Understand Spanish property taxes, VAT, capital gains tax, car tax, wealth tax and inheritance tax. Find out who has to pay and how to pay…
The tax year as it affects income tax and other taxes runs from 1 January to 31 December in Spain.
The Spanish government has extensive information on taxes on its Agencia Tributaria website. While most of the site is in Spanish, some information relating to non-residents is in English.
As Spain is divided into 17 autonomous communities, taxes, liability and amounts may vary from one Community to another. The following information is designed to give a rough overview of taxes in Spain.
Residents of Spain are obliged to declare any overseas assets, including bank accounts and property. These must be declared using Form (Modelo) 720.
- For more information on asset reporting requirements: Click here (in Spanish)
- To complete Modelo 720: Click here (in Spanish)
Value-added Tax (VAT)
Value-added tax (Impuesto sobre el Valor Añadido – IVA) has three levels in Spain.
From 1 July 2010 the levels are:
- IVA general: Charged on non-essential products and services at 18 percent (21 percent from 1 September 2012)
- IVA reducido: Charged on products and services such as tickets, glasses, hairdressers, funeral services and dentists at 8 percent (10 percent from 1 September 2012)
- IVA superreducido: Charged on essential items such as bread, milk, cheese, eggs, fruit, vegetables and cereals at 4 percent
IVA is not payable in the Canary Islands. However, a reduced local tax called the Canaries General Indirect Tax (Impuesto General Indirecto de Carnarias, IGIC) may be applicable for services and purchases.
- For more information: Click here
As only residents are obliged to pay IVA on goods, IVA rebates for purchases valued at over €90.16 are available for those visiting Spain. Currently, this can be arranged by asking till or checkout assistants for the rebate form upon making a purchase, and presenting the form to customs officials at Spanish airports. However, the implementation of this is likely to change with law BOE-A-2012-15104, which was introduced on 15 December 2012.
- For more information and a breakdown of IVA rebate bands: Click here(in Spanish)
This tax is levied on the increase in wealth associated with a gift from a living donor, taking into account variables such as the Community, the amount and the existing wealth of the beneficiary.
The beneficiary is liable for the tax payment within 30 days of the transfer date.
Spain has one of the highest ratios of bank branches per capita in Europe; however, not all of these will offer an English-language service.
Asset Reporting Requirements 2013
Information for British residents of Spain can be found on the UK Embassy website.