Spain

Spain uses a dual income tax system (IRPF) separating general income (progressive, 19-47%) and savings income (19-28%). The general income tax combines national and regional rates, with 17 autonomous communities each setting their own tax brackets and rates. The combined top marginal rate ranges from 43% to over 54% depending on region. Social security contributions for employees are approximately 6.35% of gross salary, covering common contingencies and unemployment. Employer contributions are approximately 30% of gross salary. Contributions are capped at a maximum base of approximately EUR 4,720 per month. Spain has generous personal allowances: EUR 5,550 basic, with additional amounts for dependents and age. Deductions are available for pension contributions (up to EUR 1,500 per year), charitable giving, and home purchase (for pre-2013 purchases). Regional deductions vary significantly. Spain mandates two extra monthly payments (pagas extraordinarias) in June and December, effectively increasing annual pay to 14 months. VAT (IVA) is 21% with reduced rates of 10% and 4%. The corporate tax rate is 25% (23% for companies with revenue under EUR 1 million). Spain has a special tax regime for inbound workers (Beckham Law) offering a flat 24% rate for up to 6 years.