Income Tax Return (IRPF) - FAQ

In principle, all Spanish tax residents who earned income during 2025 are required to file a Spanish income tax return, subject to certain exceptions explained below.

An individual is generally considered a Spanish tax resident if they spent more than 183 days in Spain during the calendar year or if Spain was the centre of their main economic interests.

The Spanish annual income tax return includes virtually all worldwide income, except inheritances and gifts, which are subject to separate taxation.

The most common categories of taxable income are:

1. Employment income
   • Salaries
   • Wages
   • Pensions
   • Benefits in kind
2. Real estate income
   • Rental income from properties
3. Investment and savings income
   • Bank interest
   • Dividends
   • Other financial returns
4. Business or self-employment income
   • Freelance income
   • Professional activities
   • Business profits
5. Imputed income from property ownership
   • A notional taxable income attributed to owners of certain properties that are not rented out
6. Capital gains
   • Profits from the sale of property
   • Shares
   • Investment funds
   • Other assets

Depending on the nature of the income and the holding period involved, income may be taxed either under the general tax scale or the savings tax scale.

Individuals may not be required to file a tax return in cases such as:

• Total employment income below €22,000 from a single payer.
• Income from two or more payers not exceeding €15,876 under certain conditions.
• Savings income, such as interest or dividends, below €1,600.
• No taxable capital gains or real estate transactions during the year.

In practice, many employees whose only income comes from a Spanish employer are already paying tax through payroll withholdings.

However, even when filing is not mandatory, it is often advisable to review the tax position because:

• The withholding percentage applied by the employer may have been calculated using incomplete assumptions.
• This can result in an overpayment of tax.
• Filing a return may therefore generate a tax refund that would otherwise be lost if no return is submitted.

Spanish tax residents must declare their worldwide income, regardless of where the income was generated.

When income has already been taxed abroad, Spain generally applies the relevant double taxation treaty and/or a foreign tax credit mechanism to avoid double taxation.

For most countries, Spain allows a deduction for taxes effectively paid abroad, subject to certain limits.

The foreign tax credit mechanism is designed to prevent the same income from being taxed twice. However, this does not mean that Spain automatically adopts the exemptions, tax rates, or tax benefits available in the foreign country.

In practice:

• The tax is always calculated according to Spanish tax rules.
• Spain then allows a deduction for the foreign tax effectively paid, within certain limits.

As a result:

• An income or gain may be exempt abroad but still taxable in Spain. For example, the sale of a main residence may qualify for an exemption in the country of origin but remain taxable in Spain.
• The Spanish tax rate may also be higher than the foreign one. If less tax was paid abroad than what would have been due in Spain, the difference must generally be paid in Spain.

In summary, double tax relief avoids double taxation, but it does not automatically transfer foreign exemptions or tax advantages into the Spanish tax system.

You are considered a Spanish tax resident for a particular calendar year if you spent more than 183 days in Spain during that year.

If this threshold is met, Spain will generally treat you as tax resident for the entire year, meaning worldwide income may become reportable in Spain for that tax year.

Additional factors may also be relevant, such as:

• The location of your main economic interests.
• The residence of your spouse and dependent children.

The Spanish income tax system (IRPF) is complex and varies depending on:

• The type of income received.
• The taxpayer's Autonomous Community of residence.

General Tax Scale

Typically applies to:

• Salaries and employment income
• Pensions
• Self-employment income
• Rental income
• Imputed property income
• Certain capital gains

Savings Tax Scale

Typically applies to:

• Dividends
• Bank interest
• Capital gains from shares and investments
• Financial investment income

The tax system also has two components:

• A state-level tax
• A regional tax set by each Autonomous Community

As a result, effective tax rates and deductions may vary depending on the taxpayer's region of residence.

Approximate Consolidated General Tax Scale

• Up to €12,450 - 19%
• €12,450 to €20,200 - 24%
• €20,200 to €35,200 - 30%
• €35,200 to €60,000 - 37%
• €60,000 to €300,000 - 45%
• Above €300,000 - 47%

Approximate Savings Tax Scale

• Up to €6,000 - 19%
• €6,000 to €50,000 - 21%
• €50,000 to €200,000 - 23%
• €200,000 to €300,000 - 27%
• Above €300,000 - 28%

Important notes:

• The system is progressive, meaning not all income is taxed at the highest rate.
• Personal allowances, deductions, and reductions may significantly reduce the final tax liability.
• The above rates are simplified and for guidance purposes only.

Additionally, Spain allows married couples in certain situations to file either:

• Individually, or
• Jointly as a family unit

Once all information from both spouses is reviewed, the most beneficial filing option can be chosen.

Spanish income tax returns are filed electronically.

Before filing, it is essential to be properly identified with the Spanish Tax Agency. This can generally be done through one of the following methods:

Using Your ID and Your 2024 Tax Return

If you filed a Spanish tax return for 2024, we will require:

• A copy of your 2024 tax return
• A copy of your Spanish ID document, such as DNI, TIE, or passport

If you are married, we will normally also require the same documents from your spouse.

Using Your ID and the Last 5 Digits of a Spanish Bank Account

If you did not file a 2024 tax return, you may instead provide:

• A copy of your Spanish ID document
• The last 5 digits of a Spanish bank account where you are listed as an account holder

Please note:

• The account should not be newly opened.
• It must already be linked to your tax profile with the Spanish Tax Agency.

Using a Digital Certificate

This is the most complete and efficient option, as it allows direct online access to your tax records.

If you do not yet have a digital certificate, we can assist you with obtaining one.

Preparing an accurate Spanish tax return requires gathering information that allows us to:

• Calculate the taxable base correctly.
• Apply available deductions and reductions.
• Confirm the taxpayer's personal and tax situation.

Much of the required information comes from certificates or summaries issued by employers, banks, brokers, pension providers, or other payers.

When income is earned in Spain and subject to withholding tax, part of this information is often already available to the Spanish Tax Agency.

However, tax data is not always complete. Missing information commonly includes:

• Deductible expenses
• Foreign income
• Family circumstances
• Tax deductions or regional benefits

Income Earned During the Year

• Salaries, pensions, or benefits
• Self-employment or business income
• Rental income
• Dividends, interest, and investments
• Capital gains from property or investments
• Foreign income

Deductible Expenses

• Business expenses
• Rental property expenses
• Banking or investment fees
• Professional contributions and deductible costs

Family Situation

• Marital status
• Spouse details
• Children or dependants
• Disability or relevant personal circumstances

Tax Residence Information

• Country of residence during the year
• Time spent in Spain
• Foreign income, assets, or economic ties abroad

Circumstances Giving Rise to Deductions or Tax Benefits

• Main residence
• Rental housing
• Donations
• Pension contributions
• Maternity, large family, or disability deductions
• Regional deductions applicable in the taxpayer's Autonomous Community

To collect this information efficiently and optimise the tax return correctly, we ask our clients to complete our onboarding questionnaire.

This allows us to identify:

• Income that must be declared
• Potential deductible expenses
• Tax deductions and benefits that may apply to each case