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We blog legal and tax information targeted to resident and non resident UE citizens in Spain to help them with these issues and to solve doubt and generate controversy about these matters.

02 February 2010 @ 18:36


1 Deduction of 400 € from 1 January 2010.

Specifically, the famous deduction on work incomes and incomes from economic and professional activities of € 400 is reset to benefit only the lowest incomes, introducing a progressive approach that should have accompanied this deduction since its birth.
It has been amended so that its application will be entitled just to those taxpayers whose tax base is less than € 12,000 and earn income from employment or economic or professionals activities. The deduction shall be full for taxpayers whose tax base is equal to or less than € 8,000. From € 12,000 € 8000.01 progressive criteria  have been introduced.
The application of this deduction for the self-employed varies substantially at the calculation of their payments on account of their income tax (form 130) and if the sum of net income of the quarter reaches     €12,000, the deduction will stop in the quarter the self-employed reaches that figure.

I.e, if the sum of net income from January 1 to June 30 exceeded € 12,000, and in the second quarter I won´t apply the deduction
2 Retentions and payments in advance

For this year 2010 we have new rates of retentions and payments in advance in the Income Tax.
Those streams of revenues that had a retention or payment in advance rate of 18% now will have a 19%

• The investment incomes
• Capital gains on transfer or redemption of shares and units in collective investment institutions.
• Cash prizes
• Use forest
• Leases and subleases of urban buildings.
• The income from intellectual property, industrial, technical assistance, the lease of movable property, business or mine, the sublease on the property before and from the sale of the right of exploitation of image rights

3 Rates of taxation of savings and capital gains incomes from 1 January 2010.

The first 6.000 tax base will have a rate of 19% and the amounts beyond € 6.000 21%
4.Taxation displaced workers to Spanish territory.

Recall that this tax regime allows foreign workers who go to Spain because of an employment contract, to be taxed as non residents, despite being residents. This implies that employment income will be taxed a maximum of 24% compared to the overall scale, which in the case of renowned football players such as Cristiano Ronaldo, should be taxed at 43%.
This tax regime is maintain in its same terms with the exception that is that not to be appiedy to workers whose employment income exceeds € 600,000 year.

Cristiano you can remain calm. This new regulation is only for displaced workers that come over to Spain from 1 January 2010 on.
5. Reduction in income tax net return of economic activities by maintaining or creating employment, dated effect from 1 January 2009.

A reduction of 20% of positive net economic results to taxpayers with a turnover of less than 5 million euros and an average payroll of less than 25 employees if during the years 2009, 2010 and 2011 maintain or create jobs . The term for comparison of these economic exercises is the average of workers in 2008, except that during that year had not done any activity.
The amount of the reduction has an absolute limit and it can not exceed 50% of the amount of wages paid in the year to all the employees.

The average number that serves as a basis for comparison can not be less than unity, except for a very specific case of beginning of activity during the years 2009, 2010 or 2011 provided that in the following year to the one the activity is initiated that unit is reached.
6. Tax rate reduced corporation tax for maintenance or job creation for companies.

With effect back on January 1st of 2009 there is a new reduced rate of taxation for companies whose net turnover is less than 5 million and have an average payroll of less than 25 workers.
The first € 120,202.41 will be taxed at 20% and the rest of the base to 25%
The reduced taxation is conditional upon during the 12 months following the start of the year in question the average of workers is not less than unity and not less than the average of the 12 months preceding the start of the first financial year beginning from January 1, 2009. Just as with personal income tax deduction, the term of comparison remains the financial year 2008.


Antonio Robles Jara
Tax Solicitor of

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