Spanish Taxation

Taxation on investments in Spain is at the rate of 18%,  This is 18% of the interest or of the growth.  However, as with other european countries, Spain recognises the benefit of investment through insurance linked investment products.  This means that you can pay less tax by comparison to another type of investment which produces the same return.

These products are taxed in the following manner: 

1. No personal tax for the holder to pay until a withdrawal is made.  This can give an advantage that the investment can grow free of personal tax giving a better overall return by comparision to a non insurance linked product.
2. For each withdrawal, only the gain element is taxed.  This leads to a lower rate of tax by comparison to other investments, especially for those people seeking regular withdrawals to supplement their income. An example of how this is calculated is given below.