Spanish taxation and rates change annually. The government adjusts its tax policy every year according to the state of the country’s economy, to the competition with other countries, to currency etc. Therefore, the tax rate can change a few percentage points from one year to the next. The difference is minimal in terms of the numbers themselves but from the taxpayer’s point of view or from a business perspective, the financial difference can be significant.
Personal Income Tax for the Taxpayer
Although the changes in personal income tax are not huge, there appears to be a decrease between 2015 and 2016. The rate of personal income tax fell by 0.5 percentage points between these last two years.
Please find below a table detailing the rates for 2016:
Personal Income Tax 2016
|O€ – 12.450€||19%|
|12.450€ – 20.200€||24%|
|20.200€ – 35.200€||30%|
|35.200€ – 60.000€||37%|
|60.000€ – +||45%|
Therefore, in comparison with the Spanish tax register in 2015, the amount of personal income tax due will fall approximately 3% depending on the amount of gross annual salary. This decline translates as around 5€ every month. The tax register explains further the larger the gross annual salary is, the more this decrease is felt.
For example, if we take the average gross annual salary in Spain (23 918€), reduction estimates are around 2.28% which is about 70€. While for a gross salary of 40,000€ for a single man with no children, the decline of 3% means a saving of 240€ when compared with 2015.
Are you Self-Employed?
In terms of those who work for themselves, the contribution basis has increased by 1%. This basis determines the amount of contributions due for the self-employed (autonomo). So, the contribution base for the first 6 months will from 50€ up to a total of 267€, instead of 264€ as in 2015.
Taxation on dividends
Some changes have been made in terms of taxing dividends too. There has been a reduction of 0.5 percentage points on tax on property income, dividends and other financial products.