Taxes in Spain in 2025

Spain remains one of the most attractive countries in Europe for both living and doing business. However, along with its pleasant climate and high level of services, the country has its own tax regulations that are important for both foreigners and residents to understand.

In this article, we’ll look at which taxes apply in Spain and how much individuals and companies are required to pay. We’ll also point out what to keep in mind if you’re planning to live or work in this country.

Earlier, we wrote about salaries and finding jobs in Spain.

In 2025, Spain maintains a clear system for determining tax residency. This status defines what kind of taxes you’ll have to pay — on your worldwide income or only on income earned within Spain.

A person is considered a tax resident of Spain if they have spent more than 183 days in the country during a calendar year. These days do not need to be consecutive, only the total count matters.

Another key criterion is the so-called “center of vital interests”. This means that your main job, business, property, or family is based in Spain. Even if you personally spend fewer than 183 days in the country, you are presumed to be a tax resident if your spouse and minor children live there permanently.

If a person qualifies as a tax resident, they must declare and pay taxes on all income worldwide — including salaries, business profits, and investments. Residents are subject to a progressive income tax scale: from 19% on lower incomes to 47% on amounts exceeding €300,000 per year. Residency status also affects property and inheritance taxes, as well as eligibility for various deductions and benefits.

Non-residents, on the other hand, are taxed only on income generated in Spain — for example, rental income or earnings from work performed in the country. They pay flat rates, which are usually higher than those applied to residents.

If someone wishes not to be considered a tax resident of Spain, they can prove they pay taxes in another country by providing official documentation. In cases of dual residency, Spain relies on double taxation treaties signed with other countries to resolve conflicts.

The way income tax is calculated in Spain depends on whether an individual is classified as a resident or non-resident.

Residents pay IRPF (Impuesto sobre la Renta de las Personas Físicas) — a personal income tax applied to worldwide income, including salaries, business profits, dividends, rental income, and other earnings.

Spain uses a progressive tax scale, meaning that higher income levels are taxed at higher rates. The exact rates may vary slightly by region, but the average national brackets are:

For very high incomes exceeding €300,000, the rate can reach 47%.

Richard is a tax resident of Spain with an annual income of €50,000. At first glance, it seems that his entire income will be taxed at 37%, but Spain’s progressive scale means otherwise:

Total tax payable: €14,200.63.

Residents may also qualify for deductions and allowances, which can reduce the tax burden. These depend on marital status, age, number of dependents, disability, and other personal factors.

Non-residents pay IRNR (Impuesto sobre la Renta de no Residentes) — a tax only on income earned within Spain, such as rental income, employment, or business activity in Spanish territory.

The standard tax rate for most non-residents is 24%. However, citizens of EU and EEA countries benefit from a reduced rate of 19%, provided certain conditions are met.

Unlike residents, non-residents are not generally entitled to tax deductions or credits, unless a specific double taxation treaty between Spain and their home country allows for them.

Freelancing in Spain is officially regulated through registration as a self-employed individual, known as an autónomo. This status gives the right to work independently but also comes with specific tax and social security obligations.

Freelancers pay income tax on a progressive scale ranging from 19% to 47%, depending on their annual income. The taxable base is calculated as the difference between total income and verified business expenses.

For those just starting out as autónomos, there are tax relief measures: during the first years of activity, the withholding rate may be reduced to 7–15%.

In addition, every registered freelancer must pay monthly social security contributions. The amount depends on the chosen contribution base and typically ranges from €230 to €500 or more.

Beginners benefit from a reduced rate — during the first two years, contributions usually amount to about €80 per month. These payments provide access to public healthcare, pensions, and sickness benefits.

Freelancers whose services are subject to Value Added Tax (VAT) must charge and remit VAT at the standard rate of 21%.

However, starting in 2025, a special small business regime allows freelancers with annual income below €85,000 to avoid filing quarterly VAT returns.

Freelancers pay taxes quarterly and must submit an annual tax return summarizing income and expenses for the year.

It’s essential to maintain accurate bookkeeping to correctly calculate the taxable base — failure to comply with reporting rules can result in fines, account freezes, or other penalties.

A freelancer earning around €3,300 per month in Spain can expect to pay 24–30% in income tax (IRPF).

Social security contributions will amount to about €80 per month for newcomers and up to €450 per month under the standard rate.

The “Beckham Law” is a special tax regime in Spain designed to attract foreign professionals and investors. It was named after the famous footballer David Beckham, who was among the first to benefit from this tax incentive after moving to Madrid.

The main feature of the regime is that new tax residents of Spain can pay a flat income tax rate of 24% only on income earned within Spain. This is much lower than the standard progressive income tax rate, which can reach up to 47%. The benefit is valid for six years from the moment the taxpayer becomes a resident.

Eligibility applies to foreign specialists who have not been Spanish tax residents in the previous five years. The key requirements typically include having an employment contract with a Spanish company, holding a managerial position, or running an innovative business in Spain.

Since 2023, the program has also been extended to include digital nomads and remote workers, making it even more flexible and relevant in today’s global job market.

Under this regime, foreign income is exempt from Spanish taxation. The 24% flat rate applies to annual income up to €600,000. Any income above that threshold is taxed at 47%.

For qualified professionals, the Beckham Law significantly reduces the overall tax burden and makes relocation to Spain much more attractive, while for the country it serves as an effective way to attract skilled talent and boost economic growth.

Spain has a comprehensive tax system covering real estate, corporate profits, and investment income. The exact tax obligations for foreigners depend on their residency status and the type of income they receive.

Every property owner must pay an annual property tax (IBI — Impuesto sobre Bienes Inmuebles). The rate is based on the property’s cadastral value and typically ranges from 0.4% to 1.1%.

When purchasing property on the secondary market, buyers pay a transfer tax (ITP) of 6–10%. For new properties, this tax is replaced by VAT (IVA) at a rate of 21%.

When selling real estate, the capital gains tax applies — between 19% and 26%, depending on the amount of profit. If the property is rented out, the rental income is also taxable: 19% for EU citizens and 24% for non-EU residents.

For companies, Spain applies a standard corporate income tax rate of 25%. Certain business categories, such as startups, can benefit from reduced rates and tax incentives.

In addition, all businesses must charge and remit VAT (IVA) at the standard rate of 21% on most goods and services and are required to file regular financial and tax reports.

Dividends, bank interest, and capital gains from the sale of securities are subject to progressive tax rates ranging from 19% to 26%. Non-residents generally pay the same rates on income from Spanish investments, though specific rules may vary.

Spain offers a wide range of tax benefits for both individuals and companies. These measures are designed to support families, encourage entrepreneurship, and promote innovation.

Spanish tax law provides several ways to reduce personal income tax (IRPF) through deductions and allowances, including:

Businesses in Spain can also benefit from tax incentives, especially those focused on innovation and growth:

In addition to general incentives, Spain has introduced special tax regimes to attract talent and investment:

In summary, we’ve reviewed the main tax rates and types in Spain. The Spanish tax system combines progressive income taxation, corporate levies, and property and investment taxes. At the same time, the government provides a wide range of tax benefits for families, entrepreneurs, and innovation-driven projects, helping to reduce the overall tax burden and encourage economic growth.

For residents, the key obligation is to pay taxes on worldwide income, while non-residents are taxed only on income earned in Spain. Therefore, before relocating or investing, it’s important to understand which tax status you’ll obtain and what responsibilities it entails.

If you want to send money from Spain to your home country, try the Korona app, available for free on Google Play and App Store. The service currently operates in 60+ countries, supports multiple currencies, and transfers are usually completed within just a few minutes.