Key figuresPersonal & estate taxation
Spain
MADRID
1| GIFT & INHERITANCE
1.1 RATES
| TAXABLE BASE UP TO (€) | TAX 1 (€) | REMAINING TAXABLE BASE UP TO (€) |
RATE (%) |
|---|---|---|---|
| 0.00 | 0.00 | 8,313.20 | 7.65 |
| 8,313.20 | 635.96 | 7,688.15 | 8.50 |
| 16,001.35 | 1,289.45 | 8,000.66 | 9.35 |
| 24,002.01 | 2,037.51 | 8,000.69 | 10.20 |
| 32,002.70 | 2,853.58 | 8,000.66 | 11.05 |
| 40,003.36 | 3,737.66 | 8,000.68 | 11.90 |
| 48,004.04 | 4,689.74 | 8,000.67 | 12.75 |
| 56,004.71 | 5,709.82 | 8,000.68 | 13.60 |
| 64,005.39 | 6,797.92 | 8,000.66 | 14.45 |
| 72,006.05 | 7,954.01 | 8,000.68 | 15.30 |
| 80,006.73 | 9,178.12 | 39,940.85 | 16.15 |
| 119,947.58 | 15,628.56 | 39,940.87 | 18.70 |
| 159,888.45 | 23,097.51 | 79,881.71 | 21.25 |
| 239,770.16 | 40,072.37 | 159,638.43 | 25.50 |
| 399,408.59 | 80,780.17 | 399,408.61 | 29.75 |
| 798,817.20 | 199,604.23 | And over | 34.00 |
1.2 MULTIPLYING FACTORS
| PRE-EXISTING ASSETS (€) |
GROUPS I and II |
GROUP III |
GROUP IV |
|---|---|---|---|
| From 0.00 to 403,000 | 1.0000 | 1.5882 | 2.0000 |
| From 403,000 to 2,008,000 | 1.0500 | 1.6676 | 2.1000 |
| From 2,008,000 to 4,021,000 | 1.1000 | 1.7471 | 2.2000 |
| From more than 4,021,000 | 1.2000 | 1.9059 | 2.4000 |
1.3 REDUCTIONS
| REDUCTIONS | INHERITANCE | GIFT ** |
|---|---|---|
| RELATIONSHIP |
• Group I: €16,000.00 and €4,000.00 for each year that the beneficiary is under 21, up to €48,000.00. • Group II: €16,000.00. • Group III: €8,000.00. • Group IV: No reduction is applied. |
Not applicable. |
| DISABILITY |
• Equal to or greater than 33%: €55,000.00. • Equal to or greater than 65%: €153,000.00. |
Not applicable. |
| LIFE INSURANCE* | 100% reduction, with a limit of €9,200.00 if from Group I or Group II. | Not applicable. |
| HABITUAL RESIDENCE |
Reduction of 95% of the net value of the home as part of the inheritance with a limit of €123,000.00, for each taxpayer, applicable to Groups I and II (without conditions of age or cohabitation with the deceased), and to collateral relatives (brothers, etc.) over 65 years of age and who had lived together for at least 2 years prior to the death. It is compulsory to keep the home for 5 years, unless the acquirer dies within this period. |
Not applicable. |
| INDIVIDUAL COMPANY |
Reduction of 95% of the net value of the business (source of their main and habitual economic activity) for taxpayers from Groups I and II, and also Group III if there are none from I and II, provided that the acquisition is maintained for 5 years following the death, unless the acquirer dies within that period. |
Reduction of 95% of the acquisition value if: • Donor 65 years of age or older, or in a state of permanent, absolute or major disability. • Donor must cease to exercise management functions and receive remuneration. • Donor must keep the acquired + IP exemption right for 10 years unless he/she dies during this period. |
| HISTORIC HERITAGE ASSETS |
95% reduction for Groups I and II if: • Possession for 5 years from death unless the acquirer dies within that period. |
Reduction of 95% of the acquisition value for Groups I and II if: • Donor 65 years of age or older or in a state of permanent, absolute or major disability. • Recipient: Possession and right to IP exemption for the following 10 years, unless he/she dies within this period. |
| TERRORIST ACTS | 99% reduction on amounts received in respect of compensation paid by public administrations to heirs for acts of terrorism. It does not apply if these allowances are subject to personal income tax. | Not applicable. |
** CASH GIFT:
100% reduction up to a limit of €250,000 applicable to Groups I and II and siblings to be made from 01/01/2019.
The gift must be used within one year for one of the following purposes:
- Acquisition of habitual residence: As defined in provision 23 of Law 35/2006 of 28 November on Personal Income Tax, and in its implementing regulations in force since 01/01/2013.
- Acquisition of company shares or holdings: As a consequence of agreements to incorporate or increase the capital of entities (SA, SAL, SRL and SC).
They must comply with the requirements of article 15 of DL 1/2010 of 21 October. - Acquisition of goods, services and rights: For the development of the donee’s individual company or professional business.
If it is not used for these purposes within the established period, the donee has one month to present a complementary self-assessment (+ interest for late payment).
To apply the limit of €250,000.00, all gifts made by the donor in favour of the same donee in the 3 years prior to the moment of accrual (indicated purposes) will be computed.
1.4 BONUS
| INHERITANCE | GIFT | |
|---|---|---|
| GROUPS I and II | 99% from 01/01/2017 | 99% provided it is formalised in a public document and the origin of the funds is justified. |
| GROUP III |
25% if death occurs before 28/10/2022 25% if death occurs on or after 28/10/2022 |
25% between siblings from 28/10/2022 25% between uncles and aunts and nephews and nieces from 28/10/2022 |
| GROUP IV | No bonus applies | No bonus applies |
1.5 KINSHIP GROUPS
• GROUP I Descendants (children, grandchildren, etc.) and adopted children under 21 years of age.
• GROUP II Descendants (children, grandchildren, etc.) and adopted children aged 21 or over, spouse, ascendants
(parents, grandparents, etc.).
• GROUP III 2nd and 3rd degree collateral relatives (siblings, nephews and nieces), ascendants and descendants by affinity.
• GROUP IV 4th degree collateral relatives, more distant relatives and non-relatives.
1.6 USUFRUCT (ISD)
CONSTITUTION
- Division of Property (usufruct constitution): Inheritance or Gift
- TEMPORARY USUFRUCT:
• Taxable base: calculated by applying 2% to the total value of the goods per year, not exceeding 70%.
• Periods of less than one year are not taken into account.
For less than one year, 2% of the value of the goods will be computed. - LIFE USUFRUCT:
• Estimated value equal to 70% of the total value of the assets when the usufructuary is under 20 years of age. It is reduced by 1% for each additional year, with a minimum limit of 10% of the total value (from 79 years of age of the usufructuary = 10%).
IMPORTANT: Value of the right of bare ownership = difference between the total value of the assets and the value of the usufruct. - TWO TAX RETURNS:
1. Usufructuary: for the acquisition of the right of usufruct (value of the right, less the corresponding general reductions).
2. Bare owner: for the acquisition of the bare ownership (value of the bare ownership, reduced by the corresponding general reductions, with application of the average effective rate of taxation* corresponding to the full value of the assets). - The Bare Owner has a single acquisition, with a single accrual, albeit partly deferred in time.
EXTINCTION
- Time of extinction of usufruct: Death of the usufructuary.
- Applicable tax rule: the one in force at the time the ownership was dismembered (date of first death (inheritance) or date of gift).
- The bare owner must pay tax on the value attributed to the usufruct on its constitution and not on its extinction. This value will be reduced by applying the rest of the general reductions that apply, if they were not used in the liquidation of the acquisition of the bare ownership.
- The average effective rate of taxation* corresponding to the dismemberment of the estate must be applied.
*Effective average tax rate: This is based on a theoretical net tax base (BLT: total value of the assets = value of the usufruct + value of the bare ownership + value of the rest of the assets of the inheritance). The tax rate is applied to this BLT to obtain a theoretical tax liability (CTT) (CTT/BLT)*100=Average effective tax rate.
I.R.P.F.
SPANISH
TAX RESIDENTS
2| PERSONAL INCOME TAX
| NET BASE UP TO (€) |
TAX 1 (€) |
REMAINING NET BASE UP TO (€) |
RATE (%) |
|---|---|---|---|
| 0.00 | 0.00 | 12,450.00 | 9.50% |
| 12,450.00 | 1,182.75 | 7,750.00 | 12.00% |
| 20,200.00 | 2,112.75 | 15,000.00 | 15.00% |
| 35,200.00 | 4,362.75 | 24,800.00 | 18.50% |
| 60,000.00 | 8,950.75 | 240,000.00 | 22.50% |
| 300,000.00 | 62,950.75 | And above | 24.50% |
*In addition to this rate, the taxpayer’s scale of the Spanish Autonomous Community of Andalusia
| NET BASE (€) |
TAX 1 (€) |
REMAINING NET BASE (€) |
RATE (%) |
|---|---|---|---|
| From 0 to 12,450 | 0.00 | 12,450 | 9.00% |
| From 12,450 to 20.200 | 1,120.50 | 7,750 | 11.00% |
| From 20,200 to 35,200 | 1,975.00 | 15,000 | 13.50% |
| From 35,200 to 60,000 | 3,975.00 | 24,000 | 17.00% |
| From 60,000 to 300,000 | 8,195.00 | 240,000 | 21.00% |
| More than 300,000 | 58,595.00 | And Above | 22.50% |
| NET BASE (€) |
TAX 1 (€) |
REMAINING NET BASE (€) |
RATE (%) |
|---|---|---|---|
| From 0 to 12,450 | 0.00 | 12,450 | 9.50% |
| From 12,450 to 20,200 | 1,182.75 | 7,750 | 12.00% |
| From 20,200 to 35,200 | 2,107.75 | 15,000 | 15.00% |
| From 35,200 to 60,000 | 4,357.75 | 24,800 | 18.50% |
| From 60,000 to 300,000 | 8,957.75 | 240,000 | 22.50% |
| More than 300,000 | 62,967.75 | And above | 22.50% |
3| DIVIDENDS, INTEREST
| NET BASE (€) |
TAX 1 (€) |
REMAINING NET BASE | RATE (%) |
|---|---|---|---|
| From 0.00 to 6,000.00 | 0 | 6,000 | 19% |
| From 6,000.01 to 50,000.00 | 1,140 | 44,000 | 21% |
| From 50,000.01 to 200,000.00 | 10,380 | 150,000 | 23% |
| From 200,000.01 to 300,000.00 | 44,880 | 100,000 | 27% |
| More than | 71,880 | And above | 30% |
4| WEALTH TAX OF NATURAL PERSONS
| NET TAXABLE INCOME UP TO (€) |
TAX 1 (€) |
REMAINING TAXABLE INCOME UP TO (€) |
RATE (%) |
|---|---|---|---|
| 0 | 0.00 | 167,129.45 | 0.2% |
| 167,129.45 | 334.26 | 167,123.43 | 0.3% |
| 334,252.88 | 835.63 | 334,246.87 | 0.5% |
| 668,499.75 | 2,506.86 | 668,499.76 | 0.9% |
| 1,336,999.51 | 8,523.36 | 1,336,999.50 | 1.3% |
| 2,673,999.01 | 25,904.35 | 2,673,999.02 | 1.7% |
| 5,347,998.03 | 71,362.33 | 5,347,998.03 | 2.1% |
| 10,695,996.06 | 183,670.29 And | And above | 3.5% |
*The sum of the Personal Income Tax and Wealth Tax rates cannot exceed 60% of the sum of the net taxable Personal Income Tax, although with certain limits.
*In addition to this rate, the taxpayer’s scale of the Spanish Autonomous Community of habitual residence must be added, although there are several communities that do not have a rate in force.
For example, MADRID and ANDALUCIA have a 100% rebate on the amount of this tax and therefore it is not paid in these regions, provided the
temporary solidarity tax on large fortunes is in force, from 2023 onwards:
a) In MADRID, the 100% rebate will not be applicable while the Temporary Solidarity Tax on Large Fortunes is in force. Instead, a rebate
may be applied that is determined by the difference, if any, between the total gross amount of the tax, after application of the joint limit
established in article 31 of the Wealth Tax Law, and the total gross amount corresponding to the Temporary Solidarity Tax on Large
Fortunes, after application of the corresponding joint limit.
b) In ANDALUCIA, instead of the 100% rebate, taxpayers can opt to apply a rebate determined by the difference, if any, between the total
amount of the tax, after application of the joint limit established in the Wealth Tax Law, and, where applicable, the total amount that would
correspond to the temporary solidarity tax on large fortunes, after application of the corresponding joint limit.
MAIN EXEMPTIONS OR REDUCTIONS APPLICABLE:
- Main exemptions or reductions applicable: Main residence: exemption of up to 300,000 euros in value.
- Works of art: exemptions in some cases.
- Business assets of individual entrepreneurs.
- Shares in a family business, with various requirements and conditions.
- Assets assigned to protected assets of people with disabilities.
5| SOLIDARITY TAX ON LARGE FORTUNES
- New temporary tax complementary to the Wealth Tax.
- Taxes net wealth over 3,000,000 euros on 31 December of each year.
- Exempt minimum of 700,000 euros for residents in Spain.
| NET TAXABLE UP TO (€) |
TAX 1 (€) |
REMAINING NET TAXABLE UP TO (€) |
RATE (%) |
|---|---|---|---|
| 0.00 | 0.00 | 3,000,000.00 | 0.00 |
| 3,000,000.00 | 0.00 | 2,347,998.03 | 1.7 |
| 5,347,998.03 | 39,915.97 | 5,347,998.03 | 2.1 |
| 10,695,996.06 | 152,223.93 | and above | 3.5 |
6| TRANSFER OF ASSETS
| REAL ESTATE |
|
| MOVABLE PROPERTY |
|
| CREATION OF SECURITY RIGHTS |
|
LEASES:
- Tenant obliged to pay.
- Payment if signed before 18/12/2018.
- Housing contracts for permanent use between 19/12/2018 and 23/01/2019 are exempt.
- 100% rebate if annual income is less than €15,000.00 when not intended for the exercise of business activity between 24/01/2019 and 05/03/2019.
- Dwellings intended for permanent use are exempt but the tax must be paid except for the application of a 100% rebate.
SUBMISSION DEADLINE:
30 working days from the time the taxable act or contract is formalised.
| ACQUISITION OF PRINCIPAL RESIDENCE |
|
| ACQUISITION OF USED MOVABLE PROPERTY |
|
7| PROPERTY DIVISION
| CONSTITUTION | EXTINCTION |
|---|---|
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