income tax, escala estatal and escala economica
Thread poster: lumierre

lumierre
Local time: 12:24
Member (2013)
German to English
+ ...
Jan 9

I was trying to research the income tax in Spain, particularly Valencia area and found this table.
http://www.irpf.com.es/valencia.html

There is an escala estatal and escala economica there, and in the final table, these two are cummulated. Does it mean that my income is finally tax on the cummulated rate?

Does anyone knows more on this? Is not clear to me.


Bamidele Bamisaye
 

Sheila Wilson  Identity Verified
Spain
Local time: 11:24
Member (2007)
English
+ ...
Not economica Jan 9

lumierre wrote:
There is an escala estatal and escala economica there, and in the final table, these two are cummulated. Does it mean that my income is finally tax on the cummulated rate?

It reads autonómica. Part of our tax is due to the state (i.e. Spain) and part is due to our region. Valencia is an autonomous region (well, sort of). It seems to me that all the percentages in the final table need to drop down by a line, but maybe I'm misreading it -- I'm not good at figures and graphs. Whatever, we don't pay tax on the first €12,000 or so, and we pay 19.5% on income above that until you get into the higher tax brackets..


Bamidele Bamisaye
 

lumierre
Local time: 12:24
Member (2013)
German to English
+ ...
TOPIC STARTER
confirmation Jan 9

So, my income would be taxed on the cummulated rate *state plus Valencia zone, right?

Bamidele Bamisaye
 

Sheila Wilson  Identity Verified
Spain
Local time: 11:24
Member (2007)
English
+ ...
Yep, I think so Jan 9

lumierre wrote:
So, my income would be taxed on the cummulated rate *state plus Valencia zone, right?

The figures seems spot on and it makes sense to me. I'm no accountant though, and they're the people you really need to address such questions to .


Bamidele Bamisaye
 

neilmac  Identity Verified
Spain
Local time: 12:24
Spanish to English
+ ...
Check figures Jan 11

[quote]Sheila Wilson wrote:

lumierre wrote:
I'm not good at figures and graphs. Whatever, we don't pay tax on the first €12,000 or so, and we pay 19.5% on income above that until you get into the higher tax brackets..


I'm no financial wizard either, but I'm in Valencia and currently billing my clients at 15% income tax (IRPF). In the past few years I've usually had to pay a top-up at the end of the year; perhaps it is to bring it up to the 19.5% figure you quoted. I will be seeing my gestor soon about my quarterly and annual returns, so I'll ask him about that.



[Edited at 2020-01-11 09:43 GMT]

In fact, I just checked online and the self-employed rate appears to be 15%. Perhaps you are registered as a company, Sheila, rather than a sole trader?

"Durante el 2019 el porcentaje de IRPF de contribución para un autónomo es del 15%. Por tanto, pagarás a la Agencia Tributaria la cantidad proporcional al 15% de todo lo que hayas facturado en un trimestre."

[Edited at 2020-01-11 09:45 GMT]


Bamidele Bamisaye
 

Philippe Etienne  Identity Verified
Spain
Local time: 12:24
Member
English to French
Clarification Jan 11

I also stress that I know nothing about accounting and just rely on my "gestor" for any paperwork. But I like to understand what I pay.
The "retencion de IRPF" of 15% is only an advance payment of your full IRPF that is calculated at the end of your fiscal year (taso taking into account the 20% of sales menos expenses that you pay at the end of every quarter +20 days).
Sheila's 19.5% is likely the tax rate of the second taxable income bracket (I don't know). It's used to work out how
... See more
I also stress that I know nothing about accounting and just rely on my "gestor" for any paperwork. But I like to understand what I pay.
The "retencion de IRPF" of 15% is only an advance payment of your full IRPF that is calculated at the end of your fiscal year (taso taking into account the 20% of sales menos expenses that you pay at the end of every quarter +20 days).
Sheila's 19.5% is likely the tax rate of the second taxable income bracket (I don't know). It's used to work out how much income tax you owe the state at the end of the fiscal year, and has nothing to do with the 15% of advance tax payment.

If you pay a top-up at the end of the year, it's an adjustment of the full income tax you pay each year (taking into account any rents, capital interests, etc. you earn, your family status, etc.), minus the amounts you pay every quarter, minus the 15% you deduct form each invoice to a domestic customer.
I sometimes get money back and sometimes pay more.

Philippe
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Sheila Wilson  Identity Verified
Spain
Local time: 11:24
Member (2007)
English
+ ...
I'm getting more confused every minute :) . Jan 11

I know we (autónomos) deduct 15% from invoices we send to business clients registered in Spain - they pay it to the government so it's a sort of PAYE. That's 15% of the whole invoice amount. If most/all of your income gets that 15% deducted, you don't pay anything else until after year end.

If little/none of your income comes from business clients in Spain (my case), you pay tax quarterly on your net income (I.e. deducting all the allowable expenses). TBH, I don't know what percen
... See more
I know we (autónomos) deduct 15% from invoices we send to business clients registered in Spain - they pay it to the government so it's a sort of PAYE. That's 15% of the whole invoice amount. If most/all of your income gets that 15% deducted, you don't pay anything else until after year end.

If little/none of your income comes from business clients in Spain (my case), you pay tax quarterly on your net income (I.e. deducting all the allowable expenses). TBH, I don't know what percentage I pay as my asesor sorts it out.

Then at the end of the year you do a tax return covering your worldwide income. For me, that means declaring pensions too. Everyone has an entitlement to some tax-free income, so it's possible you'll qualify for a refund, but often you have to pay a bit more.
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Philippe Etienne
 


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