IRPF: Income tax brackets in Spain in 2022

The term to submit the declaration of the Spanish Personal Income Tax (IRPF, in its acronym in Spanish) 2021-2022 is scheduled to begin on 6 April and last until 30 June.

In this campaign, taxpayers must take into account the legal changes that will come into force.

For example, this year the new tax brackets established by the Government to tax income from work and assets come into force.

The coalition government headed by Prime Minister Pedro Sanchez, and of which the Social Democrats (PSOE) and the leftists (Unidas Podemos) are a part, says that it launched this reform with the stated goal that the changes affect the wealthiest taxpayers.

Thus, for those with incomes of more than 300,000 euros, the increase will be 2 percentage points for the new bracket. Meanwhile, for those with incomes above 200,000 euros, the increase will be 3 percentage points.

The income brackets

In Spain there are six tax brackets for most ordinary income for the 2021-2022 tax year: 19%, 24%, 30%, 37%, 45% and 47%. Your tax bracket depends on your taxable income and filing status. 

The Spanish income tax brackets from 2022 are the following:

1. Up to €12,450: 19%
2. From €12,450 to €20,200: 24%
3. From €20,200 to €35,200: 30%
4. From €35,200 to €60,000: 37%
5. From €60,000 to €300,000: 45%
6. Income of more than €300,000: 47%

Wealth tax

On the other hand, the tax brackets for assets income are as follows:

1. Up to €6,000: 19%.
2. From €6,000 to € 50,000: 21%.
3. From €50,000 to €200,000: 23%.
4. From €200,000: 26%.

How withholdings are calculated

In Spain, Income Tax withholdings are calculated by the Treasury (Hacienda) through an estimate that takes into account the taxpayer's salary and various employment, family and personal circumstances.

If the Tax Agency's (Agencia Tributaria) calculation is not correct, the amounts are adjusted by submitting the Income Tax return. The result may be that the State has to return money to the taxpayer or that the taxpayer has to pay even more.

To understand the Spanish Income Tax system, it is important to know the difference between the taxable base (base imponible, in Spanish) and the net taxable amount (base liquidable).

The gross taxable base is the total amount of income and assets that can be taxed by the authority. Deductions or rebates are applied to this taxable base, most of them according to the regulations established by the governments of the different Autonomous Communities.

Next, the rate of the corresponding tax bracket is applied to the net taxable amount or net tax base.