Tax system

Your residence card bears a fiscal number (número de identificación de extranjero/NIE), which must be quoted when opening a Spanish bank account or paying Spanish taxes. All residents (and non-resident home-owners) must have an NIE, including Spaniards, when it's called the numero de identificacion fiscal (NIF: This is the tax ID number for all individuals. For Spaniards, it's the DNI plus one letter; for foreigners, it's the same number as your NIE).

Note that most taxes in Spain are based on self-assessment, meaning that individual taxpayers are liable to report and calculate any tax due within the time limits established by law. Tax forms must be purchased by taxpayers and are obtainable from a tobacconist's (estanco), although some are only available from tax offices (agencia tributaria). Penalties and interest are levied for late or non-compliance.

The tax year in Spain is the same as the calendar year (1st January to 31st December).

General types of taxes
Income Tax (impuesto sobre la renta de las personas físicas/IRPF): is payable on worldwide income. Spanish Income Tax rates are below the European average and has a large number of deductions, but rates for high-income individuals exceed 50%.

Business Tax (impuesto sobre actividades económicas/IAE): is paid by all businesses including the self-employed once a year (formerly called licencia fiscal).

Company or Corporation Tax (impuesto sobre sociedades): is paid at 35 per cent on profits by partnerships and registered companies such as a Sociedad Anónima (SA) or Sociedad Limitada (SL).

Property or Real Estate Tax (impuesto sobre bienes inmeubles urbano, formerly called contribución urbana): is paid by property owners. You won't pay the tax if you reinvest the money from your property within 1 year.

Wealth Tax (impuesto sobre el patrimonio): is payable on capital assets, including property.

Capital Gains Tax (impuesto sobre incremento de patrimonio de la venta de un bien inmeuble): is payable on the profits made on the sale of property and other assets located in Spain.

Inheritance and Gift Tax (impuesto sobre sucesiones y donaciones): is payable on worldwide assets.

Garbage Collection/Mains Drainage Tax (basura y alcantarillado): is an annual tax payable by property owners.

Offshore Company Tax (impuesto especial): is an annual tax on offshore companies that don't declare the individual owner of property in Spain or the source of investment.

Social Security (seguridad social): isn't strictly a tax, but is payable by employees and the self-employed.

Motor Vehicle Tax (impuesto de circulación): is paid annually by all vehicle owners on Spanish registration plates.

Value Added Tax (impuesto sobre el valor): is payable on a wide range of goods and services at varying rates.

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