17 Jan 2021

The publication of Law 11/2020 in Spain has introduced the following modifications for the year 2021:

INCOME TAX

A new tax bracket of 24,5% is added to general tax tables for Annual Income Tax, which will be applied to a taxable based income that exceeds € 300.000.

A new bracket is introduced for withholding tax applied to working income derived from employment or statutory relations and pensions, where a 47% withholding tax will be applied on taxable based income exceeding € 300.000.

A new bracket is introduced for tax on savings income, where a 26% tax is established on a taxable based income exceeding € 200.000 (13% state and 13% autonomous).

The reduction applied to income tax for private insurance policies that exclusively covers the risk of dependency severe or highly dependent, has been reduced to € 2.000 per year (before the limit was € 8.000 per year). The limit of € 5000 per year is maintained for those payments made by the employer.

The income and expenditure limits permitted for the modular tax system have been extended for 2021, for both income tax and VAT/IGIC.


WEALTH TAX

As from the 1st January 2021, the top tax bracket for wealth tax has been increased from 2,5% to 3,5% and the indefinite period for this tax to be applied has been re-established.


OTHER MEASURES

The legal rate of interest has been established at 3% until the 31st December 2021.

The level of interest for late payment (statutory rate) is 3,75% for 2021.

The minimum wage index (IPREM) for 2021 is increased by approx. 5% and is the following amounts are established:
Daily IPREM – 18,83€.
Monthly IPREM – 564,90€.
Annual IPREM – 6.778,80€.

The minimum interprofessional salary referred to in the Royal Decree Law 3/2004 where it has been substituted by the IPREM will be 7.908,60€ when referring to it as annual, unless it is clearly states that it excludes extraordinary payments, in which case it will be 6.778,80€.


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Information by E.B.F Consulting S.L. E.B.F Consulting has been providing tax and accounting services to expatriates in Europe since 1999. Office is based in Lanzarote, Spain. Visit www.ebfconsulting.com for more details. Copyright© E.B.F Consulting 2021 All Rights Reserved.