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As of January 1, 2025, Spain has implemented a new series of fiscal increases affecting various sectors of the economy. From basic consumer goods to personal income tax, taxes have experienced a generalized increase without significant reductions in any area. Here are the main tax changes:
Reduced VAT from 2% to 4%: Bread, eggs, legumes, milk and flour.
Reduced VAT from 7.5% to 10%: Food pastes and seed oils.
During the energy crisis resulting from the conflict between Ukraine and Russia, the VAT on electricity was temporarily reduced to 5% and 10% to mitigate the impact of rising prices. However, in 2025, it has returned to its original level of 21%.
Brussels has demanded that the diesel tax be equated with that on gasoline before March 2025. This will result in an increase of 6 euros For each 50 liters of fuel.
2% increase in the last tranche of personal income tax: For those who earn more than 300,000 euros, the rate goes from 28% to 30%.
This increase also affects the rate of the dividend, interest and capital gains tax regime.
Increase of 30 euros in the monthly fee for self-employed workers with incomes between 1,700 and 1,850 euros.
Increase of 60 euros in the monthly fee for self-employed workers with incomes greater than 6,000 euros.
*Slight reduction in fees for the lower sections.
The MEI, which deducts a portion of the salary to ensure the sustainability of the pension system, increases by 0.8% of salary:
- 0.67% paid by the company
- 0.13% paid by the worker
Minimum tax of 15% on profits for multinationals and large companies.
Maintenance of progressive bank tax, with a rate of 1% up to 750 million euros and up to 7% for figures greater than 5 billion euros.
New taxes in April:
- Tax for electronic cigarettes and nicotine bags, based on your nicotine level.
- Garbage rate in municipalities with more than 5,000 inhabitants (previously optional).
*Possible establishment of a 21% VAT for tourist apartments*
Since tax reductions are not expected in the short and medium term in Spain, many individuals and companies are looking for options to optimize their tax situation.
Dubai is one of the best alternatives thanks to its favorable tax system:
- No personal income taxes.
- Corporate Tax of 9% (applicable to companies with net profits greater than 375,000 AED).
- VAT of 5%, only applicable to goods and services within the United Arab Emirates.
*To find out more benefits that Dubai offers, you can check out the following blog:
If you're interested in exploring opportunities in Dubai and learning about the tax benefits it offers, don't hesitate to contact us for more information.
