Direct Taxes

Private Income Tax (PFEZ) (2019 Campaign)

Type of Tax Direct
Collected by Provincial Government
Zergaduna Natural persons
Tax base Annual income and returns
Abatements in the base Summary table
Net tax base Calculated by subtracting the corresponding abatements from the tax base (see above table)
Tariff or Rate Summary table
Liability Calculated by applying the tax rate to the net tax base
Deductions Summary table
Amount payable Calculated by subtracting the corresponding deductions from the tax liability

This is a direct tax which is paid on an annual basis; the tax returns are submitted in spring of the year following the year in which the income or returns were made, coinciding with the income declaration campaign. Before the period for submitting tax returns begins, a table is published with withholdings on income from work, adjustment coefficients for calculating capital gains, changes to the regulations, etc.

In Gipuzkoa, the tax is collected by the provincial government.

What is this tax levied on?

Private Income Tax is levied on income obtained during the calendar year by persons resident in Gipuzkoa. The tax is governed by the principles of equality, generality and progressivity and takes into account the individual and family circumstances of the taxpayer.

How is the amount payable calculated?

  1. Tax base: Returns or Income. In this section, we need to look at five aspects; we then need to add up the results of each one:
    1. Earnings on employment (salaried work).
    2. Returns on real estate (yields obtained from rental of premises, homes, etc.).
    3. Capital gains (income from bank interest, yields of shares in companies, etc.).
    4. Returns on economic activity (self-employment).
    5. Earnings and losses in equity (sale of homes, premises, shares, etc..; or earnings and losses resulting from donations).
  2. Abatements in the base: Depending on the individual and family situation, different abatements are applied to the tax base. More information in: Summary table
  3. Net tax base: Calculated by subtracting the corresponding abatements from the tax base.
  4. Tariff or Rate: Percentage to be applied to the net tax base. To know what percentage is to be applied, look up the Summary table
  5. Liability: Calculated by applying the corresponding tax rate to the net tax base.
  6. Deductions: These are abatements for different reasons that can be applied to the tax liability. More information in: Summary table
  7. Amount payable: Calculated by subtracting the corresponding deductions from the tax liability.


Edurne is an IT engineer working at the company Teknik. She also runs her own IT consultancy. Over the last year, her income or revenue, once the relevant reductions have been subtracted is 42,750€

When it comes to applying deductions, we need to bear in mind that Edurne has a 3-year old child.

How much does she have to pay in Personal Income Tax?

We'll calculate this as follows:

  1. Tax base: €42,750 (Result of annual income after subtracting the abatements).
  2. Now let's calculate the tax rate. We look at the Summary table, in the Rate section:
    1. The tax base is €42,750. In actual fact, it is between 32,060 and 48,090 (based on the table for 2020) and she therefore comes under the 32,060 bracket.
    2. The full tax liability is: €8,175.30
    3. The amount above the tax base is: 42,750 - 32,060 = 10,690. Applying the corresponding rate, this means: 35% of 10.690. In other words 3,741.50
    4. The total tax due is therefore: 8,175.30 + 3,741.50= 11,916.80
    5. The general minoration is now applied to this: 11,916.80 – 1,432 = 10,484.80
  3. Deductions:
    1. Deduction for individual and family circumstances:
      1. First child: 603
      2. For a child under 6 years of age: 347
  4. Personal Income Tax to be paid: 10,484.80 - 603 - 347 = €9,534.80

Time to get working!