jimmbo

From April of this year, those of us still trapped in the UK will have to pay 20%tax on earnings up to £37400.

Gone are the 10 and 22%.

What is the % tax in Spain?

Do they have tax bands?

Mitzyboy

http://www.spainaccountants.com/rates.html

jimmbo

Thanks Mitzy,
Is the "Local tax" equivalent to the UK council tax (rates)

Cape Blue

No - they are both income taxes based on your income

council tax (IBI) is something different - normally quite a bit less than the UK although it often doesn't include waste disposal (Basuras)

Mitzy - any idea how the personal allowance deal works - I can see there is a general allowance but am never sure how this interacts with the earnings related personal allowance. http://www.spainaccountants.com/it.h...l%20allowances

Mitzyboy

My book of tables is downstairs ... and I aint going out in the cold to get it, but a married couple iirc can earn about €13k without being taxed here. So if you have a state pension and a government pension for instance it aint too difficult to figure out what to do to play the system

Fred James

You get a personal allowance of 5151 plus the earnings related allowance which is on a sliding scale depending on your income.

It is a maximum of 4080 dropping to 2652 if your income is over 13260.

Pensions are considered to be earned income so you get this allowance.

If you are claiming as a married couple, you do not both get the personal allowance, instead you get one personal allowance of 5151 plus a "family" allowance of 3468.

You both get any age allowance if over 65 or 75.

These allowances are only allowed against the standard rate of tax - 24%.

Cape Blue

Thanks Fred,

so a single person earning 20,000 euro would have a personal allowance of 7803 before the rest being taxed at 24%. (tax = 2927 euro)

compared to the UK where a person earning BP 18,000 would have GBP 6475 allowance before the rest being taxed at 20% (tax = 2305 GBP)

This example appears to show a lower income tax in the UK for the same salary.

Fred James

Fair comment. Usually tax is higher in Spain compared to the UK. There are however some attractive allowances if you have an annuity or if you have a mortgage, which are not available in the UK.