Spain - Other taxes and levies | KPMG | GLOBAL

Spain - Other taxes and levies

Spain - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in Spain? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance Paid by employer Paid by employee Total
Social security 29.90%* 6.35%** 36.25%
Total 29.90% 6.35% 36.25%

* Plus a percentage to cover labor accidents and illnesses.

** For indefinite contracts.

In principle, all employees working in Spain, regardless of their nationality, must be registered with the Spanish social security system and the employer must make the corresponding contribution for both employer and employee. These contributions depend on the category of each employee and cannot exceed certain limits.

Employer rate (plus a professional contingency rate depending on the company activities) is 29.9 percent plus a percentage to cover labor accidents and illness (percentage depends on the activities) and employee rate (indefinite contracts) is 6.35 percent.

Both Spanish and foreign social security contributions can be deducted from the compensation income, as long as they are directly related to work income subject to Spanish PIT and are compulsory.

The minimum and maximum social security bases vary depending on an employee’s category of employment and educational background. Please note that expatriates, according to international social security agreements and EU applicable regulations, may keep home-country social security contributions and regimes.

The current maximum monthly Social Security base is EUR 3,751.20. Any income exceeding that maximum base is not subject to both employee and employer contributions.

Gift, estate, wealth and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Spain?

Gift and inheritance tax

This tax is levied if one or more of the three events listed occur.

  • The acquisition of any type of goods, or rights, through an inheritance or legacy.
  • The acquisition by an individual of goods or rights as a gift or donation.
  • The amounts received by the beneficiaries of life insurance contracts when the contracting party is a different individual than the beneficiary.

The taxable base is normally the net value of the goods and rights in question.

The tax rates depend on the amount involved, the degree of family relationship between the donor and the donee and the previous net worth of the donee.

In certain regions such as Madrid, there are reductions available of up to 99 percent under certain conditions.

Wealth Tax

The Spanish Government reinstated Net Wealth Tax, but it is still to be determined whether or not it will apply for 2018 tax year

The general deduction is EUR 700.000. There is an additional exemption for the taxpayer’s habitual residence up to an amount of EUR 300.000.

The general deduction is also applicable to non-residents in Spain, who are taxed only on Spanish net wealth.

Real estate tax

Are there real estate taxes in Spain?

There is a local tax levied on Spanish property charged annually by the municipality where the property is registered.
The amount of the tax is calculated by reference to the cadastral value.

Sales/VAT tax

Are there sales and/or value-added taxes in Spain?

There are two main indirect taxes in Spain that could tax sales operations carried out within the Spanish Territory depending on the status of the individual/entity which performs said operations, as follows:

  • Spanish Value-Added Tax (IVA): companies/entrepreneurs/professionals
  • Spanish Transfer Tax (ITP-TPO): individuals

Unemployment tax

Are there unemployment taxes in Spain?

The amounts received under unemployment systems are considered as work income.

Other taxes

Are there additional taxes1 in Spain that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Information is not available.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the country’s fiscal or banking authorities?

Spanish tax resident individuals might be subject to the obligation to report assets and rights located outside of Spain to the Tax Authorities through Form 720.

The provisions establish the obligation of reporting the following assets and rights located outside of Spain to the Tax Authorities:

  • Accounts in which the individual is the titleholder, or in which he is representative, authorized person or beneficiary, or in which he has disposal powers.
  • Securities, rights, insurance and life or temporary annuities.
  • Real estate or rights on real estate.

There will be no reporting obligation for those assets or rights whose value (considered in aggregate for each group of assets listed above) is lower than Euros 50,000.

Furthermore, for reporting purposes when there are multiple owners of the assets or rights the value of these should not be prorated based on ownership and, in addition, specific valuation rules and the cases in which ownership is transferred or relinquished during the year must be carefully analyzed. The economic regime in which the taxpayer is married should also have to be considered for these purposes.

In those cases in which the individual filed this Form in a previous year, he/she could also have a filing requirement for a subsequent year when the aggregated value of the assets included in any of the above three groups had increased in an amount higher than Euros 20,000 or when the individual´s condition (owner, co-owner, titleholder or authorized) had changed or was extinguished during the year, before 31 December, with regard to any of the assets that had been reported.

The deadline for filing the 720 Form is from 1 January to 31 March of the year following that for which the information must be reported. The penalties applicable for incorrect, incomplete or late reporting are very severe.

Individuals taxed under the special regime for inboud assignees are excluded from the obligation of filing the 720 Form, but their spouses, if they are regarded as Spanish tax residents, might have a filing obligation if they exceed the above mentioned thresholds.

Footnote

1All additional tax information in this section is summarized by KPMG Abogados, S.L., the Spanish member firm of KPMG International, based on the Social Security (SS) General Law dated 20 June 1994, Royal Decree 2064/1995 dated 22 December 1995 that elaborated SS General Law; Royal Decree-Law 13/2011 dated 16 September 2011 that reinstates Net Wealth Tax; Inheritance and Gift (IG) Law dated 18 December 1987 and Royal Decree 1629/1991 that elaborated IG Law. 

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