A detailed explanation of Spanish income tax written for people living in or moving to Spain, including how IRPF is calculated, state and regional tax rates, what income is taxable, personal minimums and deductions, foreign income and double tax treaties.
Once you become a Spanish tax resident, your worldwide income will be subject to the Spanish income tax system including salary paid by an overseas employer, profits from self-employment, rent from a property you have retained abroad, pensions, dividends, interest and investment gains.
Spain has double taxation agreements with many countries, including the UK and US. These agreements determine which country can tax particular types of income and how double taxation should be relieved where both countries have taxing rights.
This article explains how Spanish income tax works for foreign nationals, the income that can be taxable, the rates that can apply, the impact of regional and state level income tax rates and how personal minimums work.
This guide provides general information about Spanish taxation and must not be considered personal tax advice. Spanish tax treatment depends on your residence status, autonomous community, income, assets and the relevant double taxation agreement. This article also contains references to income tax rates and examples. You must not rely on these as tax rates can change. If you are moving to Spain, taking advice before becoming Spanish tax resident is essential.
The main personal income tax in Spain is Impuesto sobre la Renta de las Personas Físicas, usually referred to as IRPF and a Spanish tax resident is generally subject to IRPF on their worldwide income. This means Spain can potentially tax income regardless of where it arises or where the money is paid.
For example, as well as declaring any/all income earned in Spain, someone living in Spain could potentially have to declare:
Keeping the money in another country does not, by itself, keep it outside the Spanish tax system. The treatment of each overseas source of income can nevertheless be different, particularly where a double taxation agreement applies.
If you move to Spain and work there, income you earn from employment or self-employment will normally be subject to Spanish income tax. If you become Spanish tax resident and take a job with a Spanish employer, your salary will normally be treated as employment income and taxed through the Spanish IRPF system.
This includes wages, bonuses and certain benefits provided by your employer.
If you work for yourself in Spain, your profits will generally be treated as income from an economic activity instead. This includes many freelancers, consultants, tradespeople and other professionals operating as autónomos.
Both employment income and profits from economic activities generally form part of the general income tax base, rather than the separate savings tax base used for income such as dividends, interest and many capital gains.
Suppose you move from the UK to Spain and take a job in Madrid paying €50,000 a year.
Your salary is Spanish employment income and will normally be subject to Spanish IRPF. Your employer will generally make income tax withholdings from your salary during the year.
These deductions are payments towards your eventual income tax liability rather than necessarily being the final amount of tax you owe.
Your final liability depends on factors including your taxable income, deductible expenses, personal and family circumstances and the autonomous community in which you live.
This is important because Spanish income tax rates on general income have both state and regional components.
If instead you move to Spain and earn €50,000 from working as a self-employed consultant, the tax calculation works differently.
Rather than being taxed on a salary from an employer, you will generally calculate the income from your economic activity after taking account of allowable business expenses and the rules applying to your particular activity.
That resulting taxable income can then form part of your general IRPF tax base.
Being self-employed can also create obligations beyond income tax, including registration and Spanish social security contributions.
Generally, being British, American, French or another nationality does not give you a different ordinary IRPF rate simply because you are a foreign national. If you are an ordinary Spanish tax resident, Spanish IRPF rules apply to your taxable income in broadly the same way as they do to other Spanish residents, but your individual situation could impact how you’re taxed in Spain.
For example, you might qualify for Spain's special tax regime for inbound workers, commonly called the Beckham Law. You might also continue receiving income from another country, in which case a double taxation agreement may become relevant.
Your nationality can also matter in specific treaty situations. A notable example is the treatment of certain government-service pensions.
The important distinction is whether you are Spanish tax resident, what type of income you receive, where it arises and whether any special regime or international tax treaty applies.
Spanish domestic rules generally consider an individual tax resident if they spend more than 183 days in Spain during the calendar year.
You can also be considered resident if the main centre or base of your economic activities or interests is in Spain. There is also a rebuttable presumption of Spanish residence where your spouse, from whom you are not legally separated, and dependent minor children habitually live in Spain.
For people relocating to Spain, the timing of the move can therefore have significant tax consequences. Our overview of Spanish tax for foreign nationals provides a more detailed overview of Spanish residency rules: Spanish tax for foreign nationals
Spanish IRPF covers several different categories of income. Importantly, they are not necessarily all taxed in the same way. Income generally falls into either the general tax base or the savings tax base.
This distinction matters because different tax rates apply.
Salary, wages, bonuses and many employment benefits are generally treated as employment income. Even if you move to Spain and continue working remotely for a foreign employer, where you physically perform your employment is important.
The double taxation agreement between Spain and the employer's country can then determine how the two countries' taxing rights interact.
Profits from self-employment and professional activities can also fall within Spanish IRPF.
For example, imagine a consultant moves to Barcelona and continues earning €80,000 a year from clients in the UK and US. As the individual is living and carrying out their professional activity in Spain, the clients being overseas does not necessarily prevent Spain taxing the profits.
There can also be separate questions concerning Spanish social security, registration as an autónomo and, for business owners, whether running an overseas company from Spain creates additional corporate tax or permanent establishment issues.
A Spanish resident who retains a rental property in another country will generally need to consider that rental income in Spain. However, the country where the property is located will commonly retain taxing rights over income arising from that property.
This is where a double taxation agreement becomes important.
A British national living in Spain who rents out a property in Manchester, for example, may have UK tax obligations because the property is in the UK while also having to declare the income in Spain as part of their worldwide income.
Private and occupational pensions will commonly be taxable in Spain where the recipient is Spanish tax resident, although the relevant double taxation agreement must always be checked, but government service pensions can be treated differently.
Interest from bank accounts and many other savings products normally forms part of the Spanish savings tax base. For a Spanish tax resident, this can include interest from accounts held outside Spain.
Dividends generally form part of the savings tax base and overseas earned dividends can create taxation in both the country where the company is located and Spain.
The relevant double taxation agreement may restrict how much tax the source country can impose and Spain may then provide relief for qualifying foreign tax.
Capital gains, including gains on investments, will commonly fall within the savings tax base, which is particularly important for people moving to Spain with existing investment portfolios.
Remember, a tax-efficient investment in your previous country (eg an ISA in the UK) is not necessarily tax-efficient in Spain. Income and gains arising within the ISA may therefore need to be considered under Spanish tax rules once the holder is Spanish tax resident.
This is one reason investment structures should ideally be reviewed before moving rather than after Spanish residence has already begun.
Spanish income tax is progressive, meaning that higher portions of income can be taxed at higher rates. However, there is not one simple nationwide IRPF table that tells every resident exactly what they will pay.
Spanish income tax on general income has two components: a state rate, which applies throughout Spain and a regional rate set by the autonomous community in which you live.
Currently the state income tax rates range from 9.5% to 24.5%. Your autonomous community then applies its own progressive rates on top.
For example, Madrid's regional rates range from 8.5% to 20.5%. This means someone living in Madrid can face combined marginal income tax rates ranging from 18% at the bottom of the scale to 45% at the very top.
As an illustration, someone with taxable general income of €40,000 would have a marginal rate of 18.5% under the state scale and 17.4% under the Madrid scale, giving a combined marginal rate of 35.9% on that portion of their income.
Other autonomous communities set different regional rates and thresholds, so two people with identical taxable income can pay different amounts of IRPF depending on where in Spain they live.
The rate applicable to you also depends on factors including:
Spain also provides a personal and family minimum (mínimo personal y familiar), representing an amount considered necessary to meet basic personal and family needs which leads to a deductible amount from your final tax bill.
Currently the standard personal minimum under the state IRPF calculation is €5,550. This increases by €1,150 from age 65 and by a further €1,400 from age 75.
Additional minimums can apply for children and other dependants. For example, the national minimum for descendants is €2,400 for the first child, €2,700 for the second, €4,000 for the third and €4,500 for the fourth and subsequent children, provided the relevant conditions are met. An additional €2,800 applies for a qualifying child under three.
Autonomous communities can adjust some of these amounts for the regional part of IRPF. Madrid, for example, has a standard personal minimum of €5,956.65 for 2025.
It’s important to understand that this minimum is not simply deducted from your salary and then everything earned above that figure is taxed.
Instead, the tax due on your income is calculated first. Spain then calculates the tax attributable to your personal and family minimum and removes that amount from the calculation.
The amount of personal and family minimum available therefore depends on factors including your age, children, dependent relatives, disability and, for the regional calculation, where in Spain you live.
For example, the standard state personal minimum is currently €5,550. As this falls entirely within the lowest state tax band of 9.5%, the tax attributable to the minimum is:
€5,550 × 9.5% = €527.25
In Madrid, the standard regional personal minimum is €5,956.65 and the lowest Madrid rate is 8.5%:
€5,956.65 × 8.5% = €506.32
For a Madrid taxpayer able to use the standard personal minimum, these two calculations reduce the state and Madrid elements of their IRPF calculation by a combined €1,033.57.
How does this all come together to calculate someone’s personal income tax liability?
Let’s use an example of a Madrid resident with €125,000 of general taxable income throughout 2025, under 65, no children and no additional deductions or reductions, the calculation is:
State (national) component
|
Portion of income |
Rate |
Tax |
|
First €12,450 |
9.5% |
€1,182.75 |
|
€12,450–€20,200 |
12% |
€930.00 |
|
€20,200–€35,200 |
15% |
€2,250.00 |
|
€35,200–€60,000 |
18.5% |
€4,588.00 |
|
€60,000–€125,000 |
22.5% |
€14,625.00 |
|
Total State IRPF, before personal minimum |
€23,575.75 |
The standard state personal minimum is €5,550 and the tax attributable to that minimum is calculated separately (i.e. €5,550 x 9.5%) at €527.25 which is the deducted from the total due.
The total state IRPF (State income tax due) is: €26,575.75 – €527.25 = €23,048.50.
Madrid (regional) component
|
Portion of income |
Rate |
Tax |
|
First €13,362.22 |
8.5% |
€1,135.79 |
|
€13,362.22–€19,004.63 |
10.7% |
€603.74 |
|
€19,004.63–€35,425.68 |
12.8% |
€2,101.89 |
|
€35,425.68–€57,320.40 |
17.4% |
€3,809.68 |
|
€57,320.40–€125,000 |
20.5% |
€13,874.32 |
|
Total regional tax, before personal minimum |
€21,525.42 |
Madrid's standard regional personal minimum is €5,956.65 and the tax attributable to that minimum is calculated separately (i.e. €5,956.65 x 8.5%) producing a €506.32 reduction, which is deduced from the total tax calculation.
The total Madrid IRPF (regional income tax due) is: €21,525.42 - €506.32 = €21,019.11
Total IRPF (income tax) due is as follows:
Savings income is subject to a separate progressive scale to income tax. Currently the combined savings rates are:
These rates can apply to income such as dividends and interest and to relevant capital gains.
Again, the calculation is progressive. Someone with €60,000 of taxable savings income does not pay 23% on the entire €60,000.
Yes, in addition to the personal minimums, there are also specific exemptions that can be important in international situations.
One example is the exemption under Article 7.p of the Spanish IRPF legislation for qualifying employment income relating to work physically performed abroad.
Subject to detailed conditions, up to €60,100 per year of qualifying employment income can be exempt.
This is not a general exemption for anyone who works for a foreign company. The nature of the work, where it is performed, who benefits from it and the taxation of the country where the work takes place all matter.
Anyone intending to rely on a specific exemption should establish that the conditions are met rather than assuming it applies.
Some people moving to Spain may qualify for Spain's special tax regime for inbound workers, commonly known as the Beckham Law.
Eligible individuals who move to Spain can elect into a special regime under which their taxation differs substantially from ordinary Spanish IRPF.
The regime has been expanded over time and can potentially apply to certain employees, remote workers, entrepreneurs and other qualifying individuals.
Under the special regime, qualifying employment income is generally taxed at 24% up to €600,000 and 47% above €600,000, subject to the detailed rules.
Whether the regime is advantageous depends heavily on the person's circumstances, particularly their income and overseas assets and investments.
Someone considering a move to Spain should therefore investigate eligibility before or as part of planning the move, rather than assuming ordinary IRPF will necessarily apply.
Spain has double taxation agreements with many countries designed to allocate taxing rights and provide mechanisms for relieving double taxation, which ultimately means you are unlikely to have to pay tax on the same income in more than one country.
A tax treaty might give:
Establishing how a tax treaty gets implemented therefore depends on the follow sequence of questions:
Correctly interpreting tax treaties becomes particularly important when someone moves to Spain while retaining substantial financial connections with another country, which makes getting tax advice as early as possible essential.
Where foreign income is taxable in Spain and has also been taxed overseas, Spanish law can provide a deduction for international double taxation.
Broadly, the deduction is limited to the lower of:
This is important because foreign tax paid is not necessarily refunded or credited in full.
For example, paying €10,000 of tax in another country does not automatically entitle you to subtract €10,000 from your Spanish tax bill.
The treaty, Spanish domestic legislation and the amount of Spanish tax attributable to that income all need to be considered.
The purpose of pre-move tax planning is to understand what will change before Spanish tax residence begins. For someone moving to Spain, that might mean reviewing:
Consider someone who plans to sell a significant investment six weeks after moving to Spain.
Whether the disposal takes place before or after Spanish tax residence begins could materially change the tax position.
Likewise, someone moving with a UK company, a £250,000 ISA and a rental property has several different issues to consider. Treating them all simply as “foreign income” misses the point.
The important question is how each source of income will be treated once Spain becomes your country of tax residence.
For that reason, the best time to understand the Spanish tax consequences of a move is usually before the move takes place, while there may still be an opportunity to organise your affairs appropriately.
Spanish income tax can change from one tax year to the next and changes do not necessarily happen across Spain at the same time.
Within Spain's common tax regime, 15 autonomous communities can set their own regional IRPF rates and thresholds alongside the state rates. The Basque Country and Navarre operate separate tax systems, while Ceuta and Melilla have special tax arrangements.
This creates a particular problem when researching Spanish tax online.
An article may have been accurate when it was published but contain rates, thresholds or allowances that have subsequently changed. Even recently updated articles can quote a national rate without explaining the regional element or use figures from one autonomous community as though they apply throughout Spain.
The same caution should be applied to AI-generated tax information. AI can be extremely useful for understanding terminology and identifying questions to investigate, but it can return historic tax rates, combine figures from different tax years or regions, or provide a confident answer without identifying an exemption or treaty provision that changes the position.
More importantly, knowing the current tax rates does not tell you what your Spanish tax liability will be. Your residence status, where you live in Spain, the type and source of your income, family circumstances, personal minimums, available exemptions and deductions and any applicable double taxation agreement will all affect the final tax owed, and to who.
If you are moving to Spain, professional cross-border tax advice is essential before you move.
A specialist can consider your actual circumstances using the rules applying to the relevant tax year and region, rather than relying on a headline Spanish income tax rate or a generic online calculation.
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