Spanish regulations foresee two main taxation regimes depending mainly on tax residence.
On the one hand, ordinary residents are subject to Spanish income tax on worldwide income and assets, regardless of where it was generated.
On the other hand, non-tax residents in Spain, are subject to tax in Spain on income and assets from Spanish sources only.
Further to the regimes previously commented, Spanish regulations foresee a Special Tax Regime (so-called Beckham Law) for individuals who come to Spain to work and become Spanish tax residents. In order to apply for this Special Tax Regime, the following requirements have to be met:
- The individual has not been a tax resident in Spain for 10 years prior to his arrival to Spanish territory.
- The arrival to Spain has to be a consequence of an employment contract/ assignment or the acquisition of the condition of administrator of a Spanish entity.
Hence, if the mentioned requirements are met, there exists the option to apply for this Special Tax Regime. The granting of the Special tax regime will entail the possibility of paying tax mainly according to the rules for non-residents (except for employment income where worldwide employment income would be subject to tax, however, at beneficial rates). This regime applies for six years (the year when the residence is acquired and the following five years).
For ordinary Spanish tax residents, the tax applicable would be the General tax rates plus the Autonomous Region rates where the individual resides.
The final marginal rate shall be the aggregate of General and Autonomous region rates that may vary between 43,5% and 52%.
Please find below the employment income tax rates for 2019:
|Net taxable income (up to) - EUR
Gross tax payable - EUR
Rest of net taxable income- EUR
Tax rates (*)
*Tax rates shown are made up of the sum of the state and standard regional tax rates, there may, therefore, be variations as a consequence of the regional rates approved by each Autonomous region (these rates are also used for withholding tax purposes).
Employment income derived by non-tax residents is generally subject to a flat tax of 24% (or 19% for residents of other EU member states and EEA countries).
Finally, employment income tax rates for the Spanish tax residents under the Special Tax Regime are as follows:
|Taxable income- EUR
|Up to 600.000,00
Please note that for capital gains and investment income there are different rates as explained in the following sections.