All Of The Taxes That Will Increase In Spain In 2024

Only two things are certain: death and taxes. And if you live or work in Spain then there’s bad news about the latter. In 2024 several different taxes in Spain are set to increase.

The Spanish government is forecast to collect a whopping 7.5% more in taxes during 2024 than they did in 2023. Several different taxes are set to increase including personal income tax and tax on large fortunes. Spanish residents also face a rise in their social security contributions.

In total 14 different taxes will increase in 2024. These will affect citizens, residents, and companies based in Spain. Here’s everything you need to know about all of the taxes that will increase in Spain in 2024:

Personal Income Tax

The tax increase that will affect most people living and working in Spain is the increase to personal income tax. The Spanish government will collect €204 million more from personal income tax next year than they did this year.

The main reason that earnings from personal income tax will increase is because the Spanish government has approved a change to a tax brackets in the country. This means that not only will anyone with a capital income of less than €200,000 be taxed at up to 27 percent, it also means that a new 28 percent tax bracket has been introduced for profits from investments exceeding €300,000.

If you’re self employed in Spain then there are also changes to your personal income tax requirements. The Spanish government will  collect an extra 155 million from the self-employed, This is in huge part because the taxpayers who declare personal income tax and VAT in the so-called module system will no longer be able to apply this year's 10 percent reduction in 2024 to calculate their net income. Instead, it will be reduced to 5 percent.

Reduced VAT on electricity and food

It’s not all bad news for 2024, as the VAT reduction on basic food items that has been in place in Spain for the past 12 months will continue to remain in place until June 2024. However the VAT reduction that had been applied to health products and electricity will not apply in 2024.

Because this VAT reduction on electricity and health products has been reversed the Spanish Tax Agency will receive around €1.016 billion from VAT on electricity in 2024, and €397 million from the VAT on wood, gas and pellets for heating. 

Special taxes

As we have already mentioned about the special tax that had applied to electricity has been reduced and this tax rate will increase to 5.11%. This will raise an additional €1.032 billion for the Spanish government.

 This is not the only special tax in place for 2024. A new tax on single-use plastics also be introduced and will add €58 million more to Spanish government coffers.

Taxes on Large Fortunes

If you’re sitting on a significant sum of money then there is also bad news for you if you live in Spain. The temporary solidarity tax on large fortunes that was introduced in 2023 will continue into 2024. This is an extra tax that is implemented to anyone who is sitting on net assets greater than €3 million and added 21 million to the Spanish government in 2023.

Tax on energy production

The exemption for Tax on the Production Value of electrical energy will end, meaning that another €1.1 billion will be collected from this energy production method.

Changes To Social Security Contributions

Social security contributions will increase for many Spaniards and this will raise an additional  €1.017 billion for the Spanish government. Most of this will derive from the replacement of the sustainability factor of public pensions with the Intergenerational Equity Mechanism (IEM), which will contribute €780 million. The maximum contribution base will also be adjusted and this will impact many this year.

Corporate tax

Finally if you’re a business in Spain then you may find that you’re impacted by an increase in corporation tax. Additional funds will mostly be raised from the limitation on compensation between business groups, which will translate into €609 million extra for the State.

For smaller companies that invoice less than 1 million a year though, there will be a reduction of the tax rate. This will result in a deduction of €282 million from the State coffers.

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