Spain Tax Guide 2026: What Business Owners and Expats Actually Pay
The Spanish tax system has a reputation for being transparent, predictable, and completely unforgiving about deadlines. All three are accurate.
Spain's tax authority (Agencia Tributaria) operates with Germanic efficiency wrapped in Mediterranean bureaucracy. The rules are clear, the forms are digital, the penalties are automatic. Miss a quarterly filing by one day? The penalty hits your account before you realize what happened. Miscalculate VAT? The computer flags it instantly.
For anyone considering starting a business in Spain, digital nomads establishing legal presence, or expats already operating businesses, understanding tax obligations is not optional knowledge. It is the difference between a profitable venture and one that bleeds money through compliance failures. This guide provides actual numbers, real timelines, and honest warnings.
Spanish Business Taxes: The Complete Picture
Corporate Income Tax (Impuesto de Sociedades)
This applies to companies (SL, SA, etc.), not autónomos who pay personal income tax instead.
- Standard rate: 25% of taxable profit (revenue minus deductible expenses)
- Reduced rate: 15% for newly formed companies during their first two profitable years. Note the distinction: years of profitability, not years of existence.
- Filing deadline: Within 6 months after fiscal year end (July 25 for December 31 year-end)
A common mistake: many entrepreneurs assume the 15% rate applies from year one. In reality, if year one is profitable, you pay 25% immediately. The 15% rate only begins in the first year the company shows a profit, not from registration. This misunderstanding causes cash flow crises.
VAT (IVA — Impuesto sobre el Valor Añadido)
Spain's VAT system follows EU directives with three tiers:
- 21% standard rate: Most goods and services
- 10% reduced rate: Hotels, restaurants, transport, some foods
- 4% super-reduced rate: Basic foods (bread, milk, eggs), books, medicines, and medical equipment
You charge IVA on sales (output VAT) and pay IVA on purchases (input VAT). Each quarter, you calculate the difference and either pay the balance or request a refund if input exceeds output. Requesting frequent refunds triggers scrutiny from the tax authority.
VAT filing deadlines: Q1 due April 1–20, Q2 due July 1–20, Q3 due October 1–20, Q4 due January 1–30 of the following year. Missing any deadline by even one day incurs an automatic penalty.
Personal Income Tax (IRPF)
This applies to autónomos and individuals. National progressive rates for 2026:
- Up to €12,450: 19%
- €12,450–€20,200: 24%
- €20,200–€35,200: 30%
- €35,200–€60,000: 37%
- €60,000–€300,000: 45%
- Above €300,000: 47%
Regional supplements add 0.5–3% depending on the autonomous community. Madrid has slightly lower combined rates than Catalunya or Andalucía, though the differences are less significant than many assume.
Social Security Contributions (Cuota de Autónomo)
This is often the biggest surprise for small entrepreneurs. Unlike employment situations where contributions are salary-based, autónomos pay monthly contributions regardless of income. The 2026 reformed system ties contributions to actual income:
- Under €1,000/month income: €230–260/month
- €1,000–€1,500/month: €280–320/month
- €1,500–€2,000/month: €330–370/month
- €2,000–€3,000/month: €380–450/month
- Above €4,000/month: €550–600+/month
New entrepreneur benefits (tarifa plana): First 12 months at €80/month, months 13–24 at €160–220 depending on region, then standard income-based rates thereafter.
Critical reality: social security is mandatory even with zero income. If your business is registered but you have no clients yet, you still owe €230–300 per month. This destroys bootstrapped entrepreneurs who underestimate their burn rate before revenue arrives.
The Beckham Law: A High-Earner's Tax Advantage
For high-earning expats in Spain, the Special Displaced Workers Regime (nicknamed the Beckham Law after its most famous early user) can save a significant amount in taxes.
- The main benefit: Instead of paying progressive IRPF rates (up to 47%), you are taxed at a flat 24% on all Spanish-sourced work income up to €600,000. Above that threshold, the 47% rate applies.
- Worldwide income: Under the Beckham Law, you are generally only taxed on Spanish-sourced income. Foreign investments, rental income from abroad, or foreign dividends typically remain untaxed in Spain.
- Duration: The benefit lasts for the year you move to Spain plus the following five years.
- Eligibility: As of 2026, the law has been expanded to include more digital nomads and entrepreneurs, not just executives. You cannot have lived in Spain during the previous five years to qualify.
Real Tax Burden: What Different Business Scenarios Actually Cost
Solo Autónomo Consultant (€30,000 Annual Income)
- Gross revenue: €30,000
- Business expenses: €5,000 (office, software, travel)
- Net taxable income: €25,000
- Social security: €2,880 (tarifa plana year 1) or €3,600–4,200 (standard)
- IRPF: approximately €4,800–5,500 after deductions
- Gestoría: €600–1,800 per year
- Take-home after taxes: €18,500–21,720
Small SL Company (€100,000 Revenue, €30,000 Profit)
- Corporate tax (15% new company rate): €4,500
- Gestoría services: €1,800–3,600 per year
- Director social security: €3,600–5,000 (must also register as autónomo)
- Director personal income tax on salary or dividends: additional 19–30%
- Effective total burden: 35–45% of profit when all layers counted
Growing Digital Business (€200,000 Revenue, €80,000 Profit)
- Corporate tax: €20,000 (25% standard rate after reduced period)
- Director social security: €5,000–6,000
- Director personal income tax: €10,000–20,000 depending on salary vs dividend split
- Gestoría: €3,000–6,000
- Total burden: €38,000–52,000 (48–65% of profit)
Quarterly Reporting: What You Must File
Spain's tax system demands constant engagement. You are in dialogue with Agencia Tributaria every three months, minimum.
- Model 303 (VAT): Due January, April, July, October (1st–20th of each month)
- Model 130 (Income tax advance): Same quarterly deadlines
- Model 390 (Annual VAT summary): January of the following year
- Model 100 (Annual income tax): April–June of the following year
- Model 347 (Transactions over €3,005): February of the following year
The penalty system is automatic and has no human discretion. Late filing without owed tax: €100–300 minimum. Late filing with owed tax: 1% monthly penalty up to 15%, plus interest. Incorrect declarations: 50–150% of the underpaid amount if deemed fraudulent. No warning, no appeals process before the penalty hits.
Do You Need a Gestoría? (Yes.)
Spain theoretically allows self-filing via the tax authority website. In practice, almost no foreign entrepreneur does this successfully without professional help.
- Autónomo packages: €50–150 per month (quarterly VAT and income tax filings, annual income tax return, expense advice, correspondence with tax authority)
- SL company packages: €150–400+ per month (all of the above plus corporate accounting, annual accounts, payroll if applicable)
Gestoría fees are tax-deductible, and the cost of a single compliance error almost always exceeds months of professional fees. Find a certified advisor through the Official Council of Gestores Administrativos.
Tax Residency: The 183-Day Rule
Spain determines tax residency by physical presence of 183 or more days in a calendar year, or when your center of economic and family interests is in Spain.
- Tax resident: Worldwide income is taxable in Spain, with foreign tax credits available via double-taxation treaties to prevent paying twice on the same income.
- Tax non-resident: Only Spanish-source income is taxable.
Spain has double-taxation treaties with 90+ countries. The key warning: claiming non-residence while actually living in Spain 300+ days per year constitutes tax fraud when discovered, and penalties accumulate with interest from the date they were due.
What Triggers a Tax Audit
The tax authority uses sophisticated cross-referencing of bank movements, client declarations, property ownership, and vehicle registration. High-risk profiles include:
- Frequent VAT refunds (more input than output consistently)
- Income disproportionate to lifestyle (declaring €20,000 while owning a €500,000 property)
- Large revenue fluctuations between years with no clear explanation
- Cash-heavy businesses (restaurants, retail, personal services)
- International transactions and offshore clients
Final Reality: The Honest Math
Budget for 35–45% total tax burden upfront, regardless of business structure. Set aside 40% of revenue for taxes and social security from day one. Hire a gestoría immediately, treat quarterly deadlines as seriously as rent, and never miss a filing window.
Spain sits mid-range in EU tax burden terms: higher than Portugal or Eastern Europe, lower than France, Belgium, or the Nordic countries, and broadly similar to Germany overall. The system is structured, unavoidable, and manageable with proper planning. It is not designed to punish entrepreneurs; it is designed to collect revenue predictably from an organized economy.
Play by the rules. Claim legitimate deductions. Maintain compliance. The system works when you work with it. Read our complete guide to starting a business in Spain for the full registration picture, or use our region assessment tool to identify which part of Spain best fits your business and lifestyle goals.