Complete Guide to Spanish IRPF

IRPF stands for Impuesto sobre la Renta de las Personas Físicas — the personal income tax system in Spain. It's a progressive tax, meaning the tax rate increases as your income increases.

If you earn income in Spain (employment, self-employment, rental income, investments), you must pay IRPF unless exempt (e.g., non-resident aliens with no Spanish-source income).

State IRPF brackets for 2025:

• €0–€21,000: 19%
• €21,001–€35,200: 24%
• €35,201–€60,000: 30%
• €60,001–€300,000: 37%
• €300,001–€600,000: 45%
• €600,001+: 47%

Plus regional taxes: Autonomous communities (Madrid, Catalonia, etc.) add 0–14% on top of state rates. Madrid is typically lowest; Catalonia highest.

Personal minimum allowance (2025): €5,550

This is deducted from your taxable income before brackets apply. If your income is below this, you owe no IRPF (though you may still need to file).

Common deductions:

• Mortgage interest (first €9,400/year)
• Rental property expenses (repairs, maintenance, property tax)
• Investment losses (can offset gains)
• Pension contributions (up to €2,000/year for most people)
• Self-employed business expenses (equipment, software, office)

Step 1: Calculate gross income (salary, self-employment, rental, investments)

Step 2: Subtract social security contributions (employee: 6.35%, self-employed: 15–28% depending on income tier)

Step 3: Subtract personal allowance (€5,550)

Step 4: Apply IRPF brackets to remaining taxable income

Step 5: Subtract tax credits (if any: dependent children, training costs, home energy efficiency, etc.)

Result: Your IRPF owed

Use the Net Salary Calculator to see this applied to your situation.

Autónomos pay IRPF on net profit after social security contributions (RETA):

Monthly RETA: €200–€670 (varies by income tier; set yearly)

IRPF: Applied to (annual net revenue − RETA contributions − personal allowance)

Autónomos also file quarterly VAT (IVA) and complete annual tax returns (declaración de la renta).

See the Autónomo Cost Calculator for detailed breakdown.

Annual tax return: Declaración de la Renta filed April–June (some deadlines to June 30).

Who must file:

• Employees earning more than €22,000/year (or two employers)
• Self-employed (autónomos) earning any amount
• Rental income more than €1,000/year
• Investment income more than €1,600/year
• Tax residents with foreign income

Where to file: Online at Agencia Tributaria (www.agenciatributaria.es) or via a gestor (tax adviser, €200–€600/year).

1. Contribute to pensions: Up to €2,000/year deductible (more if self-employed). Reduces taxable income.

2. Claim all deductions: Mortgage interest, home office (self-employed), business expenses, professional fees.

3. Use investment losses: Offset capital gains with losses from failed investments.

4. Optimize business structure: As autónomo income grows (€50k+), switching to a limited company (SL) can save taxes.

5. Beckham Law (for expats): Non-residents working in Spain can opt for 24% flat rate on first €600k (vs. 45% bracket) for first 6 years. Consult a tax adviser.

6. Keep receipts: All expenses must be documented. Missing receipts = disallowed deductions.

• Not filing if you think you owe nothing: Always file to protect yourself. Failure to file has penalties.
• Underreporting cash income: Spain uses data matching (employer, bank, customers). Undeclared cash is risky.
• Forgetting foreign income: Tax residents must declare worldwide income, including from other countries.
• Missing quarterly filings as autónomo: Quarterly VAT (IVA) is mandatory if you invoice. Late filings have penalties.
• Not keeping receipts: 5-year statute of limitations; Hacienda can audit and disallow unsupported deductions.

Some autonomous communities offer lower rates or additional deductions:

• Madrid: Lowest regional rates (~1–14% regional tax)
• Catalonia: Highest regional rates (~10–14% regional tax)
• Andalusia: Competitive rates; rental property deductions generous
• Basque Country: Separate tax system (can be favorable for businesses)

If you're flexible on location, Madrid or Andalusia offer tax advantages. Consult a local gestor.

• Agencia Tributaria: Official Spanish tax agency
• Gestor: Hire a local tax adviser (€200–€600/year) to handle filings and deductions
• Spain Expat Hub calculators: Net Salary, Autónomo Cost