The Spanish income tax return: who has to file, and the thresholds that decide it

Who this applies to

The income tax return, declaración de la renta, is filed by Spanish tax residents for the calendar year. Whether you are one is a separate question with its own tests — days in Spain, economic interests, family — covered in our guide to tax residency. Non-residents with Spanish income deal with non-resident income tax instead, which works differently.

Every resident taxpayer is, in principle, obliged to file. Article 96 of the income tax act then exempts people whose income comes only from a limited set of sources and stays under set limits.

The thresholds

You do not have to file if your income comes only from these sources, individually or jointly: gross employment income up to €22,000 a year; gross income from savings and capital gains that were subject to withholding — bank interest, dividends, most fund redemptions — up to €1,600 a year in total; and imputed income from property other than your home, Treasury bills and certain public housing grants and aids, up to €1,000 a year in total.

And in no case do you have to file if your total income from work, capital and business activities plus capital gains is no more than €1,000 a year and your capital losses are under €500.

When the €22,000 becomes €15,876

The employment threshold drops to €15,876 in four situations. The most common is having more than one payer in the year — two employers, or an employer and the unemployment benefit. There is an exception: if everything you received from the second and later payers, ranked by amount, adds up to no more than €1,500, the €22,000 limit still applies.

The lower limit also applies if you receive maintenance from a former spouse other than for children, if your payer is not obliged to withhold tax, or if your employment income is subject to a fixed withholding rate.

The reason is withholding. With one employer, the tax withheld each month is calculated on your whole salary and is usually close to right. With two, each withholds as if it were your only payer, and the total is often too low — which is exactly what filing puts right.

When you must always file

Whatever you earned, you must file if you were registered as self-employed in the RETA, or as a self-employed worker in the seafarers' scheme, at any moment of the year. One month of self-employment in March means filing for the whole year.

You must also file if you are entitled to the deduction for international double taxation — which is how tax paid abroad on foreign income is credited — or if you made contributions to pension plans and similar schemes that reduce your taxable base, in the conditions set by regulation.

Why you might file when you do not have to

Not being obliged to file does not mean filing is pointless. If more tax was withheld from your salary than you owe, the only way to get it back is to file. The Tax Agency's own draft return shows the result before you submit it.

The law also protects people who are not obliged to file: public administrations cannot require a tax return in order to grant a subsidy or public benefit, or make it a condition in any way, when the person was not obliged to file one.

How and when

The forms, the way of filing and the dates are set each year by the Ministry of Finance. Filing is online, through the Tax Agency's electronic office, where the draft return, borrador, is prepared from the data the Agency already holds. You identify yourself with a digital certificate, Cl@ve or a reference number. Check the draft carefully: it only knows what employers, banks and registries have reported.