Spain

Social security contributions

Under the general regime, social security contributions are payable on wages and salaries. In Spain, the minimum monthly contribution base for 2026 is EUR 1,381.20 and the maximum is EUR 5,101.20.

The general contribution rates are 6.5% for employees, subject to the type of contract, and 30.65% for employers, plus a variable rate for occupational accidents (e.g., 1.50% for office work).

Certain individuals may be exempt from Spanish social security contributions, provided that all of the following conditions are met: (i) there is a social security agreement in force between Spain and the individual’s home country that permits such an exemption; (ii) the employment relationship with the home-country employer is maintained and the individual continues to contribute to the home-country social security system; and (iii) the individual’s stay in Spain is limited to a few years (typically between one and five years, depending on the applicable bilateral agreement). To qualify, nationals of EU Member States must obtain a certificate evidencing continued coverage in their home country, and nationals of other countries must obtain documentation from their home-country social security authorities certifying coverage.

The contribution framework for self‑employed individuals has also been modified, establishing a system under which contributions are determined by the income obtained. The system comprises 15 income brackets, with placement varying according to the self‑employed individual’s income. Within the applicable bracket, the individual may choose the level of contributions to pay. The minimum contribution for the lowest bracket is EUR 653.59, while the maximum contribution for the highest bracket is EUR 5,101.20. Social security benefits depend on the contributions paid by the self‑employed individual, with a general rate of 31.4% applied to a monthly contribution base elected by the self‑employed individual.

An additional solidarity contribution entered into force on January 1, 2025, for employees whose remuneration exceeds the established maximum contribution base. This contribution applies solely to the portion of monthly salary exceeding the maximum base and is calculated using a progressive tiered system that determines the applicable percentage based on the excess salary. The first tier covers the portion between the maximum base and up to 10% above it, subject to a 1.15% rate in 2026. The second tier covers the portion between 10% and 50% above the maximum base, subject to a 1.25% rate in 2026. The third tier applies to the portion exceeding 50% above the maximum base, subject to a 1.46% rate in 2026. These rates will increase annually until 2045 by 0.23 percentage points in the first tier, 0.25 points in the second tier, and 0.29 percentage points in the third tier. The solidarity contribution follows the allocation scheme applicable to contributions for common contingencies, with the majority borne by the employer: 83.39% by the employer and 16.61% by the employee. It does not affect employees whose income remains below the maximum contribution base, nor does it apply to self‑employed individuals, regardless of income.

Value-added tax (VAT)

Spanish VAT is payable on supplies of goods and services carried out in Spanish VAT territory and on imports/intra-EU acquisitions of goods and services. There are three rates for the different types of goods and services, which are as follows:

• Standard rate of 21% for regular supplies of goods and services.
• Reduced rate of 10% for necessities (e.g. food and agricultural products not included in the ‘super reduced’ 4% rate, dwellings, other qualifying services). Live cultural events and cinema tickets are taxed at the reduced rate of 10% too.
• Super reduced rate of 4% for basic necessities other than those classified under the reduced rate (e.g. bread, milk, books, medicine).

Temporary reductions in rates can apply for specific reasons (e.g. for sanitary reasons, for economic reasons). On the other hand, certain activities are VAT-exempt, including, among others, financial and/or insurance activities, medical activities, and educational services. These activities do not grant the right to deduct input VAT.

Note that intra-EU supplies of goods and export of goods provided are VAT-exempt and do grant the right to deduct input VAT if certain requirements are met.

In the Canary Islands, a specific tax is applied instead of VAT, called the Canary Island General Indirect Tax (IGIC). The IGIC is similar to VAT although there are some differences, mainly in relation to the applicable rates that are normally lower than VAT. Guidelines given by the Spanish mainland authorities are normally also followed by the authorities in the Canary Islands.

In Ceuta and Melilla, a specific sales tax called IPSI is applied. IPSI has rules that are different from VAT, and its application is generally confined to certain activities/taxable events.

Wealth tax

Wealth tax is levied on Spanish tax residents' worldwide net assets and on Spanish non-residents' goods and rights that are located, may be exercised, or should be complied with in Spain.

The tax is levied on the assets held by the taxpayer as of 31 December (accrual date).

Law 38/2022, of 27 December 2022, for the establishment of temporary energy taxes and taxes on credit institutions and financial credit establishments, which creates the temporary solidarity tax on large fortunes and modifies certain tax regulations has extended the individuals to which wealth tax applies.

For tax period 2022 onwards, shareholdings when at least 50% of the total assets of the company consists, directly or indirectly, of Spanish real estate assets are subject to wealth tax. For these purposes, the value of the real estate assets would not be the book value reported for accounting purposes by the company, but the value arising from specific wealth tax rules for real estate assets. This value would be the higher of the acquisition value, the cadastral value, and any other value assessed by the tax authorities for tax purposes.

The following tax relief is applicable for this tax:

• A minimum tax-exempt amount. All autonomous communities of Spain can establish their own minimum tax-exempt amount.
• If an autonomous community does not establish its own minimum tax-exempt amount, the amount established by Spanish law (EUR 700,000) will apply.
• In the case of non-tax residents, they have the option to apply either the state regulations or the autonomous community regulations (including the minimum tax-exempt, tax reliefs, and tax rates) governed by the territory in which the highest value of their assets and rights located in Spain is found.
• Habitual dwellings are tax exempt up to EUR 300,000.
• Interests in family companies or business assets may also benefit from a tax exemption if certain requirements are met.

The tax liability is calculated by applying the progressive rates established by the autonomous communities in Spain to net taxable income (i.e. after applying tax relief). If the corresponding autonomous community does not establish its own scale of progressive rates, the following scale will apply:

Autonomous communities may establish their own tax relief for wealth tax or an abatement of the tax. Several autonomous communities have already stated that they intend to establish a full tax abatement for wealth tax.

Taxpayers are required to file wealth tax returns if they have a tax liability or their wealth (exempt or not) exceeds EUR 2 million.

Solidarity tax on large fortunes

Law 38/2022, of 27 December 2022, for the establishment of temporary energy taxes and taxes on credit institutions and financial credit establishments, creates the temporary solidarity tax on large fortunes.

This was a temporary tax that, in principle, was established only for the tax period 2022 and 2023, but finally it has become permanent, and is applicable to residents whose net asset value on 31 December is equal to or higher than EUR 3 million.

The tax base is determined by the application of the wealth tax regulations. The same occurs with the exemptions except for the EUR 700,000 exemption, which applies to both tax residents and non-tax residents in Spain.

The tax liability is calculated by applying the following progressive rate:

This tax is complementary to wealth tax, so the wealth tax debt paid in relation to the same tax period should be deducted from the solidarity tax amount.

Gift and inheritance tax

Spanish gift and inheritance tax is levied on goods and rights acquired by Spanish tax residents by inheritance, legacy or other type of succession, or by donation or other inter vivos legal transfers with no charge.

Spanish gift and inheritance tax is also levied on goods and rights acquired by Spanish non-residents in the manners stated above, whatever their nature, which are located, may be exercised or should be complied with in Spain. However, if a DTT has been signed between Spain and the non-resident's country of residence, taxation will depend on the DTT applicable.

The tax is levied on the assets' net acquisition value.

The tax liability will depend on different matters such as the relationship between the taxpayer and the donor/deceased, or the taxpayer's previous wealth.

Spain's autonomous communities have extensive powers that enable them to pass their own laws regulating different aspects of this tax, and many autonomous communities have established significant tax relief.

Spanish gift and inheritance tax regulations have been reformed with effect from 1 January 2015 as a result of a judgement given by the EU Court of Justice on 3 September 2014, which established that these regulations are an obstacle to free movement of persons and capital and breach the Treaty on the Functioning of the European Union by allowing discrimination in the tax treatment of gifts and inheritances between resident and non-resident successors and donees and between gifts and similar disposals of property located in and outside Spain. The reform introduces several rules to equate the tax treatment for the discriminating situations listed by the EU Court of Justice.

The general tax rates are as follows (although they can be modified by autonomous communities):

Property tax

Property tax is a local tax levied on the owners of properties located in Spain.

The tax liability is a percentage of the rateable value of the property depending on the type of the property (i.e. rural or urban) and the municipality where it is located.

Rates can be fixed by each municipality, with a minimum and a maximum that can be increased slightly if certain requirements are met:

Tax on the increase of urban land value

When urban properties are transferred, a local tax is levied on the theoretical increase of the property's value (tax on the increase of urban land value). Taxable income for the calculation of the tax takes into account the rateable value of the property and the duration of ownership.

On 11 May 2017, the Spanish Constitutional Court stated that regulations laid down by law that tax where there is no increase in value of the urban property transferred are unconstitutional and, consequently, null and void. Consequently, taxpayers that have paid incorrect amounts of tax, where there was no increase in the value of the property, may claim a refund of the tax paid within the statute-of-limitation period by means of a special procedure that commences with the filing of a request with the tax authorities.

Later, on 9 November 2021, Royal Decree Law 26/2021, of 8 November, was published in the Official State Gazette, introducing a new case of non-taxation for these cases in which there is no increase in value in the difference between the values of said land on the dates of transfer and acquisition.

The tax is paid by the transferor of the property (provided that the transfer is not a donation).

According to Royal Decree‑Law 16/2023 of December 23, 2025, the coefficients to be applied to the value of the land at the time of accrual have been amended as follows:

Exit tax

Income not yet allocated 

If PIT payers cease to be PIT payers in Spain as they change their place of residence for tax purposes, they should declare any income not yet allocated in their last PIT return or file a supplementary tax return to declare this income (tax return filed without applying penalties, late payment interest, or surcharges).

When the taxpayer's place of residence is changed to another EU member state, the taxpayer may opt to include any income not yet allocated in one's last PIT return or to file a supplementary tax return to declare such income when each item of income to be declared is obtained (tax return filed without applying penalties, late payment interest, or surcharges).

Latent capital gains on qualifying shares or interests in Collective Investment Institutions (CIIs)

If taxpayers resident in Spain change their tax residence to another country during at least ten of the 15 tax periods prior to the last tax period for which a PIT return should be filed, in general, the taxation of latent capital gains on shares or interests in companies or CIIs classified according to their value (EUR 4 million) or the interest percentage (25% for EUR 1 million and over) is brought forward.

Payment may be deferred in the event of temporary relocation for work reasons or if the relocation is to a country or territory with which Spain has signed a DTT with an exchange-of-information clause. If, during the following five years (which may be extended for a further five years for cases of relocation for work reasons), taxpayer status is acquired again without any transfer of the shares or interests, the deferred debt and any accrued interest shall be waived by the tax authorities. In this case, the taxpayer may ask the tax authorities to rectify the self-assessment and claim a refund of tax paid.

Special rules are established for changes of tax residence to another EU member state or EEA country.

Special tax on gaming income

A special 20% tax is levied on the following prizes:

• Prizes received from lotteries and games organised by the State Lottery and Gaming Corporation and regional bodies or entities, draws organised by the Spanish Red Cross, and the types of games that the Spanish Organisation for the Blind is authorised to conduct.
• Income from lotteries, games, and draws organised by public bodies or entities that carry on social or welfare non-profit-making activities in other member states of the European Union and have the same business aims as the bodies or entities indicated above.

The tax-exempt net amount for lotteries and games organised from 2020 onwards is EUR 40,000.

The tax base for this special tax is the amount of the prize that exceeds the tax-exempt amount. The tax rate is 20%, which is applied on the tax base minus any withholdings and advance payments applied.