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Practical manual for Income Tax 2019.

Earned income

Reductions applicable to certain gross income

Transitional regime of reductions in benefits received in the form of capital derived from private social security systems.

In 2019, it is no longer possible to apply this transitional reduction regime to benefits received in the form of capital derived from pension plans, social welfare mutual funds and pension plans insured for contingencies that occurred in the 2010 or earlier years.

Determination of reduced net income

Reduction for work income

For the 2019 financial year, in order to reduce the tax burden on lower-income workers, both the amount of the reduction for obtaining work income (up to 5,565 euros per year) and the threshold of net work income that allows this reduction to be applied (up to 16,825 euros) have been increased.

Thus, taxpayers who obtain net income from work in 2019 less than 16,825 euros, provided that they do not have income, excluding exempt income, other than work income exceeding 6,500 euros, will reduce their net income from work by the following amounts:

  1. Taxpayers with net income from work equal to or less than 13,115 euros: 5,565 euros per year.
  2. Taxpayers with net income from work between 13,115 and 16,825 euros: 5,565 euros less the result of multiplying by 1.5 the difference between the work performance and 13,115 euros per year.