How Spain taxes interest and dividends (savings income)

Key rules

• Withholding: Banks and companies withhold 19% on dividends and bank interest, and you get credit for it in your return.
• Fund redemptions: Gains from redeeming funds have no withholding, so you declare and pay them in your return.
• Separate scale: Savings income is taxed apart from salary, and prizes are not savings income.

The short answer

Interest, dividends and investment gains are taxed on their own scale, separate from your salary. It has five steps, and each rate applies only to the slice of income inside that step.

The savings scale

The scale is the same in every region:

• 19% up to €6,000
• 21% from €6,000 to €50,000
• 23% from €50,000 to €200,000
• 27% from €200,000 to €300,000
• 30% above €300,000

Example: with €10,000 of savings income, you pay 19% on the first €6,000 and 21% on the other €4,000.

What goes into the savings base

These count as savings income:

• Dividends and profit shares from companies.
• Interest on bank accounts and deposits.
• Interest on bonds and Letras del Tesoro.
• Income from lending your own money to others.
• Income from life insurance and annuities that is capital in nature.
• Gains and losses when you sell assets: shares, funds, property and crypto.

Gains and losses from sales are netted within the savings base.

What does not go into it

Work income, business income, rental income and imputed income belong to the general base, taxed on the general IRPF scale. Prizes also go there, because they are not a gain from selling an asset.

The box below covers Letras, P2P loans, prizes, royalties and alimony in more detail.

Withholding at source

Spanish banks and companies withhold 19% on dividends and on bank interest paid to residents. This is an advance payment, not an extra tax. The amount withheld is credited against your final IRPF bill when you file your return.

• If your total savings income stays within the 19% step, the withholding may cover it all.
• If your income reaches the higher steps, you pay the difference when you file.

Gains from selling investment funds are not withheld when you redeem them. You declare them in your return and pay then.

If you are not a tax resident

Non-residents are taxed differently, generally at a flat rate. This page covers residents only.

Quick answers on Treasury bills (Letras del Tesoro), P2P loans and prizes

How are Letras del Tesoro taxed?

Letras del Tesoro gains are savings income, taxed on the savings scale with no withholding. The gain is the difference between the purchase price and the redemption price. You declare it in the year you redeem or sell.

Is P2P loan interest taxed as savings income?

Yes, interest from P2P and crowdfunding loans goes in the savings base and is taxed on the savings scale. Spanish platforms authorised by the CNMV generally do not withhold, so you declare the interest yourself. Foreign platforms may also trigger the foreign assets report if you pass the thresholds.

How much tax is withheld on bank interest?

Spanish banks withhold 19% on interest paid to residents. The amount withheld is credited against your final tax bill. Dividends also carry 19%, but gains on fund redemptions are not withheld.

Are prizes, royalties and alimony savings income?

No, prizes, royalties and alimony received are taxed in the general base, not on the savings scale. Prizes usually carry 19% withholding, and royalties paid to a professional usually carry 15%, or 7% in the first years of activity. Alimony from a spouse is not withheld, and child support you receive is exempt. State lottery prizes above a threshold (40,000 euros in 2024) pay a separate 20% levy and are then exempt from income tax.