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Business Environment

Local Economy

Malaga and its province have experienced economic expansion during the past few years, surpassing both the Andalusian and the Spanish growth rates.

 
 
From 2009-2019
 
  • 101 foreign companies: 89 started new activities & 12 increased their workforce or acquired a local Malaga.
 
  • 4,075 jobs created by foreign companies which have contributed to the positive economic development during the last decade.

 

The most dynamic sectors are Tourism, Construction, Agriculture and Technology Services, but other sectors such as Transportation and Logistics are expanding too.

Taxes

Spain’s fiscal/tax year is the natural calendar year. Income taxes in Spain should be paid between May 1 and June 30 for the previous year’s income.

Tax residents will need to pay income taxes in Spain and are generally defined as those who reside in Spain over 183 days in each calendar year and/or have their main financial interest in Spain.


Personal Income Tax (IRPF) is charged on the available income of individuals according to a progressive rate scale ranging from 20% to 47%.

Income (above allowances) Tax Rate 2020
0 € - 12,450 € 19 %
12,450 € - 20,200 € 24 %
20,200 € - 35,200 € 30 %
35,200 € - 60,000 € 37 %
60,000 € - 130,000 € 45 %
130,000 € - 300,000 € 47 %
above 300,000 € 49 %


Expatriate workers can choose between this general tax system or the non-resident tax system (IRNR) at a fixed rate of 24% for a maximum of 6 years and a maximum annual income of 600,000 Euros. Income generated in other countries is not subject to the tax on this Spanish income. 

The following conditions must be met to be able to choose the IRNR:

  • Moving to Spain must be a consequence of an employment contract
  • Not having lived in Spain during the last 10 years.
  • The work must be undertaken for a company that is resident in Spain or a permanent establishment of a non-resident company in Spain.