Tax rates in Spain for 2016

Posted on Posted in Publications, Tax, VAT

For the tax year 2016, as usual, the tax rates applicable to individuals (Personal Income Tax) and companies (Corporation Income Tax) have been reduced

Starting by the Corporation Income Tax, the new general tax rate is 25 %. However, for new startups the tax rate is reduced to 12, 5 % for the first two profitable years. There are special tax rates for companies located in the Spanish territories Ceuta and Melilla and in the Canary Islands.

If you are interested in these special tax regimes, read our posts about the tax regime of Ceuta and Melilla and the Special Tax zone of the Canary Islands.

Regarding the Personal Income Tax, the tax brackets remain unchanged, but the tax rates have been slightly reduced. The tariff is shown below, although we have to warn that it may change depending on the residence of the tax payer within the Spanish territory, because the regions have the right to increase or decrease the table within certain limits. However, as a general rule, they do not normally depart very much from the standard table shown below.

 

From To Tax rate
12,450 19 %
12,450 20,200 24 %
20,200 34,000 30 %
34,000 60,000 37 %
60,000 + 45 %

 

Note that this tax rates only apply to the “general taxable base” which is basically composed of earned income, either as an employed individual or as a self-employed (“autonomo”).

Unearned income such as savings and other investment income – interest, dividends, and capital gains – is included in other basket and taxed at other tax rates:

From To Tax rate
6,000 19 %
6,000 50,000 21 %
50,000 + 23 %

Likewise, the special tax regime for employees seconded to Spain has been amended. Among other important issues, the tax rates applicable to such individuals are now 24 % up to 600,000 Euros and 45 % on the excess.

Vat rates remain unchanged: the general tax rate is 21 %.