The annual tax return encompasses all types of incomes classified as follows:
The above incomes may be taxed with the Regular Tax Scale or the Saving Tax Scales depending on whether the time for generating the revenue was less or more than 2 years.
“Example: You receive dividends from a fund investment of 5000€ after a period of 2 years maturity. Provided that this is the only revenue under this category it will be taxed at 20% independently of your gross revenue under other concepts.”
Double taxation agreements:
Income generated outside Spain must also be declared. However If there is an agreement on double taxation between Spain and that country (these include all EU countries and some others), whatever tax paid for that concept in the foreign country will be deducted from you tax liability in Spain.
Paperwork and documented evidence The submission of a tax returns does not require the inclusion of documented proof of the incomes, however it is highly recommendable to keep these safely in case of an inspection or you will not have enough time to gather them all.
Personal allowances may be applied however while some will reduce the taxable amount, others will reduce the actual tax due. For example contributions to a private pension plan (within limits), contributions to a pension plan for a disabled member of the family, Maternity allowances are tax deductable.
Final Figure. Payment or Rebate?
Most likely, as a business owner, you have been making quarterly tax payments in advance. This is when your final tax is calculated and, if you overpaid, you will be pleasantly surprised with a tax rebate. Of course it could also mean that you do owe more when your personal tax rate applicable exceed the 20% default rate that is applied to retentions and advance payments.