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TAXES

La Renta: The important income tax deadlines in Spain in 2023

Spain's annual income tax return is called 'la declaración de la renta'. This year, you must file your taxes for 2022. Here are the key dates and deadlines you should add to your calendar.

Published: 12 January 2022 13:11 CET
Updated: 11 April 2023 10:48 CEST
Deadlines for presenting the declaracion de la renta in Spain
Make sure you didn't miss any tax deadline in Spain with this handy calendar. Photo: Annie Spratt/Unsplash

Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas) and is commonly shortened to la renta.

The annual income tax return is called la declaración de la renta and is a progressive tax – in other words, the more you earn, the more you pay.

You need to present a tax return in Spain if:

  • You are employed and have an annual income over €22,000 from a single employer 
  • You have earned over €15,000 from multiple employers, as long as the amount from the second or third employer exceeds €1,500 per year. 
  • You are self-employed or have your own business
  • Your income from yearly dividends, interest and capital gains exceeds €1,600
  • You receive rental income over €1,000 per year
  • It is the first year that you are filing a tax return in Spain

The Spanish tax year runs from January 1st to December 31st, meaning that during the tax campaign this year, you will present your taxes from January 1st to December 31st 2022.

April 11th – This is the date when the income tax campaign begins. From this date, you can present your taxes for 2022 online. According to Spain’s tax agency the Agencia Tributaria, nine out of every 10 declarations are done online.

You can present them via Agencia Tributaria website by following this link HERE. 

You will need to have a Digital Certificate or to register with the Cl@ave PIN security system to allow you to access your personal data securely online. Get one either via the Agencia Tributaria page here or by booking a cita previa (appointment) at one of the many regional Tax Agency offices.

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May 5th – From May 5th, you can also present your taxes via the phone if don’t want to do it online. Appointments to do this can be made from May 3rd to June 29th. You will be given the option of speaking to an adviser at the Tax Office who will talk you through the process.

You can do this by calling 901 200 345 or 91 535 68 13. 

June 1st – From June 1st until June 30th, you can present your personal income tax in person at the various Agencia Tributaria offices around the country. Remember that you will need to book a cita previa (appointment) in advance. 

You can book your appointment online at the Agencia Tributaria website, by choosing which office you want to book it through or by calling 901 22 33 44 or 91 553 00 71. Appointments can be booked from May 25th until June 29th. 

June 27th – The deadline by which you must submit your tax return if you want to pay via direct debit or if you are owed any money back and what to be paid directly into your bank account.

June 30th – The end of the tax campaign for earnings in 2022. However you decide to present your taxes, you need to make sure you do it by this date.

READ ALSO: The tax changes in Spain in 2023 that you need to know about

Tax changes for 2023

  • IRPF – This year, the Ministry of Finance will change the way they calculate the amount of Impuesto de la Renta para las Personas Físicas (IRPF) or personal income tax, you have to pay. In total, more than 250,000 workers will benefit from the changes and in some cases, will save more than €1,000 per year.
  • Minimum exemption raised – The government has also raised the minimum exemption from €14,000 to €15,000 to help the most vulnerable in Spanish society.
  • New social security thresholds for self-employed – Autónomos (self-employed people) will be paying social security contributions based on real income, instead of a set amount each month. Essentially anyone earning under €1,300 per month will be paying less in social security fees, those earning between €1,300 and €1,700 will pay the same amount as they do now – €294 per month, while anyone earning over €1,700 will be paying more.
  • Wealth tax – Three brackets that have been established are a rate of 1.7 percent for fortunes between €3 and €5.3 million, 2.1 percent for wealth between €5.3 and €10.6 million, and 3.5 percent for fortunes over €10.6 million.
  • Savings tax – Large savings and capital income will also be taxed at a higher rate in Spain in 2023. For taxable income over €200,000, the rate will be increased by one percent, from 26 percent to 27 percent. In addition savings of €300,000 or more will be taxed at 28 percent.

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TAXES

How foreigners in Spain’s capital can pay less tax with the new Mbappé Law

The regional government of Madrid is finalising the approval of the so-called Mbappé Law, a very favourable new personal income tax regime for foreigners who settle and invest in the Spanish capital.

Published: 23 April 2024 16:44 CEST
How foreigners in Spain's capital can pay less tax with the new Mbappé Law

Similar to Spain’s Beckham Law, introduced in 2005, this piece of legislation is named after a famous footballer who will be the first to benefit from lower tax rates, as will other foreigners in Madrid.

Kylian Mbappé is a French footballer who currently plays for Paris Saint-Germain, but looks set to sign for Real Madrid this summer.

The objective of the right-wing Madrid government of Isabel Díaz Ayuso is to attract more foreign investment to the region with beneficial fiscal rates.

READ ALSO – Beckham Law: What foreigners need to know about Spain’s special tax regime

Unlike the Beckham though, the Mbappé Law is only designed to benefit foreigners who move to the region of Madrid, it’s not open to those who want to move elsewhere in Spain.

Also unlike the Beckham law, foreigners will only be able to reap the rewards of the Mbappé Law if they invest money into the region. This could be in the form of investments in companies or in vehicles, but it cannot include investments in property.

Specifically, applicants will be able to deduct 20 percent of all the money they invest in the Madrid region.

The law applies to regional personal income tax, which accounts for approximately half of entire tax payments in Spain, since the other part corresponds to the State’s collection.

Normally, a foreigner like Mbappé will be taxed in the highest income bracket, as they will earn well over €300,000 gross per year.

When the law is finally approved however, Mbappé could avoid paying the regional income tax entirely, in the event that 20 percent of his Madrid investments represent the same amount that he would have had to pay in taxes on his salary.

READ ALSO: Why you should move to this region in Spain if you want to pay less tax

How will the Mbappé Law work?

For example, if Mbappé earned €40 million gross (not his actual salary), he would normally be charged €18 million in personal income tax.

Of this, 24.5 percent would correspond to the state tax, and this would have to be paid as normal. This means the state would collect €9.8 million from him in tax.

The change happens with the rest of the tax – the regional tranche. If he doesn’t make any investments, which now seems unlikely, he would have to pay €8.2 million in tax to Madrid.

If on the other hand the French superstar invested €40 million in Spanish companies or state bonds – he could deduct €8 million, which represents 20 percent of that amount.

This would mean that Mbappé’s tax rate would remain at 24.5 percent, a marginal rate that is slightly higher than the personal income tax for a worker who earns €20,000 and receives around €1,300 net per month.

As a percentage, of course, the amounts in Mbappé’s case are going to be huge. So, instead of paying €18 million in total, he would only pay €9.8 million.

Overall, this legislation signals that Madrid will become even more attractive to foreign investors.

By contrast, those who move to Catalonia will have to pay 25.50 percent in regional income tax, which added to the 24.5 percent of the state tax would increase personal income tax by half. So as a Real Madrid player Mbappé would earn €30.2 million, but if he signed for Barça he would pocket €20 million.

What’s the catch?

There are a few caveats to the new law, which primarily depend on how long you stay in Madrid. The new regulations establish that you have to stay and live in Madrid for a total of six years. If you leave before those six years are up, then you will be forced to return part of the tax savings you made.

What does this mean for Madrid?

The regional government of Madrid estimates that 30,000 foreign investors could choose to move to the region specifically in order to benefit from the new law and that it will cost the public coffers €60 million per year.

The idea is that Madrid will continue to attract foreign investment. Madrid’s leader Isabel Díaz Ayuso recently claimed that: “Two out of every three euros that arrive in Spain as an investment from abroad do so in projects that are developed within the Community of Madrid. In the last decade, the flow of investments has doubled”.

Madrid already has some of the best tax incentives in Spain. Residents pay less tax on their income, assets, inheritance and property transactions and conditions are beneficial to high-income earners in particular.

Financial experts agree that Madrid is among, if not the top region, with the most lenient tax system in the country, and when the Mbappé law comes into force, the region will benefit from even more incentives.

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