🇪🇸 vs 🇮🇹

Spain vs Italy Tax Comparison 2026

Complete Mediterranean tax system comparison: progressive rates, regional taxes, social security contributions, and special expat programs including Beckham Law and Italian flat tax regimes

Quick Tax Comparison

Effective tax rates at different income levels (including social security)

Annual Income 🇪🇸 Spain (Standard) 🇪🇸 Spain (Beckham Law) 🇮🇹 Italy (Standard)
€35,000 ~28%
Take-home: €25,200		 ~24%
Take-home: €26,600		 ~29%
Take-home: €24,850
€65,000 ~35%
Take-home: €42,250		 ~24%
Take-home: €49,400		 ~37%
Take-home: €40,950
€100,000 ~42%
Take-home: €58,000		 ~24%
Take-home: €76,000		 ~43%
Take-home: €57,000

💡 Key Insight

Spain's Beckham Law is a game-changer for qualifying expats. If you qualify for this special regime, you can save €7,000-€18,000 annually compared to standard Spanish taxation, and even more compared to Italy.

For retirees: Italy's 7% flat tax regime for those moving to southern towns offers unbeatable tax savings, potentially reducing a €50,000 pension tax bill from €15,000+ to just €3,500.

Tax System Overview

Understanding Spanish and Italian taxation structures

🇪🇸 Spain

  • 📊 National Rates: 19%, 24%, 30%, 37%, 45%, 47%
  • 🏛️ System: National + Autonomous Community
  • 💼 Social Security: ~30% total (6.35% employee)
  • 🌟 Beckham Law: 24% flat for 6 years (eligible expats)
  • 📅 Tax Year: January - December
  • 📋 Filing Deadline: June 30
  • 💰 Tax-Free Allowance: €5,550 (varies by region)
  • 🏘️ Regional Variation: Madrid (lowest) to Catalonia (highest)

🇮🇹 Italy

  • 📊 National Rates (IRPEF): 23%, 27%, 38%, 41%, 43%
  • 🏛️ System: National + Regional + Municipal
  • 💼 Social Security (INPS): ~33% total (9.19% employee)
  • 🌟 Retiree Flat Tax: 7% for southern regions
  • 📅 Tax Year: January - December
  • 📋 Filing Deadline: September 30
  • 💰 Tax-Free Allowance: €8,500 (no-tax area)
  • 🏘️ Surcharges: Up to 3.33% regional + 0.9% municipal

Detailed Tax Rate Comparison

Breaking down income tax brackets and progressive rates

Category 🇪🇸 Spain 🇮🇹 Italy
Income Tax Brackets National Tax 2026:
19% (€0-€12,450)
24% (€12,450-€20,200)
30% (€20,200-€35,200)
37% (€35,200-€60,000)
45% (€60,000-€300,000)
47% (€300,000+)
+ Regional tax variations 		IRPEF 2026:
23% (€0-€28,000)
27% (€28,000-€50,000)
38% (€50,000-€100,000)
41% (€100,000-€175,000)
43% (€175,000+)
+ Regional/municipal surcharges
Social Security Contributions Employee: 6.35%
Employer: 23.6%
Total: ~30%
Covers healthcare, unemployment, pension 		Employee: 9.19%
Employer: 23.81%
Total: ~33%
Covers healthcare, unemployment, pension
Regional/Local Taxes Autonomous communities can modify rates
Madrid: Most favorable (lower rates)
Catalonia: Highest (surcharges up to 3%)
Variation of 3-5% between regions 		Regional: 0.9% - 3.33%
Municipal: Up to 0.9%
Combined surcharge: 3-4%
Applied on top of IRPEF
Special Expat Programs Beckham Law:
24% flat tax on income up to €600,000
Duration: 6 years
Eligibility: New tax residents working in Spain
Must not have been Spanish tax resident in prior 5 years 		Retiree Flat Tax:
7% on foreign pension income
Duration: Up to 10 years
Location: Southern towns <20,000 population
Impatriates Regime:
70% income exemption for high-skilled workers
Capital Gains Tax Progressive rates on savings income:
19% (up to €6,000)
21% (€6,000-€50,000)
23% (€50,000-€200,000)
26% (€200,000+)
Separate from employment income 		26% flat rate on most financial assets
12.5% on government bonds
Flat taxation regardless of amount
Wealth Tax Impuesto sobre el Patrimonio:
0% - 3.5% on net assets >€700,000
Madrid: Effectively eliminated (99% reduction)
Varies significantly by region 		No general wealth tax
IVAFE: 0.2% on foreign financial assets >€5,000
Flat €100,000 for high-net-worth individuals in special regime
VAT / Sales Tax IVA:
Standard: 21%
Reduced: 10% (food, hospitality)
Super-reduced: 4% (basics) 		IVA:
Standard: 22%
Reduced: 10% (food, tourism)
Super-reduced: 4% (essentials)
Property Tax IBI: 0.4% - 1.3% of cadastral value
Average: €500-€1,500 annually
Varies by municipality 		IMU: 0.4% - 1.06% of cadastral value
Average: €800-€2,000 annually
Varies by municipality and property type

Real-World Examples

Compare take-home pay for different income levels and scenarios

💻 Example 1: Digital Nomad / Remote Worker

Profile: Software developer, €35,000 annual income, single, no dependents
Location: Spain (Madrid) vs Italy (Milan)
🇪🇸 Spain (Beckham Law)
Gross Income: €35,000
Income Tax (24%): €6,177
Social Security (6.35%): €2,223
Total Tax: €8,400 (24%)
Take-home: €26,600
WINNER - Best for expats!
🇮🇹 Italy (Standard)
Gross Income: €35,000
IRPEF + Surcharges: €6,935
Social Security (9.19%): €3,217
Total Tax: €10,152 (29%)
Take-home: €24,848

Difference: Spain (Beckham Law) saves €1,752/year compared to Italy

👔 Example 2: Professional (Manager, Consultant, Senior Developer)

Profile: Senior professional, €65,000 annual income, single
Location: Spain (Barcelona) vs Italy (Rome)
🇪🇸 Spain (Beckham Law)
Gross Income: €65,000
Income Tax (24%): €11,471
Social Security (6.35%): €4,128
Total Tax: €15,599 (24%)
Take-home: €49,401
WINNER - Huge savings!
🇮🇹 Italy (Standard)
Gross Income: €65,000
IRPEF + Surcharges: €18,107
Social Security (9.19%): €5,974
Total Tax: €24,081 (37%)
Take-home: €40,919

Difference: Spain (Beckham Law) saves €8,482/year - that's an extra €707/month!

🏆 Example 3: High Earner (Executive, Business Owner)

Profile: Executive or successful entrepreneur, €100,000 annual income
Location: Spain (Madrid) vs Italy (Milan)
🇪🇸 Spain (Beckham Law)
Gross Income: €100,000
Income Tax (24%): €17,648
Social Security (6.35%): €6,350
Total Tax: €23,998 (24%)
Take-home: €76,002
WINNER - Massive advantage!
🇮🇹 Italy (Standard)
Gross Income: €100,000
IRPEF + Surcharges: €33,900
Social Security (9.19%): €9,190
Total Tax: €43,090 (43%)
Take-home: €56,910

Difference: Spain (Beckham Law) saves €19,092/year - that's €1,591/month extra!

🎯 Key Takeaway from Examples

The Beckham Law transforms Spain into the most tax-efficient Mediterranean destination for working expats.

  • At €35k: Save €1,752/year vs Italy (7% more take-home)
  • At €65k: Save €8,482/year vs Italy (21% more take-home)
  • At €100k: Save €19,092/year vs Italy (34% more take-home)

Without Beckham Law: Spain and Italy have very similar tax burdens, with Italy sometimes slightly lower for middle incomes due to broader tax brackets.

Who Should Choose Which Country?

Making the right decision based on your situation

🇪🇸 Choose Spain If...

  • ✓ You qualify for the Beckham Law - This is the #1 reason. Saves €7,000-€20,000+ annually
  • ✓ You're a young professional or entrepreneur moving to Spain for work (easier Beckham qualification)
  • ✓ You prefer Madrid or Barcelona - Better job markets and Madrid has the lowest taxes
  • ✓ You're a digital nomad with qualifying remote work - Spain's new digital nomad visa + Beckham Law is unbeatable
  • ✓ You value efficient bureaucracy - Spain's tax system is generally more streamlined than Italy's
  • ✓ You want to avoid wealth tax - Choose Madrid region (effectively eliminated)
  • ✓ You're earning €50k-€300k - Beckham Law's flat 24% is hugely beneficial in this range

🇮🇹 Choose Italy If...

  • ✓ You're a retiree/pensioner - The 7% flat tax for southern Italy is phenomenal for foreign pensions
  • ✓ You don't qualify for Spain's Beckham Law - Without it, Italy and Spain are similar in tax burden
  • ✓ You're attracted to southern Italian lifestyle - Towns like Calabria, Sicily, Sardinia offer low living costs + 7% tax
  • ✓ You earn under €30k - Italy's broader first bracket (23% up to €28k) can be slightly better
  • ✓ You prioritize cultural heritage and food - While subjective, Italy's offerings are exceptional
  • ✓ You're a high-net-worth individual - Italy's flat €100k annual tax option for wealthy expats can be attractive
  • ✓ You prefer smaller, authentic towns - Italy's retiree program encourages this with major tax benefits

⚖️ The Verdict: Spain vs Italy Taxes

For Working Expats (Employees, Entrepreneurs, Remote Workers):

🏆 Spain wins decisively if you qualify for Beckham Law

The 24% flat tax for 6 years makes Spain the most tax-efficient Mediterranean country for middle-to-high earners. You'll save €5,000-€20,000+ annually compared to Italy's standard progressive rates.

For Retirees and Pensioners:

🏆 Italy wins overwhelmingly with 7% flat tax

If you're willing to relocate to southern Italy (population <20,000), the 7% flat tax on foreign pension income is unbeatable. A €50,000 pension would be taxed at just €3,500 vs €12,000-€15,000 in Spain.

Without Special Regimes:

⚖️ Roughly equal - slight edge to Italy for lower incomes

Standard taxation is remarkably similar. Italy has slightly broader brackets which can benefit those earning €30k-€50k, but regional and municipal surcharges often eliminate this advantage. The difference is typically 1-3%.

Pros and Cons

Advantages and disadvantages of each Mediterranean tax system

🇪🇸 Spain

✓ Advantages

  • Beckham Law offers exceptional 24% flat tax for 6 years
  • Madrid region has effectively eliminated wealth tax
  • Digital nomad visa with tax benefits available
  • Generally more efficient tax administration than Italy
  • Lower property taxes (IBI) than most Italian regions
  • Clearer, more predictable tax rules and deadlines
  • Strong expat community and English-language tax services

✗ Disadvantages

  • Without Beckham Law, top rates reach 47% (higher than Italy's 43%)
  • Wealth tax exists in most regions (except Madrid)
  • Some autonomous communities have very high combined rates (Catalonia)
  • Capital gains rates can reach 26% (progressive)
  • Beckham Law only lasts 6 years, then standard rates apply
  • No special tax programs for retirees (unlike Italy's 7%)

🇮🇹 Italy

✓ Advantages

  • Outstanding 7% flat tax for retirees in southern regions
  • Lower top marginal rate (43% vs Spain's 47%)
  • Broader tax brackets benefit middle-income earners
  • No wealth tax for most residents (only IVAFE on foreign assets)
  • Flat 26% capital gains rate (simpler, often lower for high earners)
  • Impatriates regime offers 70% exemption for high-skilled workers
  • Higher tax-free allowance (€8,500 vs Spain's €5,550)

✗ Disadvantages

  • No equivalent to Beckham Law for working expats
  • Regional and municipal surcharges add 3-4% to effective rates
  • Higher social security contributions (9.19% vs Spain's 6.35%)
  • Complex bureaucracy and slower tax administration
  • Property taxes (IMU) generally higher than Spain
  • VAT slightly higher (22% vs Spain's 21%)
  • Tax rules vary significantly by region, creating confusion

Frequently Asked Questions

Common questions about Spain vs Italy taxation

Q: Which country has higher taxes overall: Spain or Italy?
Overall, Spain tends to have slightly higher maximum tax rates (47% vs Italy's 43%), but Italy often has higher effective tax rates due to regional and municipal surcharges adding 3-4%. For middle-income earners (€35,000-€65,000), effective rates are very similar (28-37%). Spain offers better expat tax benefits through the Beckham Law (24% flat for 6 years), while Italy has attractive programs for retirees (7% flat tax) and pensioners. Without special regimes, the difference is typically only 1-3%.
Q: What is Spain's Beckham Law and how does it compare to Italian expat programs?
Spain's Beckham Law allows qualifying expats to pay a flat 24% tax rate on Spanish-source income (up to €600,000) for 6 years, significantly reducing the tax burden compared to standard progressive rates of 19-47%. To qualify, you must be a new tax resident who hasn't lived in Spain for the past 5 years, and you must move to Spain for work reasons. Italy offers a flat 7% tax rate for retirees moving to southern regions with populations under 20,000, and a special impatriates regime with 70% income exemption for high-skilled workers. The Beckham Law is more accessible for working professionals earning €40k-€300k, while Italy's programs favor retirees and specific high-skilled sectors.
Q: How do social security contributions compare between Spain and Italy?
Spain's total social security contributions average around 30% (employer and employee combined), with employees typically paying 6.35% and employers paying 23.6%. Italy's contributions are slightly higher at approximately 33% total, with employees paying around 9.19% and employers contributing 23.81%. Both systems provide comprehensive benefits including universal healthcare, unemployment insurance, pension contributions, and maternity/paternity leave. The practical difference for employees is about 2.84% of gross income, which on a €50,000 salary amounts to roughly €1,420 per year more in Italy. Both countries offer excellent healthcare and social benefits, so the slightly higher Italian contribution is offset by comparable service quality.
Q: Do regional taxes significantly affect the total tax burden?
Yes, regional variations are significant in both countries and can add or subtract 5-8 percentage points from your effective tax rate. In Spain, autonomous communities can modify tax rates and deductions. Madrid is the most tax-friendly (lower rates plus wealth tax elimination), while Catalonia is among the highest with combined rates reaching 50%+ for high earners. Italy has regional income tax surcharges (addizionale regionale) up to 3.33% and municipal surcharges (addizionale comunale) up to 0.9%, which together can add 3-4% to your effective tax rate. These are applied on top of national IRPEF rates. The choice of region/city can be as important as the choice of country - Madrid vs Catalonia can differ by more than Spain vs Italy on average.
Q: Which country is better for digital nomads?
Spain is generally more favorable for digital nomads, especially those earning €35,000-€65,000 annually. Spain recently introduced a digital nomad visa (valid for up to 5 years) that can be combined with the Beckham Law for qualifying individuals, resulting in a 24% flat tax rate. This is substantially better than Italy's standard progressive taxation. For a digital nomad earning €50,000, Spain with Beckham Law means ~€38,000 take-home vs Italy's ~€31,500 - a difference of €6,500 annually (21% more). Without Beckham Law qualification, both countries have similar effective rates (28-32%) for typical digital nomad incomes. Spain also has better infrastructure in cities like Barcelona and Valencia that cater to remote workers, along with growing coworking spaces and English-speaking services.
Q: Are there wealth taxes in Spain and Italy?
Spain has a wealth tax (Impuesto sobre el Patrimonio) that varies significantly by autonomous community. National rates range from 0% to 3.5% on net assets over €700,000 (€1 million in some regions like Valencia). However, Madrid has effectively eliminated its wealth tax through a 100% reduction, making it a tax haven for wealthy residents. Catalonia and other regions maintain the full wealth tax. Italy abolished its general wealth tax (IMU on primary residences) but has an IVAFE tax of 0.2% on foreign financial assets exceeding €5,000. High-net-worth individuals who opt for Italy's flat-tax regime pay a substitute tax of €100,000 annually instead of normal income tax, plus €25,000 per additional family member. For wealthy individuals, Madrid (Spain) or Italy's flat-tax regime are the most favorable options.
Q: How do tax rates compare for retirees?
Italy offers significantly better tax treatment for retirees through its 7% flat tax regime. Retirees moving to southern Italian municipalities with populations under 20,000 can pay just 7% tax on foreign-source pension income for up to 10 years. For a retiree with a €50,000 foreign pension, this means paying only €3,500 in tax vs €12,000-€15,000 under Spain's standard progressive rates (which apply to pension income the same as employment income). Spain offers no special tax treatment for retirees - pension income is taxed at the standard progressive rates of 19-47%, though some autonomous communities offer minor deductions for pensioners. The Italian program is one of Europe's most generous retirement tax incentives. However, it requires relocating to smaller southern towns, which may not suit everyone's lifestyle preferences. For retirees prioritizing tax efficiency, Italy is the clear winner.
Q: What about capital gains tax?
Spain taxes capital gains using progressive rates on a separate scale from employment income: 19% (up to €6,000), 21% (€6,000-€50,000), 23% (€50,000-€200,000), and 26% (over €200,000). Italy applies a simpler flat 26% capital gains tax (imposta sostitutiva) on most financial assets, with a reduced 12.5% rate on government bonds. For smaller gains under €50,000, Spain is more favorable with rates of 19-21% vs Italy's flat 26%. For large gains over €200,000, both countries converge at 26%. Spain offers some tax relief for reinvestment and primary residence sales (up to €400,000 exemption if over 65 and downsizing). Italy also exempts primary residence sales under certain conditions. Both countries tax crypto as capital gains. Overall, Spain's progressive approach benefits small investors, while Italy's flat rate provides certainty and can be better for very large one-time gains.
Q: Which country has better tax treaties to avoid double taxation?
Both Spain and Italy have extensive double taxation treaty networks and offer robust protection against double taxation. Italy has tax treaties with over 100 countries, while Spain has agreements with more than 90 nations, covering virtually all major economies. Both countries follow OECD Model Tax Convention guidelines and offer foreign tax credits for taxes paid abroad. The effectiveness of avoiding double taxation depends primarily on your country of origin rather than choosing Spain vs Italy - both will have similar treaty provisions with countries like the USA, UK, Canada, Australia, Germany, etc. Spain's treaties sometimes have slightly more favorable treatment for pension income, while Italy's treaties occasionally offer better rates for dividend and interest income. This is generally a neutral factor in the Spain vs Italy comparison - both provide adequate protection, and you should review the specific treaty between your home country and your destination.
Q: How do healthcare and social benefits compare given the tax burden?
Both Spain and Italy provide universal healthcare and comprehensive social benefits funded through social security contributions (included in the tax figures above). Healthcare quality is excellent in both countries - Spain ranks #7 and Italy ranks #2 globally according to WHO efficiency rankings. Both systems cover doctor visits, hospital stays, prescriptions (with small co-pays), and emergency care at no additional cost beyond social security contributions. Spain's healthcare system is slightly more decentralized and managed by autonomous communities, while Italy's is regionally administered with more variation in quality between north and south. Waiting times for non-emergency procedures are similar (2-8 weeks typically). Pension benefits, unemployment insurance, and parental leave are comparable. Given the similar tax burdens (without special regimes), you receive very similar benefits. The key difference: Spain's Beckham Law allows you to access full social benefits while paying significantly less tax (24% vs 35-42%), making it exceptional value if you qualify.

Calculate Your Exact Tax Burden

Use our free calculators to compare your specific situation in both Mediterranean countries

🇪🇸 Spain Tax Calculator 🇮🇹 Italy Tax Calculator

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