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Form 100. 2020 Personal Income Tax Return Declaration

7,1,2,2. Rules of assessment

In general, income in kind will be valued at its normal market value. The payment on account will be added to this value, unless its amount has been passed on to the recipient.

However, the following income from work in kind will be valued in accordance with the valuation rules provided for in article 43 of the Tax Law:

  • Use of housing

  • Use or delivery of motor vehicles 

  • Other cases of remuneration in kind

Use of housing (art. 43.1.1.a Law)

If the home used is owned by the payer, the valuation will be carried out for the amount resulting from applying 10% to the cadastral value.

In the case of properties whose cadastral values have been reviewed or modified, or determined through a general collective valuation procedure, in accordance with the cadastral regulations, and have come into force in the tax period of the year or in the period of the 10 previous tax periods, the valuation will be 5 percent of the cadastral value.

If on the date of accrual of the Tax the properties had no cadastral value or this had not been notified to the owner, 50 percent of the value for which they must be computed for the purposes of the Wealth Tax will be taken as the basis for their imputation. . In these cases, the percentage will be 5 percent.

The resulting valuation may not exceed 10% of the remaining compensation for the work.

If the home used is not the property of the payer, the remuneration in kind is determined by the cost to the payer of the home, including the taxes levied on the operation, without this valuation being able to be lower than what would have corresponded if the previous rule provided for homes owned by the payer (5 or 10 percent of the cadastral value of the home).

Use or delivery of motor vehicles (art. 43.1.1.b and f of the Law)

In the case of use or delivery of motor vehicles, remuneration in kind will be valued in accordance with the following rules:

  • In the event of delivery , the acquisition cost for the payer, including the taxes levied on the operation.

  • In the case of use , 20 percent per year of the cost referred to in the previous paragraph. If the vehicle is not owned by the payer, said percentage will be applied to the market value that would correspond to the vehicle if it were new.

  • In the event of use and subsequent delivery , the valuation of the latter will be carried out taking into account the valuation resulting from the previous use. For these purposes, the valuation of the use must be estimated at 20 percent 100 annually, regardless of whether the availability of the car for private purposes has been total or partial.

  • In the case of vehicles that belong to companies whose regular activity is the transfer of use of motor vehicles, the valuation may not be lower than the price offered to the public for the service in question.

    The valuation, in cases of transfer of use, may be reduced by 15, 20 or 30 percent, depending on the case, when it comes to vehicles considered energy efficient.

Other cases of remuneration in kind (art. 43 Law)

  1. Loans with interest rates lower than the legal money rate

    The difference between the interest paid and the legal interest of the money in force in the period (3 percent in fiscal year 2020) will be considered income in kind.

    However, loans with an interest rate lower than the legal rate of money arranged prior to January 1, 1992 and whose principal had been made available to the borrower also prior to said date will not be considered remuneration in kind (DA 2 Law).

  2. Benefits for maintenance, lodging, travel and similar 

    Without prejudice to the allowances and travel expenses exempt from tax, benefits for maintenance, lodging, travel and similar will be valued at the cost to the payer, including the taxes levied on the operation.

  3. Premiums or contributions paid under an insurance contract or similar

    They will be valued at the cost to the payer, including the taxes levied on the operation.

    However, premiums or fees paid to insurance entities for the illness coverage of the worker, spouse and descendants under the legally established conditions will not be considered remuneration in kind.

  4. Amounts intended to satisfy study and maintenance expenses

    The amounts intended to meet the expenses of studies and maintenance of the taxpayer or of other people linked to him by kinship, including related ones, up to and including the fourth degree: They will be valued at the cost to the payer, including the taxes levied on the operation.

    However, amounts intended for the updating, training or recycling of employed personnel will not be considered remuneration in kind, when required by the development of their activities or the characteristics of the jobs.

  5. Pension plans and pension commitments

    The contributions paid by pension plan promoters, or by the promoting companies provided for in Directive 2003/41/EC of the European Parliament and of the Council, of June 3, 2003, as well as the amounts paid by employers to meet Pension commitments in the terms provided for in the first Additional Provision of Royal Legislative Decree 1/2002, of November 29, which approves the Law on the Regulation of Pension Plans and Funds, will be included as income from work in species for its amount.

    Likewise, in terms of their amount, the amounts paid by employers to dependency insurance.

Precautionary valuation rule: Price offered to the public (art. 48 Rgl.)

When the performance of work in kind is paid by companies whose regular activity is the performance of the activities that give rise to it, the valuation may not be lower than the price offered to the public for the good, right or service in question.

For these purposes, the price offered to the public will be considered the price provided for in article 13 of Law 26/1984, of July 19, General for the Defense of Consumers and Users, deducting ordinary or common discounts.

The following will be considered ordinary or common:

  • Discounts that are offered to other groups with similar characteristics to the company's workers.
  • Promotional discounts that are general in nature and are in force at the time of payment in kind.
  •  Any other than the above as long as they do not exceed 15% or 1,000 euros per year.