As the year draws to a close, it’s a great time to review your personal and financial situation with one clear goal in mind: optimising your upcoming Spanish tax return. We’ve put together this summary to highlight the key points to consider before 31 December.
- Are You Required to File a Tax Return?
• Employees with multiple employers: You must file if your income exceeds €15,876/year.
• Self-employed (RETA): If you were registered at any time during the year, you’re required to file—regardless of your income.
• Unemployment benefits: Since 2024, recipients of contributory benefits must file an IRPF return.
- Tax-Exempt Income: What Doesn’t Get Taxed (and How to Benefit)
• Meal vouchers or restaurant cards: Tax-free up to €11/day, including remote work.
• Transport cards: Tax-free up to €1,500/year for commuting purposes.
• Company health insurance: Exempt up to €500 per insured person.
• Foreign-earned income: Exempt up to €60,100, subject to conditions.
• Severance, mileage allowances, and exemptions for seniors also apply in certain cases.
- Employment Income: How to Reduce Your Tax Bill
• Pension plan withdrawals: Choosing the right time and method can significantly reduce your tax burden.
• Low income reductions: If your work income is modest, you could apply deductions up to €5,565.
• Remote work: In-kind benefits such as meal vouchers still enjoy tax exemptions.
- Housing and Rentals: Key Insights
• Rental income: Expenses like repairs, interest, and community fees are deductible.
• Reinvestment in main residence: Capital gains can be exempt if reinvested.
• Long-term savings plans: Tax-free if held for 5+ years and within annual contribution limits.
- Capital Gains and Losses
• Losses can offset gains in the same or following 4 tax years.
• Some grants, court reimbursements, or donations may trigger taxable gains.
- Tax Base Reductions and Allowable Contributions
• Pension contributions: General limit of €1,500/year, increased to €8,500 with employer contributions.
• Dependency and disability plans: Offer substantial tax advantages.
• Protected assets for dependents with disabilities: Contributions may be deductible.
- Self-Employed & Creative Professions
• Accelerated depreciation: For electric vehicles and charging infrastructure used in your business.
• Irregular or exceptional income: Special deductions available.
• Module-based system (estimación objetiva): Specific thresholds and rules remain in place.
- Tax Deductions to Keep in Mind
• Energy-efficiency home renovations: Deductions up to 60%, depending on the type of work and energy savings.
• Rental of primary residence: Regional deductions may apply based on income and age.
• Other deductions: Large families, charitable donations, start-up investments, relocation, childcare, electric vehicles, and charging point installations.
Final Notes
Getting organised before the year ends can make all the difference in your next tax return. We’ll continue to share relevant, clear updates like this so you feel fully prepared when April comes around.