Spanish Taxes you must pay

THIS week, I’d like to talk about Spanish Taxes and though it is not an extensive view of the topic, it does give a glimpse of a subject that affects residents and non-residents.

A British citizen living over here is liable for Spanish taxes (like any Spaniard) and non-residents who may have an income, or have properties in Tenerife, could be also liable for Spanish taxes, irrespective of his/her nationality.

Personal income tax (Impuesto a la Renta, or IRPF): This tax is paid by all Spaniards resident in Spain/Tenerife. In the case of Britons working here, the tax must be paid in Spain (presenting in the UK the corresponding tax exemption). OAPs can choose in which country to pay tax on their pensions.

Non-residents income tax (Impuesto a la Renta de No-Residentes): This is applicable to non-residents who own a property in Spain/Tenerife and just work a few months during the year there.

Inheritance tax and gift tax (Impuesto sobre Sucesiones y Donaciones): Applicable in every Autonomic Community within Spanish territory. Even if the inheritors (beneficiaries) are non-resident, they must pay this tax if the assets are located in Spain.

There has been an exemption since 2008 for this tax in the Canary Islands. In fact, it is not an exemption but a rate set so low that it is the equivalent of an exemption. The exemption is applicable, subject to the conditions regulated in Law (for instance, relatives like children, spouse, or residents in the Canary Islands, and it is different for movables or immovables.

IVA (VAT): This is a national tax (standard rate 18%). In the Canaries, there is a special exemption of VAT, although the applicable tax is IGIC (similar to VAT) which has a standard rate is 5%. There are exemptions to IGIC tax (as in the case of VAT).

Transfer Tax and Stamp Duty (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados): Applicable to certain housing (real estate) transactions (conveyancing).
For instance, when you buy a property, you have to pay this tax (rate 0.75%, 6.5% depending on the cases) within a month from the date of the signature of Title Deed. If you buy directly from a developer, then the applicable tax is IGIC to be paid to the promoter and you are exempted of Transfer Tax (although you have to pay Stamp Duty).

Property Tax – rates (Impuesto sobre Bienes Inmuebles or IBI): Paid to the Town Hall every year. Normally it is due in July (although it may change depending on the Town Hall. It is calculated on the cadastral value of the property.

Rubbish collection (Basura): Normally assessed per house or complex. It is charged periodically, depending on the municipality where you live.

Motor Vehicle Tax (Impuesto sobre Vehículos de Motor): A local tax paid to the Town Hall of residence, based on the age of vehicle and power of engine. The larger the city, the higher the tax.
Not included in this list are Corporation Tax ( paid by companies), Building Tax (paid by building developers) and other special taxes (there are many) as they exceed the purpose of this article.

Mariano Zunino Siri is a lawyer registered in Tenerife Bar Association since 1991. Office in Los Cristianos at Edificio Valdes Center Torre “A”, oficina 1, piso 2º. Phone: 922 79 44 12.


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Posted by on Jun 28 2011. Filed under Legal Matters. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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