In Spain, the personal income tax is known as IRPF or 'la renta'. The annual income tax return is called 'la declaración de la renta' and is a progressive tax, meaning that the more you earn, the more you pay.
You must file a tax return in Spain if you meet certain conditions, including earning over 22,000 euros from a single employer or over 15,000 euros from multiple employers, being self-employed or having your own business, earning over 1,600 euros from dividends, interest, or capital gains, receiving rental income over 1,000 euros per year, or filing a tax return for the first time in Spain.
The tax year in Spain runs from January 1st to December 31st. For the 2022 tax campaign, you will need to present your taxes for the period from January 1st to December 31st, 2022.
Here are the key dates and deadlines to remember in 2023 for the 2022 tax year.
To securely access your personal data online, you must have a Digital Certificate or register with the email-protected PIN security system. You can obtain either of these options through the Agencia Tributaria website or by scheduling an appointment at one of the various regional Tax Agency offices.
It’s important to note that individuals who submit their income statement after the deadline will face penalties that are determined by the extent of the delay. In 2021, these penalties amounted to 1 percent of the outstanding amount, plus an additional percentage point for every month of delay. If the taxpayer fails to submit their income statement for more than 12 months, they will be charged a surcharge of 15 percent in addition to the late-payment interest.
2023 Tax Changes
Tax changes are coming in 2023, including adjustments to personal income tax (IRPF) calculations that will benefit over 250,000 workers, potentially saving them over 1,000 euros annually. The government has also raised the minimum exemption from 14,000 euros to 15,000 euros to assist the most vulnerable in Spanish society.
Self-employed individuals (autónomos) will now pay social security contributions based on their actual income rather than a fixed monthly amount. Those earning under 1,300 euros per month will pay less in social security fees, while those earning between 1,300 euros and 1,700 euros will continue to pay 294 euros per month, and those earning over 1,700 euros will pay more.
In addition, the wealth tax will be assessed based on three brackets: 1.7 percent for fortunes between 3 and 5.3 million euros, 2.1 percent for wealth between 5.3 and 10.6 million euros, and 3.5 percent for fortunes over 10.6 million euros. Meanwhile, savings tax rates will increase by one percent for taxable income over 200,000 euros, and savings of 300,000 euros or more will be taxed at 28 percent.
In the 2023 general budget, the Spanish Government has raised the minimum exemption for personal income tax declarations from 14,000 to 15,000 euros and also expanded the reduction for work income from 18,000 to 21,000 euros. However, these changes will not be applicable to this year's income statement but will be effective from the following year. As a result, both parameters remain unchanged for the current year.
Several autonomous communities, including Andalucia, Galicia, Madrid, Murcia, and the Valencian Community, have retroactively approved changes to their tax brackets, resulting in modifications to the personal income tax in these regions. For instance, in Madrid, personal income tax has been deflated by 4.1 percent, which would help residents save an average of 46 euros, with high earners benefiting the most.
The deduction amount for private pension plans has been reduced from 2,000 to 1,500 euros, while the reduction for those having a company pension plan has been increased by 500 euros, up to 8,500. This move aims to ensure the long-term sustainability of the pension system.
Lastly, mothers of children under three years of age, who are unemployed and receive contributory or welfare benefits, can now apply for maternity deduction. Previously, the discount was only available if the woman was engaged in a professional activity.
Learn more about filing your income tax in Spain.
September 25, 2023
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