Spain

Habitual residence tax credit

The tax credit for investments in habitual dwellings is eliminated as of 2013. This tax credit was approximately 15% (depending on the autonomous community) of the amounts paid during the corresponding tax year for the acquisition or restoration of properties that were or would be the taxpayer’s habitual residence. A transitory regime was established in accordance with which the following taxpayers continued to qualify for the tax credit:

• Taxpayers who bought their habitual dwelling prior to 1 January 2013 or who had paid amounts prior to that date for its construction.
• Taxpayers who had paid amounts prior to 1 January 2013 for refurbishment work on or the extension of the habitual dwelling, provided that the work was completed by 1 January 2017.
• Taxpayers who had paid amounts prior to 1 January 2013 for work and installations to adapt the habitual dwelling of disabled persons, provided that the work or installations was completed by 1 January 2017.

The taxpayer could apply this tax credit for amounts paid in a tax period to acquire or construct property and accrued before 1 January 2013, unless Section 68.1.2. of the Spanish PIT Act in force on 31 December 2012 is applicable. This regulation refers to cases where a habitual dwelling has been acquired and the tax credit has previously been applied for the acquisition of other habitual dwellings.

For taxpayers qualifying for the transitory regime, the habitual residence tax credit is applied in accordance with the law in force on 31 December 2012.

Tax credits applicable to PIT payers who carry on business activities

PIT payers who carry on business activities can apply any tax credits that may be applied by CIT payers for the promotion of certain activities, except for the tax credit for research and development (R&D) and technological innovation, and can even obtain a tax refund for these activities.

See CIT relief in the Tax credits and incentives section of the Corporate tax summary for information on tax credits established for CIT payers.

Tax relief for investments in shares in newly or recently created companies, and tax exemption for reinvestments of these shares

• A tax relief is envisaged in Spain for amounts paid during the tax period to subscribe shares in newly or recently created companies that comply with certain requirements. The tax relief, which is applied on the part of the PIT liability corresponding to the state, is a 50% tax credit. The tax base for the tax relief is the acquisition value of the shares, up to an annual limit of EUR 100,000.
• Capital gains generated from disposals of shares with respect to which the taxpayer has applied the tax relief referred to above will be exempt from PIT if the total amount obtained from the disposal is reinvested in the acquisition of shares in newly or recently created companies, provided that certain requirements are met.

When taxpayers dispose of shares of newly or recently created companies and opt to apply the tax exemption for reinvestments referred to above, only the part of the reinvestment that exceeds the total amount obtained from the disposal will be the tax relief base for the new shares.

Tax credit for dues and contributions to political parties

A tax credit is established for dues and contributions to political parties. The tax credit is 20% of the dues or contributions paid, up to EUR 600 in the tax credit base.

Tax credit for large families and dependent relatives in an ascending or descending line

Taxpayers who work outside the home and have dependent relatives in an ascending or descending line or who form part of a large family can apply a EUR 1,200 tax credit for each of these situations. This tax credit is compatible with the current tax credit for maternity.

The tax credit can be increased by up to EUR 600 for each child in a large family that exceeds the minimum number to be a large family.

Temporary tax credits for energy efficiency improvement works in dwellings

Temporary tax credits for works to improve the energy efficiency of dwellings are available for PIT payers for amounts invested in refurbishment works that contribute to achieving certain improvements in the energy efficiency of the usual dwelling or dwelling rented for use as a dwelling in accordance with the legislation on urban leases, so that their primary purpose is to meet the tenant's permanent housing needs, and in residential buildings, accredited by means of an energy efficiency certificate.

Charitable donations

Tax credits may be applied for donations to non-profit organisations that comply with certain requirements. These tax credits range from 30% of the donation to the following scale, depending, mainly, on the organisation receiving the donation:

The base for this tax relief may not exceed 10% of the taxpayer’s net PIT taxable income, except for donations to listed priority sponsorship activities where the limit is 15% of the taxpayer’s net PIT taxable income.

From 1 January 2024, the deduction is increased to 80% for an amount up to EUR 150 and 45% for the excess if the donation is made to the same organisation and for the same or a higher amount than the previous tax year. In other situations, the excess will be deductible at a rate of 40%.

The new regulation also indicates that when donations are made to legally recognised foundations that report to a board of trustees (protectorado) and associations declared of public interest not included in the scheme provided in Law 49/2002, the deduction may amount to 10%.

Tax credit for lease of main residence

The tax credit for lease of main residence has been eliminated with effect from 2015. A transitory regime is established for taxpayers who have signed a lease contract and paid rent before 1 January 2015, provided that they were entitled to apply this tax credit for the same main residence during a previous tax period.