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Hello fellow blog members,
Looking at the taxation bands applied on income, how would you work out your taxable amount ?
1) add up the various incomes, see in which band the total falls and then apply whichever of 19%, 24% or 30% is relevant
or
2) apply 19% to the amount up to 12450euros, then 24% on the difference (12451-20200) and finally 30% on the rest (20201-35000). And so on.
Thank you.
Posted: Sun Aug 23, 2020 7:37pm
Helpful member
The method of calculation is similar to the UK* but the personal allowance is lower and the tax percentages higher.
I reckon I’m about 1200 euros a year worse off here - a figure which is totally offset and more by the ‘Council’ tax savings alone (and they collect the rubbish daily - unlike the 3 weekly collections in parts of the UK!)
* edited in deferment to Jim’s much greater knowledge and experience,
Posted: Mon Aug 24, 2020 1:53am
This post that was quoted has been deleted.
Thank you for that link D80gs2 , I found it helpful.
However I think the current tax allowance should read Euro 6750 (i.e 5550+1150 extra for being >65yrs) not 6069.
But I may be wrong.
Either way I'd too found myself being worse off of at lest a grand or two , until I consider the saving derived from no longer paying the exorbitant yet inferior local services (Council tax !) . Then the balance changes drastically......
Regards
Posted: Mon Aug 24, 2020 5:45am
Legendary helpful member
Spanish tax calculations are totally different to the UK.
The base rate is now 19.5%. After that it gets messy, as there are different tax bands for the state and Valencia.
Basically, deduct €2000 from earnings related income.
Deduct earnings related personal allowance if you qualify for that.
Work out tax due.
Deduct 19.5% of the personal allowance.
Add tax due on savings related income.
Posted: Mon Aug 24, 2020 2:10pm
jimtaylor wrote on Mon Aug 24, 2020 5:45am:
Spanish tax calculations are totally different to the UK.
The base rate is now 19.5%. After that it gets messy, as there are different tax bands for the state and Valencia.
Read more...
Basically, deduct €2000 from earnings related income.
Deduct earnings related personal allowance if you qualify for that.
Work out tax due.
Deduct 19.5% of the personal allowance.
Add tax due on savings related income.
This is going back to being...confusing . With Jim's table I now find myself paying very little taxes.
Not just! There is a massive difference in percentages between the table from Taxleak.com submitted by D80gs2 and Jim's table.
My understanding is that I should work it out like this, right?
Y = 6750 (being the tax allowance for >65)
X = Total of all retirement pensions
x-y= Z (taxable income)
Then take Z and apply on it the tax bands of 10% 11% 13.9% (as I live in the Valencian Region = Alicante)
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Posted: Mon Aug 24, 2020 2:50pm
Legendary helpful member
leon54 wrote on Mon Aug 24, 2020 2:10pm:
This is going back to being...confusing . With Jim's table I now find myself paying very little taxes.
Not just! There is a massive difference in percentages between the table from Taxleak.com submitted by D80gs2 and Jim's table.
Read more...
My understanding is that I should work it out like this, right?
Y = 6750 (being the tax allowance for >65)
X = Total of all retirement pensions
x-y= Z (taxable income)
Then take Z and apply on it the tax bands of 10% 11% 13.9% (as I live in the Valencian Region = Alicante)
Don't get your hopes up, young man!
You need to add the state tax as well.
And your understanding is wrong - just read the sequence I posted above.
Also see the following to find out if you're entitled to earnings related allowance.
Posted: Mon Aug 24, 2020 2:54pm
Legendary helpful member
This post that was quoted has been deleted.
Sorry, but that link is just likely to confuse, as it assumes double the state rates apply.
Each autonomous community is entitled to set their own tax rates, but Valencia have gone one better and also set their own tax bands.
Posted: Mon Aug 24, 2020 4:45pm
Legendary helpful member
This post that was quoted has been deleted.
Crude it may be, but it's a nice neat way of doing it - once you've corrected it by transposing the State and Valencia headings!
The OP needs to bear in mind that he needs to first deduct €2000 from the total earnings related income, and also deduct the earnings related allowance if he qualifies for that.
Ref the latter, how about a spreadsheet:
Earnings related Personal Allowance:
This allowance is only available if savings related income does not exceed €6500
If earnings related income is less than €13115, the allowance is €5565.
If earnings related income is between €13115 and €16825, the allowance is:
€5565 less 1.5 x (earnings related income - €13115)
Over €16825 you don't get anything
Posted: Mon Aug 24, 2020 5:23pm
This post that was quoted has been deleted.
Thank you Jim.
So, say the income is 20,200. the calculations would be:
20200 minus 6750 = 13450 of which
[email protected]% = 2428
1000@23% = 230
TOTAL TAXES DUE ON 20,200 is : 2658.
Posted: Mon Aug 24, 2020 5:50pm
Legendary helpful member
leon54 wrote on Mon Aug 24, 2020 5:23pm:
Thank you Jim.
So, say the income is 20,200. the calculations would be:
Read more...
20200 minus 6750 = 13450 of which
[email protected]% = 2428
1000@23% = 230
TOTAL TAXES DUE ON 20,200 is : 2658.
No! Follow the steps I gave you. Take €2000 off the figure before you calculate tax due, again in accordance with the sequence I gave. Sorry, but I think you're suffering a mental or visual block.
