Income Tax — IRPF (Impuesto sobre la Renta de las Personas Físicas)

What Is IRPF?

The Impuesto sobre la Renta de las Personas Físicas (IRPF) is the personal income tax that applies to individuals who are tax resident in Spain. It taxes income from all sources worldwide — employment, self-employment, capital gains, rental income, and savings income — and is jointly administered by the Spanish central government (AEAT) and the regional governments (Comunidades Autónomas).

Non-residents do not pay IRPF; they pay IRNR (Non-Resident Income Tax) instead.

Who Is Tax Resident in Spain?

You become a Spanish tax resident — and therefore an IRPF taxpayer — if any of the following apply:

1. You spend more than 183 days in Spain during a calendar year.
2. Spain is the main base of your economic activities or interests.
3. Your spouse or minor children habitually reside in Spain (rebuttable presumption).

IRPF Rates

IRPF is progressive and split between a national tranche and a regional tranche. The combined rates below are approximate national averages; actual rates vary by region (Madrid is generally the lowest, Catalonia among the highest).

Savings income (dividends, interest, capital gains) is taxed at a separate, more favourable savings scale: 19–28%.

Special Regime: Beckham Law (Régimen de Impatriados)

Foreign nationals who become Spanish tax residents due to employment may qualify for the Beckham Law regime (Article 93 LIRPF). Under this regime, eligible individuals are taxed as non-residents for up to six years, applying a flat 24% rate on Spanish-source employment income up to EUR 600,000 (47% above that threshold) and exempting most foreign-source income from Spanish tax.

This is a major planning tool for highly paid executives and remote workers relocating to Spain. Eligibility requires not having been resident in Spain in the prior ten years.

Filing Obligations

IRPF returns are filed annually (April–June for the previous tax year) using Modelo 100. Employed individuals with a single employer and income below EUR 22,000 may not be required to file, but self-employed individuals (autónomos) and anyone with income from multiple sources generally must.

Quarterly advance payments are required for autónomos via Modelo 130 (direct estimation) or Modelo 131 (objective estimation).

Key Differences vs Other Countries

• Regional variation: Unlike the UK or Germany, where personal income tax is largely uniform nationally, Spain’s IRPF has a significant regional component. Madrid’s low regional rates make it one of the most tax-efficient regions for high earners.
• Worldwide taxation: Once resident, you are taxed on global income — but Spain’s network of double tax treaties typically prevents double taxation.
• Wealth tax: Spain also levies a wealth tax (Impuesto sobre el Patrimonio) on net assets above certain thresholds, which varies significantly by region.

How BMC Can Help

Our personal tax advisors specialise in the tax position of expats, inbound assignees, and foreign investors. We manage IRPF compliance from initial residency analysis through annual return preparation, and advise on regimes such as the Beckham Law and the non-habitual resident planning strategies available in Spain.