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LIFE IN SPAIN

‘La renta’: What you need to know about filing your Spanish tax return

The deadline for Spain's 2021/2022 annual income tax return - 'la declaración de la renta' - is on June 30th. Here's a roundup of everything you need to know about the process, from who has to file it to what taxes and deductions are applied.

'La renta': What you need to know about filing your Spanish tax return
Photo: StocketeDepositphotos

What’s the name for the annual income tax return in Spain?

Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas). Commonly shortened to la renta.

The annual income tax return is called la declaración de la renta.

This is a progressive tax: in other words, the more you earn, the more you pay.

Spanish income tax returns have to be filed by June 30th for the preceding year, in this case 2021.

Who needs to file a tax return?

The basic rule applied to determine residency when it comes to tax is the 183 days rule: “If you stay in Spain for more than 183 days during the calendar year,” you are usually considered a tax resident here state Spain’s Tax Agency (Agencia Tributaria)

You probably don’t need to hand in a tax return if you earn less than €22,000 a year and you pay tax on your salary and your bank interest throughout the year.

But if you fall into any of the below categories then you should.

  • You are employed and have an annual income over €22,000 (as long as the total obtained from any further sources doesn’t exceed €1,500)
  • You are self-employed or have your own business
  • Your income from yearly dividends, interest and capital gains exceeds €1,600
  • You receive rental income over €1,000 per year
  • It is the first year that you are filing a tax return in Spain

READ ALSO: Who needs to file an income tax return in Spain in 2021-2022?

The simple answer is yes. If you are classed as a tax resident in Spain (that’s the 183-day rule again) you will be subject to Spanish tax on your worldwide income, and that includes income from rental properties overseas.

Do you have to pay tax on income earned outside Spain?

For people who split their time between two countries, authorities in both countries may examine their financial affairs to decide whether they are liable to pay tax in that country. Some countries have double taxation rules:

If you are not sure, consult a tax advisor, accountant, or financial planner.

READ MORE: Do I really need to declare foreign assets to Spanish taxman by March 31st? 

If you don’t live in Spain for tax purposes, but own a house here, you may need to fill in what is known as a Form 210 (Modelo 210).

How to register as a taxpayer

You must register with the Agencia Tributaria, the Spanish tax authority, in order to pay tax in Spain regardless of whether you are a resident or non-resident.

To do this you will need your NIE, and fill out a Modelo 30 in order to register for the first time. You can also use this form if you need to change any personal details such as a change of address.

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

When is the Spanish tax year?

This is one thing that Spain makes simple. The tax year is the same as the calendar year which means it runs from 1st January to 31st December.

The Spanish tax year goes from January to December. Photo: Andreas Lischka / Pixabay

When do you file your annual tax return?

The filing of tax return for 2021-2022 must be done between April 6th and June 30th – although before June 27th if you want to pay by direct debit. 

How much tax will you have to pay?

In Spain, as in other countries, the percentage of tax you will have to pay is dependent on your level of income above a personal threshold of €5,550 (this means you don’t pay tax on the first €5,550 you earn annually).

These are the tax brackets for 2021:

€0 – €12,450 – 19%
€12,450 – €20,200 – 24%
€20,200 – €35,200 – 30%
€35,200 – €60,000 – 37%
€60,000 – €300,000 – 45%
above €300,000 – 47%

However, you must check the rates for your region because they can vary from the general income tax rates. 

What allowances/deductions are there?

  • Individual and Pensioner Allowances

As mentioned above, you are entitled to an Individual allowance of €5,550 tax free. That increases to €6,700 for those aged 65 and over and to €8,100 for over 75-year-olds.

  • Capital Gains Tax Rates for 2021/22

€0 – €6,000 – 19%
€6,000 – €50,000 – 21%
€50,000- €200,000 – 23%
Greater than €200,000 – 26%

  • Disability Allowance

Grade 33%-65% disability – €3000
Grade 65%-100% disability – €9,000
An additional allowance of €3,000 if third-party care is needed

  • Child Allowance

In Spain, child allowance can be claimed for children up to the age of 25 who live with you and earn less than €8,000.

First child – €2,400
Second child – €2,700
Third child – €4,000
Fourth & additional children – €4,500
Additional for child under 3 – €2,800

  • Parental Allowance

Deductions are also given to those who have elderly parents living with them – either a mother or father with an income less than €8,000.

Over 65’s – €1,150
Over 75’s – €2,550

Parental allowance on Spanish tax return. Photo: Sabine van Erp / Pixabay

Other deductions and tax allowances 

You may also be able to claim deductions for the following based on your individual circumstance. 

  • Social security contributions 
  • Pension contributions
  • Subscriptions to unions and professional societies of up to €500
  • Legal defense fees up to €300
  • Allowable work expenses of up to €2,000
  • Some costs of renovating your main home 
  • Charitable donations

Tax On Property Rentals

Tax on rental income for properties in Spain is charged at a flat rate of 19% up to €12,450 for those who reside in the EU, Norway and Iceland and 24% for those residing in all other countries.

Note that for EU residents, rental expenditures such as mortgage interest payments, I.B.I, utility bills and community fees are tax-deductible.

Company Tax

For smaller companies (between 1 and 24 employees and turnover of less than €5 million) the rates for 2021 are 25%.

Newly formed companies enjoy a reduced rate of company tax of just 10% for the first two years of business.

Couple allowances

If you are married, either in a heterosexual or same-sex marriage, you have the choice of being taxed separately or together.

The married couple’s allowance (declaración conjunta) of €3,400 for the second taxpayer, in addition to the general threshold of €5,550 granted to the first taxpayer.

But work out the rate as individuals and together before making the decision as doesn’t always pay off to declare together.

It’s easy if you are employed and taxed at the source

The system is pretty straightforward if you are a salaried worker and your tax and social security contributions are taken at the source. You should be given a certificate of taxes withheld Certificado de Retenciones which calculates your annual contributions to add to the tax return.

How To Submit Your Spanish Tax Return

The website lists four ways of filing your tax return:

  • Online
  • Using the App
  • By telephone
  • In person at the tax office

The Agencia Tributaria has streamlined the process in recent years so it should be pretty straightforward, but the online system can get pretty clogged up right at the beginning of the filing period and again as the deadline approaches.

You can either process the application online or using the dedicated App designed for Android or iOS operating systems. 

The Tax Office has prepared a YouTube tutorial to help guide you through the process.

Rather than download any sort of app you can use Renta Web – which is accessible through the website and doesn’t require any additional software.

Whichever system you choose, you will need to register with the [email protected] PIN security system to allow you to access your personal data securely online. Get one either via the Agencia Tributaria page here or by booking a cita previa (appointment) at one of the many regional Tax Agency offices.

READ ALSO: Spanish bureaucracy explained: Saving time through the online [email protected] system

If you don’t want to do it online/App then there is the option of speaking to an adviser at the Tax Office who will talk you through the process.

You can do this by calling 901 200 345 or 91 535 68 13. Lines are operational Monday to Friday 9am to 7pm.

Or book a Cita Previa (private appointment) at the tax office and go down there in person. Although this service is only available between June 1st and June 30th. You can book your appointment online at the Agencia Tributaria website, by choosing which office you want to book it through or by calling 901 22 33 44 or 91 553 00 71.

What happens next? 

If you are due any overpayment of tax, it will usually be credited directly to your bank account within one month of submitting your return.

Essential Information: 

Spain’s Tax Agency website HERE

READ ASLO: Self-employed in Spain: Seven ways to save money on your income tax return

Please note, we are at The Local are not financial experts. What we’ve learned, we’ve learned the hard way — by getting on the phone and listening to all those frustrating automated messages. 

The information above is designed to help, but if you are unsure of what steps to get yourself in order tax-wise, seek professional advice.

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LIFE IN SPAIN

What to do about insects and other pests in your home in Spain?

Bugs and insects can sometimes be a problem in Spanish homes, particularly during the summer months. Here's what to do if you get an infestation and how to prevent them from happening.

What to do about insects and other pests in your home in Spain?

Fruit flies buzzing around the bins, cockroaches in the kitchen and ants invading your food cupboards can be a common sight in your Spanish home, more often than not in summer.

But what can you do when insects invade your home? 

What types of pests are common in Spain?

Bugs and insects that commonly invade homes in Spain include fruit flies, ants, stink bugs, cockroaches, pantry moths, plaster bagworms and mosquitoes.

Those who have pets may also have a problem with your animals bringing fleas and ticks into the home too.

READ ALSO: Ticks are proliferating in Spain: How to avoid them and protect yourself

These can cause a nuisance, not only flying around your home and biting you (in the case of mosquitoes, fleas and ticks), but they can get into your food and lay eggs in your cupboards.

How can I get rid of bugs in my home?

One of the most important ways you can keep insects and other bugs out of your home is to eliminate food sources.

This means always doing the washing up as soon as you’ve finished eating so there are no scraps laying around, sweeping kitchens and dining rooms regularly and putting opened food items in the fridge instead of the cupboards.

You also need to make sure you regularly empty your rubbish bin and that there are no gaps between the lid and the bin that flies can get in through.

Dusting, hoovering and general regular cleaning will also keep other insects at bay such as plaster bagworms and moths that lay larvae on your walls and ceiling.

Those with pets should make sure that animals are treated with flea and tick protection and combed through with special flea combs to make sure bugs are not stuck in their fur.

Summer can of course be very hot in Spain, with temperatures regularly in the high 30°Cs or even low 40°Cs in some parts of Andalusia and other regions, meaning that windows and doors are often left open to ensure a breeze. Unfortunately, this means that your home is more accessible to insects too.

If you can, get a fly screen for your doors and windows, so you can leave them open, but no bugs can get in. These fine mesh screens can be bought from hardware or home stores such as Leroy Merlin and can simply be lifted into place when you need them.

If you can’t get screens installed, then consider planting certain plants on windowsills or balconies. Lavender, basil, lemongrass and mint are all natural insect repellents.

Electric fly swats, ant traps and sticky paper can also all help eliminate pests in your home. 

READ ALSO: What venomous species are there in Spain?

Insecticides

When the situation becomes worse, simple everyday cleaning won’t suffice and you may need to use insecticides to kill the infestation. There are many different brands in Spain. Both Protect Home and Compo have several different products you can use.

If you don’t want to use chemical insecticides, natural ones made from white vinegar, citrus plants, or peppermint oil can also work.

Pest control

If the situation becomes completely out of control and you find that insects are not only entering your home but that they are breeding there too, it’s time to call in the professionals. Pest control services are available across Spain.

The first step is to check your home insurance to see if they will cover this service. If they won’t, they may be able to suggest a company that can help.

Otherwise, a quick Google search for ‘Control de plagas’ (pest control) and then your area should provide you with plenty of options.

According to the home website Habitissimo, pest control services in Spain can range from €80 up to €2,000 depending on the type of infestation you have, how serious the problem is and how big your property is. On average it will cost you around €267.

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