Reduce your tax burden in Spain: 2025 income tax guide

Advance your year-end closing and reduce your tax burden before 31 Decembre

Why does tax planning become critical in the final weeks of the year?

Tax optimisation in 2025 has become a strategic priority for companies, professionals and individuals seeking to reduce their tax burden legally and efficiently before year-end.

Acting too late frequently results in missed deductions, forfeited exemptions or decisions with irreversible financial consequences.

Spanish Personal Income Tax, regulated by Law 35/2006 (IRPF), provides multiple tax-saving opportunities that can only be applied if reviewed and executed before 31 December.

Timing is therefore a decisive factor in any effective tax optimisation strategy in 2025.

In this context, law firms such as Delaguía & Luzón, based in Valencia, support companies and professionals in year-end tax planning through the integration of tax law, corporate structure and asset analysis into a coherent, results-driven strategy.

Continuing to read may help avoid overlooking significant tax-saving opportunities before the close of the fiscal year.

Tax optimisation in 2025 for companies and professionals

Tax optimisation in 2025 offers particularly relevant opportunities for business income and professional activities, where structured planning can have a direct impact on taxable income.

One of the most significant measures is the tax exemption for work performed abroad under Article 7.p IRPF, which allows up to €60,100 per year to be exempt from taxation when legal requirements related to effective relocation and taxation in the destination country are met.

This exemption is especially relevant for companies with international mobility or professionals providing services outside Spain.

For self-employed individuals and liberal professionals, correctly applying deductions for professional association fees (up to €500 annually when mandatory) and legal defence expenses arising from labour disputes (up to €300) remains a key element of tax optimisation in 2025.

In practice, inadequate documentation continues to be one of the most common reasons these deductions are challenged by tax authorities.

Additionally, tax benefits for investment in Spanish startups strengthen their appeal in 2025.

A 50% deduction applies to investments in newly created companies, with a maximum annual base of €100,000, making this an effective tool for entrepreneurs and business angels seeking both diversification and tax efficiency, often linked to broader commercial law strategies.

Finally, optimising occupational pension plan contributions has become a central pillar of B2B tax optimisation in 2025.

Companies and professionals can significantly reduce their taxable base through the combination of individual contributions with simplified employment plans or company pension schemes, aligning tax planning with remuneration and retention strategies, frequently reviewed within audit and internal control processes.

Key measures for effective tax optimisation in 2025 before year-end

Effective tax optimisation in 2025 requires identifying actions that must be completed before 31 December.

At this stage of the year, it is especially important to review:

• Whether available deductions or exemptions require action before year-end to remain applicable.
• The correct classification and documentation of deductible expenses related to business activity or rental income.
• The timing of investments, pension withdrawals or asset transfers with tax implications.
• The consistency between personal tax planning and business or professional structures.

This structured review ensures that tax optimisation in 2025 goes beyond form-filling and becomes part of a deliberate, forward-looking strategy.

Property taxation, rentals, and asset transfers

Tax optimisation in 2025 is particularly relevant for taxpayers with real estate assets.

Rental income taxation allows the deduction of expenses such as community fees, property tax (IBI), depreciation, financing interest, repairs and agency fees, provided that proper documentation is available.

Recent rental reduction changes in high-demand areas (zonas tensionadas) allow the net rental income reduction to increase from the standard 50% up to 90%, subject to meeting legal requirements under Spain’s Housing Law.

Verifying whether a property qualifies is essential for correct tax optimisation in 2025.

Regarding asset transfers, offsetting capital gains and losses plays a critical role in year-end planning.

Reviewing pending losses or strategically selling other assets before 31 December may significantly reduce taxable gains.

Similarly, tax deferral through postponing a sale until 1 January 2026 can shift taxation to a later fiscal year, improving cash flow management.

Tax optimisation in 2025 for individuals and family planning

For individuals, tax optimisation in 2025 includes several high-impact decisions.

Notably, the 40% reduction for pension plan contributions made before 2007 remains available if withdrawn as a lump sum within the applicable timeframe.

Further opportunities include tax-free reinvestment in a primary residence, the tax-free sale of a primary residence for individuals over 65, and various incentives related to sustainable mobility, charitable donations and the last-minute deduction for old mortgages signed before 2013, subject to the transitional regime.

Regional impact on tax optimisation in 2025: valencian community

Since IRPF is partially delegated to Spain’s autonomous regions, tax optimisation in 2025 must also consider regional deductions.

In the Valencian Community, notable deductions include incentives for the birth of children, primary residence rental deductions, non-cosmetic dental expenses and expenses for prescription glasses or contact lenses.

Correct application of these regional benefits can significantly affect the final tax outcome.

The importance of reviewing your tax strategy before year-end

Tax optimisation in 2025 requires anticipation, technical analysis and a comprehensive view of both personal and business circumstances.

This is precisely the approach adopted by Delaguía & Luzón, advising companies and professionals through integrated, year-end tax strategies.

For businesses and professionals, tax planning is not an expense but a strategic investment that reduces risk and improves financial efficiency.

Expert advice transforms tax regulations into a tangible advantage before 31 December.