Spain Sees Record Growth in High-Earning Taxpayers – Most of them are Based in Madrid

In 2022, Spain experienced a notable increase in high-earning taxpayers thanks to robust corporate profits, a thriving economy, and strong employment figures. The number of individuals with an annual declared income exceeding $646,000 surged by 25% compared to the previous year, reaching a record 15,186. This represents the highest number of very high earners recorded in the Tax Agency’s annual analysis of personal income tax, released on Monday.

Previously, the record was set in 2021 with 12,178 individuals in this elite group, a figure only slightly above that of 2019, before the health and economic crises of 2020. The 2022 data, based on last year’s tax filings, reveals that the highest earners proportionally welcomed the most new members.

The statistics encompass income from employment, investments, economic activities, and real estate returns. The Tax Agency categorizes taxpayers into ten income brackets based on their taxable income. Among these, the bracket for those earning more than $646,000 saw the most significant growth, with a 24.7% increase in individuals. This growth far outpaced the next bracket ($160,000 to $646,000), which grew by 17.2%, and the $64,000 to $161,000 bracket, which saw a 14.5% increase. Conversely, the number of low and mid-range earners grew at slower rates, while the lowest earners saw a decline.

Nearly 22.9 million individuals filed taxes in 2022, marking a 3.8% increase from the previous year. Despite the historical growth of the high-earner bracket, these super-rich individuals still accounted for only 0.07% of all taxpayers.

The composition of income significantly influences the wealthiest individuals’ success. Unlike low and medium earners, who primarily depend on their work income, the richest individuals supplement their earnings with income from capital and savings. These sources include shares, dividends, interest, and other capital gains, which are generally linked to market and stock performance.

When focusing on movable capital, such as bank deposits or share dividends, individuals earning less than $64,000 annually receive only a few hundred euros on average. In contrast, the ultra-rich average $458,000 a year from these investments. In 2022, despite soaring inflation and the energy crisis, companies listed on the blue-chip Ibex 35 index recorded a gross income of $641 billion and a net result of $55.8 billion. This made 2022 the second-best year in the historical series, significantly boosting the income of the wealthiest individuals.

Geographically, most high-earning taxpayers are based in the Madrid region, followed by Catalonia and the Valencia region. The Basque Country and Navarre, which have their own tax collection systems, were not included in the analysis.

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