Understanding the Spanish Tax System: General & Savings

General Tax Base

The General Tax Base is calculated by adding the following balances:

• a) Positive or negative balance resulting from integrating and netting income and imputations following income:
  • Performance of work.
  • Performance of real estate.
  • Performance from movable capital: intellectual property, technical assistance, rental property, business or mine, sublease, and assignment of rights of image.
  • Income from economic activities.
  • Allocation of income from: Real Estate, controlled foreign company regime, transfer of image rights, investment institutions.
• b) Surplus of integrating and netting of gains and losses, not from the transfer of assets and liabilities, such as the additions of property and rights to the assets of the taxpayer, from, for example, prizes and gambling winnings.

If the balance of point (b) is positive, the amount is offset by the negative balance from point (a) up to 25% of point (b).

Taxable Income from Savings

Consists of the sum of the following balances:

• a) Surplus of integrating and netting of capital gains from furniture:
  • Participation of institutions' own funds (dividends).
  • Transferred to third parties for capital (interest on bank accounts).
  • Capitalization operations, contracts of life insurance and disability, and income from taxation of capital.
• b) Surplus of integrating and netting of gains and losses from the transfer of assets and liabilities, regardless of their generation time.

If the balance of paragraph (b) is negative, it may be covered in the next four years.

Payable Base

The law distinguishes between:

1. General Payable Base: For its calculation, subtract from the general tax base. Reductions cannot be negative (if once implemented, remaining reductions will be together, for compensation or pension contributions to political parties; these reductions will be implemented in the taxable savings, which cannot be negative).

The applicable reductions are:

• A) Reduction of joint taxation: Varies depending on the family unit:
  • Spouses and minor children: €3,400.
  • Single-parent family unit: €2,150.
• B) Reduction for contributions to the heritage protection of disabled persons.
• C) Reduced by contributions to social welfare systems.
• D) Pensions and compensatory annuities for food: If they are by judicial decision.
• E) Reduction of quotas and contributions to political parties with a ceiling of €600.

If the general base is negative (not as a result of reductions), its amount may be offset by positive amounts payable in four years.

2. Savings Payable Base: This is the result of reducing the tax base of savings in the part of the joint tax reductions for fees and contributions to political parties and compensatory pensions which could not be subtracted from the general payable base.