(Impuesto sobre la Renta de las Personas Físicas – IRPF)

Personal Income Tax in Spain (IRPF)

18 / May

The deadline for filing the Personal Income Tax Return 2021 (IRPF) in Spain is 30th of June next.

The first thing of importance when filing this tax return is to determine whether you are a tax resident in Spain. You will be considered tax resident for Personal Income Tax purposes when you have been habitually resident in Spain for more than 183 days.

Once this is clear it is necessary to check whether or not you are obliged to file a tax return. This depends on the income you obtained in the last tax year, with some exceptions for income from employment, income from movable capital and capital gains, among others.

Who are exempt?

  1. Those who do not exceed €1,000 gross annual income, regardless of its nature;
  2. Those who have suffered capital losses of less than €500;
  3. For those who have an income from work, the limit is €22,000 gross per year if this income comes from a single earner. Sometimes, if there are two earners, you are not obliged to file a declaration, as long as the cumulative income of both working people does not exceed €14,000 gross per year;
  4. Taxpayers who receive income from capital gains (interest from bank accounts, bonds, debentures, dividend from shares, capital gains obtained from the transfer of real estate securities, etc.) of less than €1,600 gross per year are also not obliged to file a tax return.

If you are not obliged to file a tax return because you have not reached the minimum income, it can still be interesting to find out whether it makes sense to do so.

In some cases, even though you are not obliged to file a tax return, it can still lead to a refund of income tax paid. The tax authorities have already deducted income tax from every euro that you have received in the past year from work, pension, shares, housing, etc. At the end of the year, all these amounts are added up, and if it turns out that the tax authorities have withheld too much from you, you are entitled to a refund!

There is also a possibility that you still have to pay tax (you owe money to the tax authorities), while you are not obliged to file a tax return because you have not reached the minimum income level. In that case, you do not file a tax return.

Lucia Guillén Molina