Tax

Tax evasion used to be the normal thing in Spain. The last 15 years the taxes in Spain has increased dramatically but are still below the taxes in the rest of Europe.

Nowadays penalties are high for tax evasion and it has also been made more difficult to avoid paying. Other European nations now share information with the Spanish state to avoid tax evasion in Europe.

If you are a resident in Spain but get your income from your home country you should seek expert advise on how to best go about with your taxes. The tax system in Spain are divided in 3 parts: the central government, the autonomous regional governments and local municipalities. Government taxes are administered in Madrid by the Ministry of Economy and Taxation. There are also tax collection centres in each province.

If the state has not intended to collect a tax there is a 5 years limit. After 5 years the case can no longer be persecuted.

Income tax is payable for residents of income in Spain and outside Spain. The wealth tax is payable on capital assets like property. If you receive a gift or inherit this is also taxed.

The property tax (IBI) is a municipally tax and vary from area to area. The property tax is paid once a year during the summer months. In some areas the garbage tax is included in the property tax and in other areas it is paid apart.

If you sell your property there is also a tax on the profit you have made on it. There is also a tax paid on the increase in the value of the property. This tax is normally paid by the seller but it can be agreed that it will be paid by the buyer.

If you own a motorized vehicle there is also a annual tax for that.

If you own a company there are several taxes to be paid such as company tax: a percentage of profits, social security: payable for employees and the employer and the value added tax called IVA in Spain.