Income tax Spain – IPRF (Impuesto sobre la renta de las personas físicas).
Income tax – a major component of Spanish tax revenues.
| 2020 | 2021 | |
| IPRF | 87972 | 94546 |
| I Sociedades | 15858 | 26628 |
| IVA | 63337 | 72493 |
| Others | 26884 | 29715 |
| Total | 194051 | 223382 |
Direct and personal tax. It is applied according to Constitutional principles of 1) equality, 2) generality and 3) progressivity (art.31.1. If the Spanish Constitution).
“Everyone shall contribute to sustain public expenditure in proportion to his or her financial means, through a just and progressive system of taxation based on principles of equality, which shall in no case be confiscatory in nature. “
Art. 31.1.of the Constitution of Spain
Taxes the income according to the nature of its sources – different components taxed in different ways.
Details regulation of Income tax are covered by:
- Ley 35-2006 dd. 28.11.2006 Impiuesto sobre la renta de las Personas Fisicas (LIPRF);
- Real Decreto 439/2007, 30.03.2007, Reglamento (RIPRF)
International tax treaties are also considered to be part of Spanish legislation.
Income is divided into two broad categories – general income (renta general) and savings income (renta del ahorro).
It taxes the following types of income:
1) income from work 2) income from capital (movable or immovable) 3) income from economic activities 4) capital gains and losses (ganancias y perdidas patrimoniales), 5) income imputations in cases, established by law.
Taxpayers:
- General case: physical persons, tax residents of Spain (for new residents – special regime optativo)
- Special cases:
2.1. Physical persons, non-residents with Spanish nationality (diplomats and officials posted abroad)
2.2. Physical persons, non-residents, who moved their residency to tax havens.
When person acquires Spanish tax residence?
Basic condition: If it stays for more than 183 days in Spain.
But person can be considered spanish tax resident even if he stays less than 183 days in Spain in the following cases:
1) If Spain is the centre of his economic interests (vinculacion economica) or
2) If Spain is the place where lives his partner, not-legally separated, or his dependent children (vinculacion familiar).
Taxable period: one calendar year. In the case of the taxpayer’s death – period ends at the death date.
Tax declaration can be submitted individually by the taxpayer or as a family unit.
Family unit consists of 1) conyuges not legally separates, 2) their children under the legal age, not emancipated, 3) their children above the legal age if they are officially incapacitated.
Family status for the tax purposes is determined at the final day of the period – 31 of December.
Condition: no one can be part of more than one family unit.
