Tax Rates in Spain for Expats 2025
Complete guide to income tax, corporate tax, VAT, and special regimes
TL;DR
- Income tax: 19%-47% (state + regional combined; Catalonia reaches 50%)
- Corporate tax: 25% standard; 23% for SMEs; 15% for new companies (first 2 years)
- VAT: 21% standard, 10% reduced, 4% super-reduced
- Beckham Law: 24% flat rate on Spanish-source income up to 600,000 EUR for 6 years (new residents)
- Capital gains: 19%-28% depending on amount
- Social security: 6.47% employee, 29.9% employer
- Key advantage: Beckham Law is the most accessible preferential regime in Western Europe – available to any qualifying employee, entrepreneur, or highly skilled worker
Key Rates Overview
| Tax Type | Rate | Notes |
|---|---|---|
| Personal Income Tax (top) | 47% | State rate; regions add to this |
| Corporate Tax (standard) | 25% | SMEs with <1M EUR turnover pay 23% |
| VAT (standard) | 21% | 10% reduced, 4% super-reduced available |
| Capital Gains Tax (max) | 28% | Progressive from 19% to 28% |
| Beckham Law (flat) | 24% | 6-year regime for qualifying residents |
| Social Security (employee) | 6.47% | General contribution rate |
Personal Income Tax
Spain uses a progressive tax system. The rates below combine state taxes and average regional contributions. Regional variation is significant – Madrid has lower rates than Catalonia, which reaches 50% at the top bracket.
Tax Brackets (State + Average Regional Rates Combined)
Capital Gains Tax
| Gain Amount (EUR) | Rate |
|---|---|
| 0 – 6,000 | 19% |
| 6,000 – 50,000 | 21% |
| 50,000 – 200,000 | 23% |
| 200,000 – 300,000 | 27% |
| Above 300,000 | 28% |
Corporate Income Tax
Standard Rates
- 25% – Standard corporate tax rate
- 23% – SMEs with annual turnover under 1 million EUR
- 15% – New companies during first 2 years with positive profit (requirement: incorporation after December 31, 2022)
The reduced rates for new companies and SMEs provide meaningful relief for growing businesses. Many startups and small enterprises benefit from the 23% rate, reducing the burden compared to larger corporations.
VAT (Value Added Tax)
| Category | Rate | Examples |
|---|---|---|
| Standard rate | 21% | Most goods and services |
| Reduced rate | 10% | Food, transport, hotels, restaurants |
| Super-reduced rate | 4% | Basic food, books, medicines, medical devices |
Spain’s VAT system aligns with EU standards. The reduced rates for essentials (food, medicine, books) are consumer-friendly, while the standard 21% applies to most business services.
Social Security Contributions
Employees
- 6.47% – General employee contribution (mandatory)
- Includes health insurance, pension, unemployment, and disability coverage
- Deductible from personal income tax liability
Employers
- 29.9% – General employer contribution (on gross salary)
- Includes social security, unemployment, and occupational accident insurance
- Varies slightly by industry and employee status
Special Regime: Beckham Law (SEPI Regime)
What It Is
The Beckham Law, officially the SEPI (Sociedad Estatal de Participaciones Industriales) regime, offers a flat 24% tax rate on Spanish-source employment income for qualifying new residents. This is one of Europe’s most accessible preferential tax regimes – despite the name, it is not limited to footballers.
Key Features
- Flat rate: 24% on Spanish-source income up to 600,000 EUR annually
- Duration: 6 years from first Spanish tax residency
- Eligibility: Employees, entrepreneurs, and highly qualified professionals who are new to Spain
- Income cap: Applies to the first 600,000 EUR of Spanish-source income
- Employment type: Applies to employment income (not passive income like dividends)
Who Qualifies
- Employees transferred to Spain or hired by Spanish companies
- Self-employed professionals and entrepreneurs starting operations in Spain
- Highly skilled professionals with specialized expertise
- Must not have been a Spanish tax resident in the 10 prior years
Key Insight
Spain’s Beckham Law is the most accessible preferential regime in Western Europe. Unlike similar regimes in other countries, it does not require being a major executive or celebrity – any qualifying employee or entrepreneur moving to Spain for work can apply. The 24% flat rate is significantly lower than standard income tax (which peaks at 47%), making Spain an attractive choice for high-earning professionals. However, standard rates are high by international standards. Regional variation is significant – Madrid has lower tax rates than Catalonia, which reaches 50% when combined state and regional rates apply. Many expats combine Beckham Law protection with residence in lower-tax regions like Madrid or Valencia to optimize their tax position.
Frequently Asked Questions
Yes. The Beckham Law applies to self-employed professionals and entrepreneurs who meet the residency requirements. You must file appropriate business registrations and notify the tax authority of your intent to use the regime within the first year.
No. The Beckham Law applies specifically to employment income and self-employment income. Capital gains, dividends, rental income, and other passive income sources remain subject to their standard tax rates (19%-28% for capital gains).
After 6 years, the flat 24% rate expires and you pay standard income tax based on Spain’s progressive brackets. Plan for this transition by that point; consider whether to remain in Spain at standard rates or relocate to optimize tax position.
The brackets shown above already include average regional contributions combined with state rates. However, regional variation exists – some regions (Madrid, Basque Country) have lower rates, while others (Catalonia) are higher. Check your specific region’s rates, as they can add 1-3 percentage points to the combined effective rate.
Yes. Corporate tax (25%, 23% SME, 15% for new companies) is set at the national level and does not vary by region. However, regional incentives and tax deductions may be available in certain regions for specific activities like R&D or manufacturing.
Explore Further
- Tax Rates in Portugal – Compare with Spain’s neighbor
- Tax Rates in France – Higher taxes but different structure
- Tax Rates in Italy – Coming soon
- Cost of Living in Spain – Understand full financial picture
YMYL Disclaimer
Important: This information is provided for educational and informational purposes only and does not constitute professional tax, legal, or financial advice. Tax regulations are complex and subject to change. Rates and regimes described are based on OECD 2024 data, PWC Tax Summaries 2024, AEAT (Spanish tax authority), and DGFiP guidance, but conditions, eligibility requirements, and interpretations may vary by individual circumstance.
We strongly recommend consulting with a qualified tax professional, accountant, or lawyer in Spain before making any tax-related decisions, applying for special regimes like the Beckham Law, or relocating for tax purposes. Your individual situation, including your country of origin, employment type, income sources, and family status, will significantly affect your actual tax liability and available options.
Exchange rates, tax policy, and bilateral tax treaty provisions are subject to change and may affect your tax position. Always verify current rates and regulations with official Spanish tax authority (AEAT) or a licensed tax advisor.