SPAIN: An introduction to Private Wealth Law

Spain’s tax landscape in 2025 is defined by a mix of economic recovery, political adjustment, and a push toward digitisation. For individuals and businesses operating in the country, this means navigating not only evolving tax rules but also broader trends that are reshaping how governments fund public services, regulate cross-border activity, and enforce compliance.

Economic Backdrop: Recovery Under Pressure

Entering 2025, Spain’s economic outlook remains mixed. Inflation is easing and the labour market is holding steady, but concerns about weak growth and persistent fiscal deficits are mounting. The European Central Bank’s cautious rate cuts have stabilised markets, yet borrowing costs remain high for households and businesses.

High public debt continues to shape fiscal policy, forcing the government to balance social support with the need to raise revenue. As EU recovery funds approach their final phase, pressure is growing to ensure sustainable public finances through more robust tax collection and oversight.

In this context, the tax environment has become notably stricter. Businesses are subject to increased audit scrutiny, often powered by AI risk analysis. For high-net-worth individuals, entrepreneurs, and international residents, tax planning is increasingly complex. The message from authorities is clear: transparency and cooperation are expected, and enforcement is becoming more sophisticated, strict and severe.

A Changing Legislative Environment

While there have been no dramatic overhauls of the Spanish tax system recently, several incremental changes are worth noting.

Firstly, the extension and refinement of the Beckham Law (Special Regime for Inpatriates) has sparked renewed interest among foreign professionals relocating to Spain. The regime now allows broader eligibility and more generous exemptions, which is boosting Spain’s appeal as a destination for remote work, tech talent and high-earning executives. However, this surge in applications has also led to a significant increase in denials and audits, with Spanish tax authorities applying stricter scrutiny in their assessments of eligibility and compliance.

Secondly, there has been ongoing debate and adjustment around the Solidarity Tax on Large Fortunes, which came into effect in late 2022 as a temporary measure. While officially still in force, its future remains uncertain, as legal and political challenges continue. For now, wealthy individuals must plan with caution, especially those residing in regions like Madrid and Andalucía, where wealth tax is otherwise mitigated.

At the EU level, Spain is aligning with global initiatives like Pillar Two (global minimum corporate tax), which is likely to reshape tax strategies for multinational groups operating in or through Spain. Though implementation is staggered, the signal is clear: low-tax jurisdictions are under pressure, and Spain is positioning itself as a compliant, but still competitive, location.

Key Trends: Digitalization, Mobility, and Complexity

One of the most impactful developments in recent years is the digital transformation of Spain’s tax system. Electronic invoicing, real-time reporting (SII), and pre-filled returns have reshaped how taxpayers interact with the administration. While these tools boost efficiency, they also demand that businesses and individuals keep systems current and compliant.

Taxpayers with cross-border lives—digital nomads, expats, remote workers—face growing complexity. Spain offers attractive regimes like the Beckham Law, but eligibility, timing, and procedural nuances can be challenging. Conflicts between domestic residency rules and international treaties add to the uncertainty.

Family-owned businesses and entrepreneurs often struggle between the desire for simplification and the reality of a layered, regionally fragmented tax system. Variations between autonomous communities in wealth, inheritance, gift, and income taxes make personalized planning essential.

The 2025 Tax Control Plan: A Shift Toward Proactive Compliance

A central element shaping Spain’s fiscal environment in 2025 is the government’s newly published Plan de Control Tributario, which outlines the tax authority’s key priorities for the year. More than just an internal roadmap, the plan reflects a broader shift in how the Spanish administration is approaching tax compliance: with greater precision, technological support, and taxpayer engagement.

At its core, the plan highlights a continued effort to modernize the relationship between tax authorities and taxpayers. Digital assistance tools—such as virtual advisors for census procedures and imports—are being rolled out to make the system more accessible and user-friendly. Simultaneously, pre-filled data for both individuals and companies is being expanded, making self-assessment and reporting more straightforward and reducing inadvertent non-compliance.

The introduction of Veri*factu, a new mandatory invoicing framework, is a clear step in the digitalization of business obligations. Designed to standardize billing and increase traceability, it primarily targets small and medium-sized enterprises. This move is aligned with a European trend toward real-time reporting, and marks a significant change in the way business is done—especially for those not yet accustomed to digital operations.

In parallel, the new mechanism allowing for rectifying self-assessments of major taxes is a sign that the administration is evolving toward a more flexible, collaborative model. Rather than penalizing every mistake, the system now acknowledges the reality of complex filings and offers a way for taxpayers to proactively amend errors without triggering lengthy administrative reviews.

From an enforcement perspective, however, the tone is firm. The AEAT plans to use advanced tools—particularly data analytics and behaviour-based risk profiling—to identify non-compliance early. Control efforts in the collection phase will be intensified, and the administration has reiterated its intention to use judicial channels to authorize inspections when necessary, especially in cases involving premises considered to be tax domiciles.

Altogether, the 2025 Plan reflects a dual strategy: reduce friction for those who comply, and intensify pressure on those who don’t. For both individuals and companies, this means the cost of staying informed and up to date is far lower than the cost of falling behind.

Challenges and Opportunities for Clients

Clients looking to invest, relocate, or do business in Spain must weigh several factors:

• • Complexity and fragmentation: While Spain is part of the EU and OECD, it still maintains many regionally applied rules, creating challenges in areas like wealth and inheritance planning.
  • Scrutiny and enforcement: Both domestic authorities and EU bodies are tightening control, particularly on international transactions and aggressive tax optimisation. There has been a noticeable rise in audits and sanctions, reflecting a broader push for stricter tax control across jurisdictions.
  • Mobility incentives: On the positive side, Spain remains proactive in attracting international talent and investment, offering tax incentives for newcomers and investors.
  • Green and digital sectors: Businesses in sustainable energy and digital infrastructure may benefit from EU-funded programs and tax credits aimed at transformation and innovation.
  • Digital compliance obligations: As digital tools become mandatory, companies will need to adapt their invoicing, reporting, and compliance strategies—or risk penalties and reputational damage.

Looking Ahead

The direction of Spain’s fiscal system is clear: more transparency, more digitization, and more scrutiny, with more frequent audits and severe enforcement. These changes bring challenges, especially for those unfamiliar with Spain’s decentralised and nuanced tax landscape. But they also present opportunities—particularly for those who plan ahead, embrace digital tools, and align with the broader trends shaping Europe’s fiscal future.

Whether you are a foreign investor, an entrepreneur, or an executive considering relocation, understanding the current tax environment is key to making sound decisions. In 2025 and beyond, success in Spain’s tax system will come not from navigating loopholes, but from staying informed, agile, and compliant.