Understand what a negative income statement implies and how it could benefit you
During Spain’s 2025 personal income tax campaign, many expats and residents discover that their tax return shows a negative income statement. Far from being a problem, this result is often good news: it usually means you’re entitled to a tax refund. If this happens to you, it’s essential to understand what it means, your rights, and how to manage the process effectively to claim what’s yours.
What is a negative income statement?
A negative income statement occurs when the tax already withheld during the year—such as withholdings from your salary—and applicable deductions exceed what you were actually required to pay based on your total income.
In simpler terms, you’ve paid too much tax—and the Spanish Tax Agency (Agencia Tributaria) owes you a refund.
Example: If you worked only part of the year but your employer withheld tax as if you had worked all 12 months, you probably overpaid. This excess is returned through your income tax return when the outcome is negative.
Key implications of a negative income statement
You don’t owe additional taxes
When your negative income statement is confirmed, you won’t need to pay any more tax. This can happen if your annual income is below the taxable threshold or if you’ve applied all the deductions you qualify for.
You may be entitled to a refund
If your withheld taxes are higher than your real tax obligation, the Spanish Tax Agency will refund the difference. This refund is typically deposited into your bank account within 30 to 60 days of your return being validated—though timelines can vary. For more details, you can check our guide on how to track your tax refund status.
Subject to review
Even with a negative result, the Tax Agency may review your return. This doesn’t mean there’s a problem—only that they may request documents to confirm your declared deductions (e.g. housing deduction, work-related expenses).
How to properly manage a negative income statement
Double-check your data before submitting
Review your tax draft thoroughly—especially income, withholdings, and deductions. You can access your draft through the official Agencia Tributaria website.
Keep all relevant documents
Organise certificates of tax withholdings, donation receipts, deductible expense invoices, and Social Security payments (especially if self-employed).
Seek professional assistance
Even small mistakes can delay your refund or trigger unnecessary audits. Partnering with a tax advisor ensures your negative income statement is handled smoothly and correctly.
Additional tips
- Check for regional deductions: Many Spanish regions offer additional tax reliefs—don’t miss out.
- If you’re self-employed, make sure to clearly separate personal and business expenses and include all deductible costs.
- Save your submission receipt and reference number to track your return later if needed.
Frequently Asked Questions (FAQs)
How long does it take to receive my refund from a negative income statement?
Typically between 30 and 60 days. You can check your refund status online using your digital certificate or Cl@ve PIN.
Do I have to file a tax return if I know it will be negative?
Not always—filing depends on your income level. But if you’re due a refund, you must submit the return to claim it.
What if the Tax Agency reviews my negative income statement?
Don’t panic. Make sure you have documentation ready to justify your declared income and deductions. A tax professional can assist if you receive a notification.
If your 2025 income tax return results in a negative income statement, don’t miss the opportunity to reclaim what you’ve overpaid. Whether you’re employed, self-employed, or have multiple income sources, a properly managed return can turn into welcome extra cash. And remember, working with an expert gives you peace of mind from start to finish.
At Entre Trámites, we help you meet your tax obligations simply and stress-free. We offer specialized services in tax returns, tax advice, and accounting for both freelancers and individuals.
You can also contact us directly through this contact Form for us to call you, or if you prefer, you can schedule a free consultation or write to us on WhatsApp. We’re here to make the process easier for you!
