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Taxes For Members

EXPLAINED: The tax deductions you get in Spain for having a child

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EXPLAINED: The tax deductions you get in Spain for having a child
You can apply for certain Spanish tax deductions even if you are a legally separated or non-married parent with two children if you meet certain criteria. Photo: Nathan Dumlao/Unplash

Parents in Spain can get tax deductions from the moment their baby is born, and in many cases can continue enjoying fiscal perks as their offspring grows up, with the number of children, regional reductions and other conditions also playing a part.

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Having a baby in Spain means that you'll see some changes to your annual tax bill, a silver lining considering the added cost that raising a child entails. 

Much of this is centred on the personal and family minimum. According to the Agencia Tributaria (the Spanish tax agency) website: "The personal and family minimum is the part of your income on which you are not taxed as it is used to meet basic personal and family needs. It is obtained by adding the minimum for taxpayers, parents, children, and for disability."

It is currently set at €5,550 per year. Each dependent child you have will increase this minimum, which means that you will pay less tax. The scale outlined in Spanish tax law is as follows:

First child: €2,400 per year
Second child: €2,700 per year
Third child: €4,000 per year
Fourth and subsequent children: €4,500 per year

According to Tributaria calculations, a taxpayer who earns an average annual salary of €23,156 would see their withholding rate reduced from 13.09 percent (with no child), to 10.96 percent (a child under three years of age), or 9.85 percent, (one or two children respectively and one of them is younger than three).

There are also some other more specific deductions you can claim if you have a child in Spain.

READ ALSO: The real reasons why Spaniards don't want to have children

Maternity deduction 

The maternity deduction is €1,200 per year (€100 per month from the day of birth). All women who have children under 3 years of age and who are self-employed or employed, and are registered in with the Social Security regime, will be eligible for this deduction.

You can request this amount in advance, but if you decide to do it this way, you will not be able to deduct it from your personal income tax return.

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Disability and large family deduction

There are also deductions available for people with large families and disabled children.

These deductions were included as part of tax reforms made back in 2015, and are intended as a financial aid for large families or those caring for disabled people. It is worth the same as the maternity deduction (€1,200 per year).

The full list of people that will benefit from this deductions are: large families (usually three or more children), single-parent families with two or more dependent children, dependent children who have a disability, or dependent parents with disabilities.

Deduction for parents with two children (separated or not married)

You can apply this deduction if you are a legally separated or non-married parent with two children provided that:

  • you are entitled to the full amount of the minimum amount per child
  • and, in addition to the above, you meet one or more of the following requirements:
  • you are self-employed or employed for which you are registered with Social Security
  • you receive benefits from the unemployment system
  • you receive pension payments paid by Social Security or a pension fund
  • you are a professional who is not in RETA and you receive benefits similar to those listed above

READ ALSO: How much does it cost to raise a child in Spain?

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Up to what age can children be included in tax deductions?

It depends. Children up to 18 years of age who live with the taxpayer or who depend on them financially can be included for tax deduction purposes.

As can children under 25 years of age who live with the taxpayer or depend on them financially and who, in addition, don't have an income greater than €8,000 and have not submitted an income tax return of their own.

Similarly, deductions are available for children over 25 years of age who live with the taxpayer and have a disability.

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Birth, fostering and adoption deductions

There are also tax deductions available for having a child, as well as for foster parents and adoption.

These are mostly done on a regional level so the exact amount varies, but almost all regions include some sort of deduction for foster families and adoptive parents, as well as tax credits for giving birth.

In Andalusia, for example, there's a €200 deduction available for foster parents in the region, whereas in Asturias it is €500.

The Canary Islands has a deduction of €300 for foster care, whereas in Madrid deductions of €600, €750 and €900 are established for the first, second and third foster child, provided that they live with the taxpayer for at least 183 days of the year year.

In Aragón, there are tax credits of €200 per birth or adoption.

READ ALSO: Single parents in Spain: What benefits and aid are you eligible for?

Regional differences

That in mind, there are a multitude of different tax deductions available across the Spanish regions. Remember, in Spain half your income tax is paid to the national government and the other half to the regional authority, so the rules are slightly different depending on where you live. It is always advisable to check your regional government rules.

The Local has included some of the standout regions with deductions and credits for parents below.

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Valencian Community

The Valencia region offers deductions for birth and adoption of €300, the same amount as for each child in a foster family.

There is also a deduction for disabled children of €246, and tax credits of the same amount for multiple births or adoptions from the same tax year.

Canary Islands

There is a €540 deduction for large families and €720 for special category families in the Canary Islands, as well as deductions of €300 for fostering.

The Canary Islands also offers deductions for childcare expenses worth 15 percent of amounts up to a maximum of €480 per year per child, provided that the parent's general tax base and the savings tax base does not exceed €42,900 in a joint tax return or €57,200 for the total family unit.

Andalusia

In addition to the tax credits for adoptive and foster parents, Andalusia offers a €400 deduction per child if you live in a depopulated municipality. To qualify for the rebate, the total of the general and savings tax bases must not exceed €25,000 or €30,000 for a joint declaration.

Catalonia

In Catalonia, each parent can deduct €150 for the birth or adoption of a child during the same tax year, and in the case of a joint declarations, the deduction rises to €300.

Madrid

Low-income families in Madrid with two or more children can deduct 10 percent of the difference between the rest of the deductions available in the region and the regional tax liability when their income is €24,000 or lower.

Madrid also offers deductions for educational expenses and another for childcare for children under three years of age, worth 20 percent of the contributions paid with a deduction limit of €400 per year.

In the case of large families, it is worth 30 percent with a limit of €500.

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