Tax benefits for people with disabilities in Spain: overview
There are numerous tax benefits for people with disabilities in Spain.
In this specialist article, you as a person affected by a disability will get a detailed look at the most important reductions, such as tax deductions, allowances and tax exemptions that the Spanish system of taxation offers.
Whether for income tax, VAT, vehicle tax, vehicle registration tax or inheritance and gift tax, there are various ways to reduce your tax burden.
It is therefore important to become familiar with these regulations in order to make the most of the tax benefits in Spain.
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Reductions and allowances for income tax in Spain
When am I a person with a disability for income tax purposes?
For the purposes of Spanish income tax, people with disabilities are those who can prove a degree of disability of 33 % or more. Art. 72 Reglamento IRPF
How is the degree of disability accredited?
You must prove the degree of disability, the need for third-party assistance or reduced mobility with a certificate issued by the competent body of the Autonomous Community or by the IMSERSO (for the cities of Ceuta and Melilla).
The procedure for recognising and qualification of the degree of disability is carried out in accordance with Spanish Decree 888/2022 of 18 October. You can find out more about this in my specialist article: Disability recognition in Spain: steps, procedures and benefits
In the following cases, however, it is assumed that you have a accredited degree of disability:
a) With a degree equal to or greater than 33 %, if
- you receive a total, absolute or severe permanent disability pension from the Spanish Social Security (‘Seguridad Social’)
- you receive a pension from passive classes for retirement due to permanent disability or incapacity for service
b) With a degree of 65 % or more, if
- your disability has been declared by virtue of judicial resolutions, even if you do not reach this level.
Note
The recognition of the degree of dependency according to the Spanish Care Act is subject to a different area of competence, which does not meet the requirements of Article 72 of the Income Tax Regulation and does therefore not accredit this.
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What income is tax-free?
The following income is tax-free for people with disabilities in accordance with Art. 7 of the Spanish Income Tax Law and therefore does not have to be declared:
- Benefits for absolute permanent incapacity or major disability (‘Prestaciones por incapacidad permanente absoluta o gran invalidez’) from the Spanish Social Security (‘Seguridad Social’) or from the institutions that replace it.
Note
If certain conditions are met, foreign disability pensions are also covered by this exemption.
- Pensions due to incapacity for work or permanent disability from the Passive Classes Scheme (‘régimen de Clases Pasivas’), provided that the pensioner is completely excluded from any profession or trade, as well as pensions from the Passive Classes Scheme for grandchildren and siblings who are unable to work.
- The benefits received by public institutions for hosting people with disabilities or the corresponding amounts provided for in the regulations of the Autonomous Communities.
- Financial aid granted by public institutions to persons with a degree of disability of at least 65 % to finance their stay in residential homes or day centres, if the other income does not exceed a certain income limit.
- Labour income from benefits received by persons with disabilities in the form of income corresponding to contributions to the system of social provision set up specifically for their benefit.
- Labour income from contributions to protected assets of people with disabilities is also tax-exempt.
In the case of labour income, an annual upper limit is set for the exemption.
- Public financial benefits in connection with care in the family environment and personal assistance derived from Spanish law on Care for People in Situations of Dependency.
Capital gains and losses
Art. 33.3 y 4.b) Ley del IRPF
Capital gains resulting from the transfer of the habitual residence of persons who are in a situation of grave or severe need of care in accordance with the Spanish Care Act are tax-free.
It is also estimated that there are no capital gains or losses for contributions to protected assets set up in favour of people with disabilities.
What are the allowances for disability in Spain?
Art. 60 y 61 Ley IRPF
The disability tax-exempt threshold (‘Mínimo por discapacidad’) can be claimed in addition to the basic personal allowance and the allowances for relatives in ascending or descending line.
It does not reduce income, but is not subject to income tax as part of the tax base, as it is taxed at zero rate.
The allowance for disability in Spain is made up of the sum of the following minimum:
- The taxpayer’s disability allowance (‘Mínimo por discapacidad del contribuyente’) and
- Disability allowance of relatives in ascending or descending line (‘Mínimo por discapacidad de ascendientes o descendientes’)
How high is the disability allowance?
The amount of the allowance in Spain depends on the degree of disability and can be increased if certain conditions for assistance costs are met.
a) The taxpayer’s disability allowance is € 3,000 per year and € 9,000 per year for a degree of disability of 65 % or more.
This allowance is increased by € 3,000 for support costs if proof is provided that the taxpayer is dependent on the help of third parties, has limited mobility or has a degree of disability of 65% or more.
b) The allowance for disability of relatives in ascending or descending line is € 3,000 per year and € 9,000 for a degree of disability of 65 % or more.
This minimum amount is also increased by € 3,000 for each ancestor or descendant in the case of assistance costs in accordance with the above conditions.
Some Autonomous regions (e.g. Andalusia, Balearic Islands, Valencia, Madrid) have set higher allowances for disability.
The minimum allowance does not apply if the relatives in ascending or descending line submit an income tax return with an income of more than € 1,800.
What tax deductions are there due to disability?
Reduction of earned income:
Art. 19.2.f) de la Ley del IRPF
With regard to earned income, expenses for geographical mobility are deductible in Spain in the amount of € 2,000 if the habitual place of residence is changed due to a change of job.
In addition to the above-mentioned costs, active employees with disabilities are entitled to an increase of the following amounts:
| Degree of disability | Reduction for active workers with disability |
|---|---|
| Equal to or greater than 33% and less than 65% | 3.500 € |
| Equal to or greater than 33% and less than 65% who prove they need help from third parties or have reduced mobility | 7.750 € |
| Equal to or greater than 65% | 7.750 € |
Reduction of the income tax base:
The following contributions can be deducted from the tax base in accordance with the maximum limits:
a) Contributions to the protected assets of persons with disabilities (‘aportaciones a patrimonios protegidos de personas con discapacidad’): Art. 54 Ley IRPF y 71 Reglamento IRPF
- € 10,000 per year for each contributor and for all protected assets to which the contributions are made.
- € 24,250 per year for all deductions made by all persons contributing to the same protected assets.
b) Contributions to systems of social provision (‘sistemas de previsión social’) established in favour of people with disabilities: Art. 53 Ley IRPF; 50 y 51 Reglamento IRPF
- € 24,250 per year for contributions made by people with disabilities.
- € 10,000 per year for contributions made by each of the relatives, by guardians or guardianship representatives or the spouse of the person with disabilities.
- € 24,250 per year, taking into account both the contributions of the person with a disability and the contributions of all other persons who make contributions in favour of the same person with a disability.
Reduction for joint tax return:
In the case of the following family units, the tax base is also reduced, provided it is not negative: Art. 84.2.3º y 4º Ley IRPF
- Family units with both spouses: Reduction of € 3,400 per year
In the case of joint tax returns for family units that include both spouses who are not legally separated and, if applicable, incapacitated adults who are subject to parental custody by a court or, if applicable, adult children with disabilities for whom a representative guardianship has been established
- Single-parent family units: Reduction of € 2,150 per year
In the case of joint tax returns for a family unit consisting of the father or mother and adult children with disabilities who are subject to parental custody or representative guardianship and who live together with one or the other
Deductions from the tax liability:
Deductions from the tax liability can be claimed for dependant family members with disabilities when submitting the income tax return.
This tax deduction is applied regardless of whether the tax liability is positive, negative or zero.
If you fulfil the requirements, you can also apply for payment in advance.
What deductions are there and what is the maximum amount?
- Deduction for dependant relatives in ascending or descending line with disabilities (‘descendientes y ascendientes con discapacidad a cargo’)
Up to € 1,200 per year for each relative with a disability, provided they are entitled to the allowance for relatives in ascending or descending line
- Deduction for a dependent spouse with a disability (‘cónyuge con discapacidad a cargo’)
Up to € 1,200 per year for the spouse with a disability who is not legally separated, provided their annual income without exemptions does not exceed € 8,000 and they are not entitled to the aforementioned deductions for relatives in ascending or descending line with a disability.
The following general requirements must be met for this tax deduction:
- Carrying out a self-employed or non-self-employed activity and registration with the Social Security (‘Seguridad Social’) or the mutual association (‘mutualidad’)
- Receipt of a contributory benefit and social assistance from the unemployment protection system.
- Receiving a pension from Social Security or the System of Passive Classes (‘Clases Pasivas’)
- Be a self-employed person who is not integrated into the RETA Social Security regime and who receives benefits similar to those mentioned above from alternative mutual insurance societies.
Reductions in Spanish value added tax
Exempted services and acquisitions:
The following operations are exempt from Spanish VAT (‘Impuesto sobre el valor añadido’ – IVA for short):
- The intra-Community acquisition and importation of goods specifically intended for the education, employment or social promotion of people with disabilities by duly authorised institutions or bodies,
- provided that the main activity of these organisations is the education or support of persons with disabilities and the supply is free of charge and for non-commercial purposes. Art. 26 Dos y art. 45 de la Ley 37/1992
- Social assistance services for persons with disabilities provided by public bodies or private institutions of a social nature that meet the conditions laid down in the tax regulations. Art. 20 Uno. 8º de la Ley 37/1992
What reduced IVA rates are available?
For people with disabilities, the following reduced VAT rates apply in Spain: Art. 91, Ley 37/1992
IVA rate of 4%:
a) For services provided by private establishments to people in need of care in connection with:
- Telecare,
- home help,
- day and night centres and
- residential care
b) For the purchase of prostheses, orthoses and internal implants for people with disabilities
c) For the purchase, adaptation or repair of vehicles for people with disabilities
The following vehicles are affected if certain conditions are met:
- Vehicles designed for persons with reduced mobility (unladen weight not exceeding 350 kg and speed not exceeding 45 km/h) and wheelchairs for the exclusive use of persons with disabilities
- Special taxis intended for the transport of persons in wheelchairs
- Motor vehicles for the regular transport of persons in wheelchairs or with reduced mobility, regardless of who is the driver of the vehicle.
IVA rate of 10 %:
For the purchase of medical devices, appliances and other products which, due to their objective characteristics, are intended to alleviate or treat deficiencies and which are intended exclusively for the personal use of persons with physical, mental, intellectual or sensory deficiencies.
Here are some examples:
- Glasses, frames for glasses, contact lenses and the products necessary for their use, care and maintenance
- Therapy chairs and wheelchairs as well as walking aids and cranes for the transport of people with disabilities
- Lifting platforms, wheelchair lifts, wheelchair adapters for stairs and portable ramps
- Devices for home dialysis and respiratory treatment
- Devices for self-monitoring and treatment of diabetes
- Cannulas for tracheotomy and laryngectomy
- Aids for dressing and undressing, washing, bathing and showering,…
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Exemptions from vehicle registration tax in Spain
Vehicles for people with reduced mobility are not subject to the Spanish registration tax (‘Impuesto de Matriculación’ – IEDMT). Art. 65.1.a) 6º Ley 38/1992
A vehicle for persons with reduced mobility is a vehicle whose unladen weight does not exceed 350 kg and which, due to its construction, cannot reach a speed of more than 45 km/h on level ground and which is specially designed and constructed (and not merely adapted) for use by persons with a physical disability or handicap. In terms of the other technical characteristics, they are equivalent to three-wheeled mopeds.
Motor vehicles registered in the name of people with disabilities for their exclusive use are exempt from registration tax in Spain, provided that the following conditions are met: Art. 66.1.d) Ley 38/1992
- At least four years must have passed since the registration of another vehicle under similar conditions.
- They may not be the subject of a subsequent ‘inter vivos’ transfer within four years of their registration.
- The application of this tax exemption is subject to prior recognition by the Spanish tax authorities.
- Prior recognition is requested by means of Modelo 05, accompanied by the disability certificate and the ‘Ficha Técnica del vehículo’.
Registration of the vehicle with the competent Spanish transport authority is subject to accreditation of the aforementioned prior recognition by the tax authorities.
Exemptions from vehicle tax in Spain
The following motor vehicles are exempt from Spanish road tax (‘Impuesto sobre Vehículos de Tracción Mecánica’ – IVTM for short): Art. 93.e), Real Decreto Legislativo 2/2004
- Vehicles for persons with reduced mobility and
- Vehicles registered in the name of people with disabilities (at least 33 %) for their exclusive use.
In order to benefit from the aforementioned exemption from vehicle tax, the persons concerned must request the granting of this exemption from the competent municipal administration. With regard to point b), a certificate of disability must be presented and the intended use of the vehicle must be justified.
Once the exemption has been approve by the Spanish local authority, a document confirming the granting of the exemption will be issued.
Reductions in Spanish inheritance and gift tax
At the state level, the following additional allowances are available for persons with disabilities in the event of death: Art. 20. 2.a) Ley 29/1987
- With a degree of disability of at least 33% and less than 65 %: € 47,858.59
- For a degree of disability of 65 % or more: € 150,253.03
Numerous Autonomous Communities have also provided tax benefits for people with disabilities.
In the case of inheritance tax (‘Impuesto sobre Sucesiones’), some of them have practically cancelled the taxation of people with a certain degree of disability (e.g. Valencia). However, most Autonomous Communities have concentrated on increasing the reductions or allowances established in state legislation.
As far as the gift tax (‘Impuesto sobre Donaciones’) is concerned, two regions in particular have generally benefited people with disabilities: the Valencia region and Castilla-La Mancha.
