Taxes in SpainAll cititizens have their rights and their duties, and among these last ones, pagar los impuestos (paying taxes) is probably the most hated. The last trimester of this year is about to start and it’s time to cuadrar (balance) la contabilidad (the accounting) of companies and freelancers.

Either you are a resident is Spain or you have your own business in this country, you should be familiar with the Spanish tax system. Today, we’ll provide you with information about our most known taxes.

The Spanish agency in charge of taxes is la Agencia Estatal de Administración Tributaria (AEAT), commonly known as Hacienda. According to them, we should start classifying los impuestos in two types: directos and indirectos:

Los impuestos directos

Gravan las rentas y el patrimonio de los contribuyentes (they are applied to taxpayer’s incomes earned and assets). Some of the most important are:

  • Impuesto sobre la Renta de las Personas Físicas (IRPF): this tax applies to la renta de las personas físicas (natural person’s incomes) earned by their job, economical activities or investment profits. Personal and family situations affect to the calculation.
  • Impuesto de Sociedades (IS): It’s actually similar to the previous one, but it’s not applied to a natural person but to el beneficio de las empresas (companies’ profit).
  • Impuesto de Sucesiones y donaciones (ISD): this controversial tax is no longer active is some regions of Spain. If a person get an inheritance or a donation, should declare it as an income and pay the pertinent percentage to the State.

Los impuestos indirectos

Gravan el consumo de bienes y servicios y las transmisiones de bienes y derechos en general (they tax the consume of goods and services and the transfer of goods and rights in general).

  • Impuesto sobre el Valor Añadido (IVA): the most famous and, maybe, infamous one: the VAT. It taxes the transfer of goods and services between corporations and people.
  • Impuesto de Transmisiones Patrimoniales (ITP): the property transfer tax applies to the trade of lands, real estate, vehicles…
  • Impuestos especiales: unfortunately there are many of them. They can be applied to products such as alcoholic beverages, tobacco, hydrocarbon, electricity, vehicle registrations…
  • Impuestos locales: besides all of these taxes we must pay to the State, we also need to keep in mind local ones. For example: Impuesto sobre Bienes Inmuebles (IBI), applied to estate owners, or Impuesto sobre Vehículos de Tracción Mecánica, which taxes a vehicle’s owner.

In conclusion, if you are planning to live in Spain or open a business here, you should know all the vocabulary related to taxes. On we want to help you. Take a look at our Spanish for Business Course and try a free trial lesson here. By the way, IVA (VAT) tax is not applied to Spanish lessons in our country. What are you waiting for?