Taxes on your investments: how dividends, capital gains and funds are taxed in 2026

In the Spanish income tax, not all income is taxed equally. Investments form part of what is called the 'savings tax base', separate from employment income. This base includes interest from accounts and deposits, dividends from stocks, gains from selling stocks, funds or ETFs, and returns from long-term savings products.

The main advantage is that these returns do not add to your salary or modify your usual income tax bracket. They have their own, lower brackets and specific tax treatment that is worth understanding before making investment decisions.

The applicable rates in 2026 are: 19% for the first €6,000, 21% between €6,000 and €50,000, 23% between €50,000 and €200,000, 27% between €200,000 and €300,000, and 28% above €300,000. These brackets apply to both capital gains and capital income (dividends, interest).

Every time a company pays dividends, the Spanish Tax Agency automatically withholds 19% at source. That withholding is an advance payment: if your effective rate in the savings base is higher, you will owe the difference; if lower, you will receive a partial refund. In other words, receiving dividends is not 'tax-free': it increases your savings base and may push you into a higher bracket.

For investors with large dividend portfolios, a common strategy is to spread sales or income across different tax years to avoid accumulating too much in a single year and unnecessarily climbing brackets.

When you sell stocks or ETFs at a profit, the capital gain (selling price minus purchase price plus costs) is taxed under the savings base. If you sell at a loss, you can offset it against other gains of the same type in the same year. And if the balance is still negative, you can carry that deficit forward for up to 4 years to offset against future gains.

Investment funds registered in Spain have an advantage that stocks and ETFs do not: transfers between funds are not taxed. You can move your money from one fund to another (changing strategy, manager or risk level) without going through the Tax Agency. You only pay tax when you withdraw money from the fund system.

This advantage makes funds an excellent vehicle for long-term strategies. However, ETFs, although similar to index funds, do not enjoy this benefit: each sale of units generates a taxable event.

Regulations allow losses and gains to be offset against each other, with some limitations. Capital gains can be offset against capital losses without limit. Additionally, they can be offset against up to 25% of positive capital income (dividends, interest). And vice versa: negative capital income can offset up to 25% of positive capital gains.