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Spain has a multi-level taxation system that includes state, regional and municipal taxes. Let us consider the main taxes in force in the country at the end of 2024 – beginning of 2025.

Let’s start with taxes for individuals:

Income tax (IRPF ) – a progressive scale of rates is applied, consisting of federal and regional parts. The federal (central) part of the rates includes:

• 9.5% – on income up to €12,450;
• 12% – on income from €12,451 to €20,200;
• 15% – on income from €20,201 to €35,200;
• 18.5% – on income from €35,201 to €60,000;
• 22.5% – on income from €60,001 to €300,000;
• 24.5% – on income over €300,000.

Regional authorities set additional rates, which may vary depending on the autonomous community.

Thecapital gains tax is variable, and gains from the sale of real estate and other assets are taxed at the following rates:

• 19% – on gains up to €6,000;
• 21% – on gains from €6,001 to €50,000;
• 23% – on profits from €50,001 to €200,000;
• 27% – on profits from €200,001 to €300,000;
• 28% – on income over €300,000.

Real estate tax (IBI): An annual tax whose rate varies from 0.4% to 1.1% of the cadastral value of the property, depending on the municipality.

Wealth tax: Applies to individuals with net assets above a certain threshold, with progressive rates ranging from 0.2% to 3.5%, depending on the region.

Taxes for legal entities:

Corporate income tax (Impuesto sobre Sociedades): The standard rate is 25%. For small businesses with a turnover of less than €1 million, there is a reduced rate of 23%. New companies can apply the 15% rate for the first two years of profitable activity.

Value added tax (IVA):

• The standard rate is 21%;
• Reduced rate – 10% (applies to certain goods and services, such as food and transportation);
• Super reduced rate – 4% (applies to basic foodstuffs, books and medicines).

Other taxes and duties:

Inheritance and gift tax: Progressive rates from 7.65% to 34% apply, but rates and exemptions may vary significantly from community to community.

Property Transfer Tax (ITP): Charged on the purchase of second-hand real estate, the rate is usually around 6-10% of the value of the property, depending on the region.

Social contributions: Employers and employees are required to make social security contributions. The general rate for the employer is about 29.9% of the employee’s salary, and for the employee – about 6.35%.

The Spanish tax system is characterized by progressive and diverse taxes, which requires careful planning when doing business or living in the country. It is recommended to consult with professional tax advisors to ensure compliance with current legal requirements and optimize the tax burden.

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