TAX IN SPAIN. RESIDENT TAXES. FAQS

Yes, if you stay for over 183 days in Spain or if the main core or base of your business or financial interests is situated in Spain, directly or indirectly or if the spouse (unless legally separated) and children under the age of legal majority who are dependent on that physical person normally reside in Spain. In this third case there is room for providing proof to the contrary.

This tax is payable between 01 May and 30 June each year, and relates to the previous year's income. For example, in June 2011 we file the return relating to our 2010 income.

Non-resident status may be confirmed by providing a certificate of residency in another State issued by the tax authorities of that State. The validity period of such certificates is one year.

1. Rule

• Those whose earnings come from Earnings (wages, salaries, pensions etc)
  • No more than 22.000,00€ gross per year, when the earnings come from a single payer. This threshold also applies if there are several payers and the sum of the amounts earned by the second and further ones does not exceed overall €1,500 gross per year.
  • No more than 11.200,00€ gross per year, if the earnings come from more than one payer and the sums earned by the second and further ones, in order of amount, exceed €1,500 gross per year.
  • Payer not liable to retain.
  • Earnings with fix rates for retention.
     
• Those whose earnings come from Yields from liquid assets (share dividends, interest on accounts) and capital gains
  • No more than 1.600,00€ when there is a retention or payments in advanced.
  • Those whose earnings come from yields from property (letting of properties), public bonds or grants for public housing.
  • No more than 1.000,00€.

2. Rule

• Those whose earnings come from earnings, yields from liquid assets, yields from properties, yields from financial activities (businesspersons, professionals) and capital gains.
  • No more than 1.000,00€ when there is a retention or payments in advanced or not.
     
• Those who have financials looses
  • No more than 500,00€.
    

Deduction for investment in usual home. Deduction for business savings account. Deduction for international double taxation. Reductions in the gross tax base for contributions to pension plans, to social welfare mutual benefit societies, to insured benefit plans or to protected trusts of disabled.

For the year 2010

Personal allowance: 5.151 euros a year. There is an increment of 918€ for persons over 65 and 2.040,00€ for persons over 75.

Family allowances: for each descendant under 25 years of age, or of any age if disabled, provided he or she doesn't have income over 8.000,00€.

The application of the allowances for descendants and ancestors is improved because it is permissible to apply these allowances even though these family members may file a return, provided that they don't have income over 1.800,00€.

Extension of property, when there is an increase in the habitable area, through closing part discovered or by any other means, on a permanent basis and during all times all the years.

Construction, when the contributor satisfies directly the expenses of the execution of the works, or provides the builder quantities in advance, if completed within a period not exceeding four years from the start of the investment.

From 01-01-07 the deduction for double taxation of dividends is removed, and dividends earned which don't exceed €1,500 are tax free. Above that amount the 19% rate will be payable.

If you rent your property, the general percentage you can reduce for the income received for letting the property is 60%. In case the tenants are between 18 and 30 years old the reduction will be 100%. In case the contract was arranged before the 1st of January 2011 the age grows up until 35.

Dependency insurance policies: these work like a life assurance policy, covering exclusively "great dependency": help with performing the basic activities of daily life; loss of mental or physical independence; or permanent attendance by another person.

There are just two of these limits; General limit 10.000,00€ and limit for persons over 50 years of age: 12.500,00€ or the amount of reduction can not exceed 30% of the sum of net income from employment and economic activities received individually in the exercise. This percentage will be 50% for taxpayers over 50 years.