Tax rate for highest incomes in Spain is fourth highest in Europe

by Lorraine Williamson
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MADRID – Spain is in the top 5 in Europe according to the most recent tax comparisons from the OECD when it comes to the level of the highest rate applied in income tax. 

It ranks fourth on the continent, with an overall tax rate of 54%. Spain is only surpassed in this regard by Denmark at 55.9%, France (55.4%) and Austria (55%). In El Economista, the comment of tax specialist Leonardo Neri of Montero Aramberu is that this does not mean that all those countries are stricter in fiscal policy. “While it is true that the marginal tax rate in neighboring countries is higher than that in Spain, the tax burden exerted by income, especially capital, in Spain is higher than the existing average in the EU-27”. 

Returning to the income tax (IRPF): the comparison with the average of 45% on the European continent does not give Spain any advantage either, exceeding it by more than ten percentage points. Outside the eurozone and the European Union, the United Kingdom also stands out with a maximum tax of 45%. 

The OECD comparison shows that the lowest maximum margins are found as follows, in;

  • Latvia (31%)
  • Slovakia (25%)
  • The Czech Republic (23%)
  • Estonia (20%)
  • Hungary (15%9


In Spain, some autonomous regions, are taxed by more than 52%. This is the case of the Valencia region where, due to the high regional part, a percentage of 54% applies. And the situation is not going to change in that area. Regional president Ximo Puig has announced changes to the income tax, but these are limited to a deflation of the brackets for incomes below €60,000 per year. So there will be no moderation of taxes for high incomes. 

Cogesa Expats

Outside the Valencian Community, there are other areas with percentages equal to or greater than 50% in their major part of the income tax. These are Asturias, Cantabria, Navarra, La Rioja and Catalonia. 

In this last autonomous region, which has been known for decades for its high tax rates, there will also be no changes in income. This even includes those of the lowest levels foreseen in personal income tax. 

Two Spains 

According to El Economista, there are two Spains. This is especially regarding the treatment of higher-income citizens living in regions governed by the PP. Below a percentage of 50%, are the following;

  • Galicia (47%)
  • Castilla La Mancha (47%)
  • Andalucia (47%)
  • Castilla y León (46%)
  • Madrid (45%)

Income tax reduced in rural areas 

Based on the most recent announcements about changes in territorial fiscal policy, it is predictable that disparities will continue to widen. Income taxes have been cut in Asturias and the Canary Islands, but especially in rural areas at risk of depopulation. A similar strategy is being followed by Aragón, controlled by the PSOE, for areas with demographic problems. 

Much more general is the half-point reduction in all autonomous sections of the IRPF that Madrid has decided this year; the reduction of the maximum rate from 48.2%to 47% in Andalucia or Galicia, simplifying the tax structure from seven to five brackets. 

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