 45%.

Personal income tax rates in Europe

So, how does this compare to other countries that are members of the European Union? Although taxation schemes differ markedly from one country to another, which makes it difficult to compare apples to apples, Spain’s personal income tax rates are generally on the lower side for an EU member state.

With a top marginal 2019 tax rate of 45%, Spain has a more favorable tax rate than countries such as Austria (55%), Belgium (50%), Denmark (51.95%), Finland (67%), France (49%), Germany (47.475%), Greece (65.67%), Netherlands (51.75%), Norway (46.4%), Portugal (82.75%), Sweden (69.8%), and the UK (47%).

When looking at these numbers, though, it’s important to consider various other factors that affect tax burden. For example, many countries have tax-free allowances. In Spain, the personal allowance for an individual under age 65 is €5,550; this figure may be more generous even in countries whose top personal income tax rate is higher. Austria, for instance, does not apply tax to personal income that is less than €11,000.

Also, the way incomes are separated into tax brackets varies widely throughout the EU. While Spain has five tax brackets with their respective rates, Ireland only has two. This, naturally, affects the threshold for being taxed at the highest rate. Another important factor to look at is the personal income tax rates for the lower tax brackets. Germany’s top rate is higher than Spain’s top rate, but their tax rate starts at just 14%, compared to 19% for Spain.