What is IRPF and Who Does It Affect?
Becoming a tax resident in Spain brings a fundamental change to your tax obligations. The main tax that will affect you is the Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas - IRPF). As a tax resident, you must pay taxes in Spain on your worldwide income, meaning all income you earn anywhere in the world, without prejudice to the provisions of double taxation agreements.
Who is Considered a Tax Resident in Spain?
According to Spanish law, you are considered a tax resident if you meet any of the following conditions:
Stay of +183 days
If you spend more than 183 days in Spanish territory during a calendar year. Sporadic absences are counted.
Economic Interests
If the main core or base of your economic activities or professional interests is located in Spain.
Family Ties
If your non-legally separated spouse and/or your minor children habitually reside in Spain.
Understanding the IRPF Tax Base
IRPF is a progressive tax: the percentage you pay increases as your income grows. Your income is divided into two main groups:
1. General Tax Base
This includes most common types of income: employment income (salaries, pensions), income from economic activities (freelance), and rental income.
2. Savings Tax Base
This groups income derived from your investments: dividends, interest from bank accounts, and capital gains from the sale of assets (real estate, stocks, etc.).
IRPF Brackets (State Scale 2024-2025)
The final rate is a combination of the state and regional scales. The state scale is shown here:
General Tax Base Brackets
| General Taxable Income (up to) | Applicable Rate |
|---|---|
| €12,450 | 9.5% |
| €20,200 | 12% |
| €35,200 | 15% |
| €60,000 | 18.5% |
| €300,000 | 22.5% |
| Over €300,000 | 24.5% |
Savings Tax Base Brackets
| Savings Taxable Income (up to) | Applicable Rate |
|---|---|
| €6,000 | 19% |
| €50,000 | 21% |
| €200,000 | 23% |
| €300,000 | 27% |
| Over €300,000 | 28% |
Main Deductions and Reductions
You can reduce your tax bill by applying various deductions. The most common are:
- Personal and family minimums: Amounts that are not taxed to cover the basic needs of the taxpayer and their family.
- For renting a primary residence: Mainly at the regional level.
- Contributions to pension plans: With a general limit of €1,500 per year.
- Donations to NGOs and other non-profit entities.
- For maternity and large families.
Who is Obliged to File a Tax Return?
Not all residents are required to file. Generally, you must file a return (Form 100) if your employment income exceeds €22,000 per year from a single payer, or €15,000 if you have more than one payer (with certain conditions).
Important: Even if you are not obliged, it may be beneficial to file a return if you are due a refund (e.g., due to withholdings).
How and When to File the IRPF Return?
The annual IRPF return is filed using **Form 100 (Modelo 100)**. The tax campaign usually runs from April to June each year, to declare the income earned in the previous calendar year.