Moving To Spain - Frequently Asked Questions

How does tax work in Spain?

There are similarities between the Spanish system and the tax systems in other countries. For example, Spanish employment income is taxed in a way similar to PAYE in the UK. Other parts are different. Here are the main differences in the tax systems.

• The tax year in Spain is the Calendar Year
• Capital Gains tax rates are in bands and are progressive. The more gain in any one year moves into a higher band, the higher percentage tax rate. The amount of gain is based on all sales in total, not on each individual transaction. If your total gain were €5,999 the tax rate for that gain is 19%. If you have gains from three different sources, for example, a property sale, an investment sale and bank interest, the rates of tax would be 19% for the first €6,000 of gain and 21% on the next €44,000. There are further bands above these rates.