In these recent weeks in which the international attention has been focused on Greek’s future in the Euro, the Spanish Government has positively surprised Spanish taxpayers with an advanced reduction of taxes, which we shall perceive at the end of this month.
More funds that shall be at the disposal of Spanish citizens, with the purpose of revitalising growth and increasing employment.
✔The positive revenue evolution up until May 2015 together with the mentioned economic objectives, has lead the Spanish Government to approve the advanced reduction of taxes of the Spanish Personal income tax, consisting of:
- The approval of a new Personal income tax rates scale, with an economic effect equivalent to anticipating the reduced rates applying as from 2016 to the second semester of 2015, both for the general and savings income.
- The general reduction of withholding taxes applying to professionals from 19% to 15% (7%, during the first three years of activity).
- The adjustment of all withholding taxes to the new tax rates. Employees will be subject to the new rates on income obtained from August 1. However, employers can elect to apply the new rates as from the entering into force of the new rules, (July 12, 2015).
✔Besides and as from July 12, 2015:
- The withholding tax rate applying on Corporate income tax is reduced from 20 to 19,5 per cent up until December 31, 2015.
- The non-residents tax rate is reduced to 19.5% on certain Spanish source income: dividend, interest, capital gains, branch profits remitted and the general rate applying to taxpayers residents in another EU member State, Island or Norway.
✔ This is really good news, especially taking into consideration the recent years of severe fiscal adjustments that Spanish taxpayers have suffered.