Reductions on Spanish with-holding Tax

tax in marbellaSpanish tax advisers in Marbella have the pleasure to announce reductions into the Spanish with-holding tax. The so known “Retenciones e ingresos a cuenta del IRPF”.

Spanish withholding tax professional activity.

The with-holding tax in Spain to be applied on the net amount of an invoice issued by a self employed performing a professional activity for the tax year 2015 has been reduced from 21% to 19%.  Therefore, from the 01.01.2015 all the invoices issued by professionals subject to the general rule should apply this new reduced rate.  It has also been approved that for the tax year 2016 will be reduced again down to 18%.

Reduced withholding tax rate in Spain.

One of the exceptions to the general rule is for the professionals that start a new professional activity.  At this time they can choose for a reduced retention rate of 9% for the start year and the following two years the professional activity.

The Spanish Royal Law decree which was approved in July 2014 included a reduction of the retention to be applied by certain self-employed performing a professional activity.  The retention was reduced from the basic rate down to 15%.  In order for the self-employed to qualify for these reductions he/she needs to comply with the two below points:

  1. The income of the activity during the previous fiscal year must have been under 15.000,00.-Euros.
  2. At least 75% of the total income must be from the professional activity.

The tax payer in Spain must notify the payer of the income that he/she qualifies for the reduction as both above points are meet in his/her situation.  The original of this communication must be duly signed and stamped if possible and should be kept by the payer.

Professional Activity Summary Rates applicable 2015 Rates applicable 2016
% %
General Rule 19 18
Reduced Rate for initial of Activity 9 9
Reduced Rate for previous year low income 15 15


For other self employed individual performing a Business activity subject to retention find below the rate retention tax to be applied at the time of issuing an invoice:

Other Activities Rates applicable 2015 Rates applicable 2016
% %
Farming Activities in general (art. 95.4 RIRPF) 2 2
Fattening pigs and poultry Activity (art. 95.4 RIRPF) 1 1
Forestry Activity (art. 95.5 RIRPF) 2 2
Business activities (art. 95.6 RIRPF) 1 1

Do you wish to know how we can be at your service about this subject? Click here: Tax law Tax and accounting advice

Do not hesitate to contact on of the English speaking tax advisers of our firm in Marbella, Málaga, Spain, for any tax or legual issue. Arcos & Lamers Asociados, your lawyer and accountant under one roof!.

Sara Duarte, Accountant in Marbella.

  • Wim Lamers
  • Accountant in Spain, Accountant Marbella, Lawyers in Marbella, Spanish tax,

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