2010 Tax changes in Spain
21 February 2010
This content is archived.
For more up-to-date information, please see Guides Global
This content is archived. For more up-to-date information, please see Guides Global
In Spain, tax rates and rules change every January, but – this year – there are number of ‘special’ changes proposed.
First, the main points of the normal stuff!
Personal income tax
- Inbound expatriate workers arriving after 1 Jan 2010 can only choose to be treated as non-resident taxpayers (often hugely beneficial) if their pay package is worth no more than €600,000.
- Taxation of dividends, interest and certain capital gains on the sale of assets increased from 18% flat to 19% on the first €6,000 and then 21%.
Corporate income tax
- Reduction in the tax rate for small and medium-sized companies to 20%, subject to certain requirements.
From 1 July 2010 VAT the normal rate will be increased from 16% to 18% and reduced rate from from 7% to 8%.
A few other important announcements of intended tax changes:
- The corporate income tax credit rate for technological innovation activities would be increased from 8% to 12%, and its ceiling would go up from 50% to 60% of the reduced gross tax payable in certain cases
- Tax credits for acquisition or renting of permanent dwellings would also be phased out for taxpayers with taxable bases over €24,107.20 ($34,983).
- Income received by EU pension funds which are considered the equivalent of Spanish pension funds will be treated the same as Spanish funds – basically, exempt from taxation in Spain.
- Spanish real estate trusts (SOCIMIs) will be taxed at a 19%
- EU-residents deriving income from Spain will be taxed on a net basis, in the same way as Spanish residents, rather than on gross taxable basis.