Taxes in Spain in 2025 – Everything you need to know about taxes in one place

The tax system in Spain in 2025

Thinking about moving? Whether you’re planning to work or invest in real estate, learn the latest details about the Spanish tax system. Taxes may sound complicated, but there’s nothing to be afraid of!

Why is Spain’s tax system unique?

The Spanish tax system is a complex but coherent administrative structure. Its key feature is its high degree of decentralization, which sets it apart from other European tax systems. The system consists of three levels: national, regional, and local taxes. Each of the 17 autonomous communities has considerable freedom in shaping their local tax frameworks.

Tax residence — a key aspect of tax settlements

Tax residence is the foundation of tax settlements in Spain. If you stay in the country for more than 183 days a year or have your center of vital and economic interests in Spain, you become a tax resident.

Basics of the tax system and types of taxes in Spain 2025

When does the fiscal year begin?

January 1st marks the beginning of the new tax year in Spain. From this date onwards, companies and individuals are required to file their tax returns in accordance with the applicable regulations.

Income Tax Act

Spanish income tax laws provide comprehensive regulations on the taxation of personal income. This requires a thorough understanding of the regulations and a systematic approach to tax returns.

Classification of taxes according to the nature of taxation

In Spain, there are two main types of taxation:

1. Direct taxes — levied directly on the assets of a natural or legal person:
   • Income tax (IRPF)
   • Corporate income tax
   • Property tax
2. Indirect taxes — levied on the purchase of goods and services:
   • Value added tax (VAT)
   • Excise tax
   • Property transfer tax

Detailed discussion of income tax (IRPF)

Tax rates for individuals in 2025

Income tax in Spain is progressive, which means that the higher your income, the higher the tax rate:

• Up to €12,450: 19%
• From €12,451 to €20,200: 24%
• From €20,201 to €35,200: 30%
• From €35,201 to €60,000: 37%
• From €60,001 to €300,000: 45%
• Above €300,000: 47%

Taxable income

Various types of income are subject to taxation:

• Income from employment (salaries, employment contracts)
• Income from business activities
• Income from foreign investments
• Income from property rental

Tax-free amount

The amount of the tax-free allowance depends on the taxpayer’s age:

• Up to age 65: €5,700
• Between ages 65 and 74: €6,900
• Over age 75: €8,300

Special tax regulations

Employer and tax obligations

Employers in Spain are required to:

• Pay tax advances
• Issue documents confirming income earned
• Comply with insurance regulations

Tax exemptions and reliefs

The system provides for various tax exemptions, including:

• For people below a certain income threshold
• For large families
• For people with disabilities

Prawo Beckhama (Beckham Law)

The Beckham Law is a special regulation encouraging foreign professionals to work in Spain. It allows income to be taxed at a preferential, lower tax rate.

Tax for non-residents (IRNR)

If you stay in Spain for less than 183 days a year, the following rates apply:

• EU citizens: 19%
• Non-EU citizens: 24%

Property tax (IBI – Impuesto sobre Bienes Inmuebles)

Key information for property owners:

• Tax rate: 0.40% – 1.16% of the property value
• Tax relief for properties below EUR 700,000
• Tax on rentals: 19% for EU residents

Real estate in Spain

Acquisition and taxation of real estate

When purchasing apartments or real estate in Spain, the following should be taken into account:

Real estate transaction tax

• Notary fees
• Possible tax reliefs

Tax settlement procedure

Documents required for settlement

For comprehensive tax settlement (PIT), you need:

• Identification number NIE
• Income certificates
• Documents confirming insurance
• Employment contracts or business activity agreements

Deadlines and commitments

• Annual settlement by June 30 of the following year
• Possibility to correct tax returns
• Necessity to pay tax advances

Double taxation agreement

Poland and Spain have a comprehensive agreement that protects against double taxation. You report your income from Spain in your Polish PIT-36 tax return with attachment ZG, and this income is not subject to additional taxation in Poland.

Additional aspects of the agreement:

• Priority of taxation in the country of residence
• Mechanisms for settling cross-border income
• Protection against double taxation

Practical advice

1. Always consult a professional advisor about your tax situation.
2. Keep track of changes in tax regulations.
3. Keep all financial documents.
4. File your taxes on time to avoid penalties.

Why is it important to know the details of the tax system?

Although the tax system may seem complicated, with the right knowledge and preparation, there is nothing to fear! The key is to understand the basic principles and take a systematic approach to tax returns.

Note: This guide is for informational purposes only. We always recommend consulting a professional tax advisor for an individual interpretation of the regulations.