Personal income tax and other Spanish taxes are progressive taxes. That means the tax burden goes up as our income goes up. To find out how much each citizen has to pay, there are so-called income tax brackets. Have you heard of them?
The Spain tax brackets indicate what we must pay to the Spanish public treasury. They are expressed by different percentages, which will be progressively higher the larger our income.
Spain Tax Brackets For Corporation Tax
The general rate (effective from January 1, 2016) is 25%. Likewise, there are two reduced rates: 15% for entrepreneurs (only applies during the first 2 fiscal years with a positive tax base) and 20% for cooperatives.
VAT On Property
The VAT on property is an indirect tax levied on the acquisition of products or services. The more basic the need we satisfy with them, the lower the Spain tax brackets.
General VAT (21%)
Applies by default to all products or services (e.g: appliances, clothing, plumbing, etc.).
Reduced VAT (10%)
Applies to a long list of goods and services considered basic (e.g: glasses, passenger transport, medical devices, etc.). It also applies to the purchase of newly built houses.
Super-reduced VAT (4%)
Applies to products and services considered essential (e.g. fruit, prostheses, medicines, etc.), as well as books, newspapers and magazines.
Property Transfer Tax
The tax is what the buyer of a product has to pay. These Spain tax brackets are fixed not only according to the goods acquired but also the Autonomous Community where the sale is made.
Real Estate (Second Hand): Usually ranges from 6-10%.
.
Movable property: from 4%.
Cars and motorcycles: varies between 4 and 8%.
Inheritance Tax And Donations
In Inheritance Tax, you pay more the more you inherit. The general tax ranges from 7.65% to 34%, without prejudice to the subsequent application of the discounts provided for by each Autonomous Community.
Estate Tax: one of the most complex tax brackets in Spain
As in the previous case, the Spain tax brackets will depend on the Autonomous Community where the subject obliged to pay it resides. Only in the event that the Autonomous Community does not regulate it, the tax tables set by the State in general will be applied.
Currently, seven state brackets are established to which tax rates between 0.2% (for bases of €167,1129.45) and 2.5% (for bases exceeding €10.7 million) are applied.
What Are The Different Income Tax Brackets In Spain?
The income tax brackets are structured in 6 levels of income. The total percentage will be determined by the sum of the state rate and the regional rate. The latter will be replaced by a rate identical to the state rate if you do not reside in Spain.
Thus, the Spanish income tax bands that would be applied in the 2021 campaign (to be presented in 2022) would be the following, adding the state and regional percentages:
- 1st section up to €12,450: 19% is paid (9.5% state and 9.5% regional).
- 2nd tranche up to €20,200: 24% is paid (12.0% state and regional).
- 3rd section up to €35,200: 30% is paid (15.0% state and 15.0% regional).
- 4th section up to €60,000: 37% is paid (18.5% state and 18.5% regional).
- 5th section up to €300,000: 45% is paid (22.5% state and 22.5% regional).
- 6th section from €300,000: 47% is paid (24.50% state and 22.5% regional).
Taking into account the various income tax brackets that apply in Spain is essential to correctly comply with our tax obligations. However, if you have any questions about it or want to optimize the payment of taxes as much as possible, do not hesitate to consult a lawyer specialized in tax law.
