SHARE
COPY LINK
For members

TAXES

Is it better to do a joint or separate tax declaration if you’re a couple in Spain?

The deadline for filing your Spanish annual income tax return is not far off now, but working out whether to file jointly or as an individual can be tricky. Here's everything you need to know in order to help you decide.

Is it better to do a joint or separate tax declaration if you're a couple in Spain?
Should you file a joint or separate tax return in Spain if you're in a relationship or have a family? (Photo by PIERRE-PHILIPPE MARCOU / AFP)

The tax season is upon us in Spain and there’s just one more month to file your annual tax returns for the year 2021.

The deadline for this year is June 30th 2022. 

As a general rule, anyone resident in Spain for more than 183 days who earned €22,000 or more or if it’s their first time filing, needs to complete a tax return. 

READ ALSO: Who needs to file an income tax return in Spain in 2021-2022?

Figuring out how to complete your tax return, what deductions you can make and what to declare can be difficult, but on top of all this, if you’re married or in an established relationship, you’ll also need to decide whether you want to file your return individually or with your partner.

Generally, income tax returns must be declared individually, but the Agencia Tributaria (Spanish Tax Agency) does allow you to fill one out as a couple or a family unit, provided you meet certain criteria.

The Agencia Tributaria defines a family unit, in the case of marriage, as “spouses, not separated and if any, minor children, except for those who are independent”.

In the event that there is no marriage or you are separated, a family unit is defined as: “A father or mother and all their children who live with one of the two and who meet the required requirements”.

Remember, when filing the familial situation you take into account is that which existed as of December 31st, 2021.

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

Is it better to fill out my tax return as an individual or as a couple?

Depending on your situation, you could end up paying more or less tax if you file as a couple rather than an individual. Joint returns can often mean you benefit from a series of tax reductions, but this option is not open to everyone and it may not always be beneficial to you.

Before you fill out your tax return, you’ll need to calculate whether it will be better for you to file on your own or with your spouse.

You can ask your gestor or your accountant to calculate this for you or you can use the 2021 tax income simulator. This is an online version of the Agencia Tributaria portal that makes it possible to create your declaration without actually having to submit your data, therefore you can work out which situation would be best for you. 

Remember that if you decide to declare as a couple this year, you can always go back to filing individually next year, if you choose. Your circumstances change year on year, meaning that some years it may be beneficial for you to do a joint declaration while other years it won’t.

When filing a joint return, keep in mind that it will include income of any kind obtained by all members of the family unit. If one of the members of the family unit files their income tax return individually, then the rest must also do the same. One spouse cannot choose to declare it on their own the other as a couple.

Generally speaking, if both spouses work, it’s preferable to file individually. Joint taxation is preferable when only one of the spouses works. Make sure to check with your gestor or accountant that this is true in your case.

READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one

If you live and work in Spain, you’ll need to calculate whether it will be better for you to file on your own or with your spouse. Photo: Surface/Unsplash

What are the advantages of filing your tax return jointly? 

One of the main advantages of paying taxes jointly is the reduction. This means you are able to offset income gains and losses jointly. In theory, it could end up saving you a lot of money, but it could also end up costing you more too.

The basic personal allowance for each person under the age of 65 is €5,550, however, for joint declarations, the allowance of the second taxpayer is established at €3,400. The reduction for single-parent family units is €2,150 per year.

Who can file a joint 2021-2022 Income Tax return?

According to the Agencia Tributaria, the following taxpayers can opt to declare their declaration jointly:

  • Spouses who are married and live with all their children under 18 or those who have been declared incapacitated when they become of legal age.
  • De facto couples – only one of the members can form a family unit with their minor children or disabled adults. The other member of the couple will have to make an individual declaration.
  • In those cases of divorce or separation, joint taxation will correspond to the person who has custody of the children on the date on which the Personal Income Tax (IRPF) is accumulated.
  • In those cases of shared custody, the option of joint taxation can be made by either of the two parents, and the other will have to make the declaration individually.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

TAX

EXPLAINED: What are Spain’s new regional tax breaks?

Seven Spanish regions have announced tax breaks which act as an extra benefit to the income tax reductions announced by the national government recently. Read on to find out what they are and how they could help you save.

EXPLAINED: What are Spain's new regional tax breaks?

With Spain gearing up for local elections in May 2023 and a general election expected at the end of next year, regional governments and the left-wing national government are immersed in a tax war to sway the voting balance in their favour, with the official message being to help people across the country deal with the consequences of inflation and the rising energy and daily costs.

The biggest news so far has been that the national government has decided to reduce the income tax of people earning up to €21,000 ($20,200) per year, while introducing a new “solidarity tax” for those with more than €3 million.

READ MORE: How much will you save with Spain’s national income tax cut?

Spain’s Personal Income Tax (IRPF) is a state tax, but half of its collection is controlled by the autonomous communities.

As such, each region can change its income tax brackets and the reductions will apply to the 50 percent of IRPF collected by the regional government. It does not represent a reduction in the overall income tax rate, but it certainly helps.

In recent weeks, several regions have announced tax breaks as well, but unlike those announced by the country’s Tax Minister María Jesús Montero, they’re not all related to income tax for low earners alone.

Madrid

Madrid has announced that it will reduce its regional IRPF by 4.1 percent. It is scheduled to come into force at the beginning of 2023 and is aimed at helping its citizens “face high inflation and the rise in energy, fuel or food prices,” according to the local government.

Once it is fully approved this year, it will be added to the tax validated by the Community of Madrid and which will mean an estimated collective saving of more than €300 million.

Madrid also recently announced that from Q1 2023, new autónomos in the region will have their social security fees paid for by her government for their first year of being self-employed. If their monthly earnings are below minimum wage in the second year (€1,166 gross a month), they will also have their social security fees covered by the regional government.

READ ALSO: New self-employed workers in Madrid to pay no social security tax

Valencia region

In late September, Valencian regional president Ximo Puig announced several financial reforms, which will make taxes in the region more progressive.

The biggest of these reforms was a reduction in the regonal income tax rates for those earning under €60,000 gross a year. This is estimated to help 97.4 percent of Valencian taxpayers or 1.34 million workers.

The new income rates will be retroactive and apply to earnings from January 1st 2022, so will be applied to the 2022 annual income tax declaration next year.

READ ALSO: Spain’s Valencia region lowers income tax for yearly earnings under €60K

Balearic Islands

On Monday, October 3rd Prime Minister Pedro Sánchez announced several fiscal incentives for the Balearic Islands.

The 2023 General State Budget will incorporate new specific tax deductions for the Balearic Islands. This will mean a deduction of 90 percent of the tax base in the corporate tax and income tax for non-residents for investments that promote job creation in the region.

There will also be a bonus of 10 to 20 percent for the sale of assets produced in the Balearic Islands within the industrial, livestock, agricultural and fishing industries.

Both of these are due to come into effect on January 1st, 2023. The Balearic Government estimates that these incentives will mean savings of €208 million for 47,000 companies and 71,000 self-employed workers.

Galicia

The government of Galicia has also announced certain tax breaks for its residents, including lowering personal income tax, from 9.4 to 9 percent, for those who earn below €35,000. This will also be in effect retroactively from January 1st, 2022.

Galician regional president Alfonso Rueda has also decided to reduce its wealth tax for residents with worldwide assets above €700,000 by a further 25 percent to reach 50 percent.

Andalusia

In Andalusia, the authorities will reduce the IRPF rate by 4.3 percent. It will affect all taxpayers and will be applied retroactively from January 1st, 2022 and will be reflected in the personal income tax return filed next year.

Andalusian regional president Juanma Moreno also announced that Spanish nationals and foreigners who reside in the southern Spanish region or have a second home there, and whose worldwide assets are above €700,000, will receive a 100 percent tax deduction on the region’s wealth tax. In other words, they will not have to pay any tax on their assets as is the case in almost all of Spain’s regions.

Murcia

Murcia will reduce its regional personal income tax by 4.1 percent, a measure which it estimates will benefit 330,000 residents, resulting in total savings between €8.5 and €10 million. It will affect 96 percent of those required to submit the income tax return, according to the regional government. 

Castilla y León

The regional government of Castilla y León has approved a draft law on tax reductions, which will allow personal income in the first tax bracket to be lowered by 5.3 percent.

Aragón, Cantabria and Navarra

Although the northern regions of Aragón, Cantabria and Navarra have not yet announced tax breaks, all three of them are currently contemplating it.  

In late September, Aragón’s regional president Javier Lambán admitted that it was a “possibility” if the four parties that make up his government agree.

In Navarra, the government is working on an “extraordinary deduction” on personal income tax for those who earn less than €32,000 gross per year.

The leader of the Cantabrian region Miguel Ángel Revilla also stated that “If the tide goes that way, we are not going to be left out”.

SHOW COMMENTS