Tax questions need professional advice

What are my tax allowances here?

Q. I have not really given much thought to Spanish taxes until now.

Can you answer one question? How much could a married man – self-employed and sole breadwinner in the family – earn last year before being liable for Spanish income tax?

R.A. (Costa del Sol)

What are my tax allowances here?

 

A. With all due respect, far too many recent arrivals in Spain fail to consider that they are just as liable for Spanish tax as Spanish workers are. The self-employed such as man and van or mobile English electrician often fall into this class.

I urge any foreigner who earns money in Spain to consult a Spanish Asesor Fiscal, a tax consultant, to find out what steps he must take to become a legal taxpayer.

He may be surprised that, if his income is modest, he pays very little tax.

If he gets a copy of You and the Law in Spain, this will help him to ask his tax consultant the right questions.

To answer your questions, anybody who earns money in Spain is liable for Spanish income tax.  Let’s list a few basics.

1. The maximum that a person can earn without being liable to make a tax declaration is only €1,000.

2. Being liable for tax and having to pay tax are two different things.  A worker who declares an income around €10,000 will have nothing to pay because he has a wage earner’s allowance over €4,000 and a basic personal minimum deduction over €5,000, total of €9,000, meaning no tax payable.

3. You have heard that €22,000 is the bottom figure for Spanish tax.  This number applies only to employees who already have income tax and Social Security withheld from their salaries.

4. A self-employed person, autonomo, is required to make a tax declaration every quarter, whether he has income or not.  He also pays over €250 a month for Spanish Social Security.