On 6 April, the deadline for filing your tax returns opened up. Tax residents in Spain have until 30 June to complete this process with the Tax Agency, as paying your taxes and declaring your assets and earnings is obligatory for everyone. If you moved to Spain recently or are thinking about starting a new life here, then read this article where we tell you why it’s important to know about personal income tax – known as IRPF.

This article is a quick guide where you can find out what you’re meant to do and how IRPF affects you when filing your taxes. For more detailed information, we recommend visiting the Tax Agency portal for everything about IRPF and 2021 tax returns.

I’m a foreign national, do I have to file taxes?

The obligation to pay personal income tax, and therefore to file an income tax return, depends on whether you are considered a tax resident in Spain, regardless of your nationality. To determine whether you are a tax resident in Spain, the tax authorities take into account whether you meet any of these requirements (art. 9 Law IRPF):

  • Staying in Spain for more than 183 days during the calendar year unless the taxpayer proves their tax residence in another country.
  • The centre of economic interests must be in Spain.
  • A person is presumed to be a habitual resident in Spain if their spouse (not legally separated) and minor children reside here.

To sum up, the tax residence of a natural person is not only determined on the basis of the first criterion of residence (more than 183 days), but the taxpayer may also be considered tax resident in Spain if they base, directly or indirectly, the main core their activities or economic interests in Spain.

Does it affect my home in Spain?

Have you recently bought a property in Spain and want to know if you can benefit from a tax deduction when filing your tax returns?

You should know that a new feature this year in this area are deductions on works to improve the energy efficiency of dwellings, among which the following stand out:

  • 20% deduction on the amounts paid for works that reduce the demand for heating and cooling.
  • 40% deduction on the amounts paid for works that reduce the consumption of non-renewable primary energy.
  • 60% deduction on the amounts paid for energy renovation works in buildings.

Deductions based on regions in Spain

If you are a tax resident in Spain and you own or rent a property in our country, you should know that there are a series of deductions that you may be able to benefit from when making your 2021 tax return. This will depend not only on your personal situation, but also on where your property is located, as each Autonomous Community offers different tax benefits. In the Valencian Community, where all our developments are located, a series of deductions are applied for the purchase of a primary residence for people under 35 years of age or for taxpayers with two or more descendants. The long list of these deductions can be seen by visiting this link for the Spanish Tax Agency. As each situation is different, we encourage you to find out more about your specific case before making your final tax return, and to consult an advisor or manager if necessary.

We hope this article has helped you to dispel some of the doubts you may have about this annual procedure. Don’t forget to follow our Facebook and Instagram activity and our upcoming blog posts to stay up to date.