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Practical guide to 2021 Income Tax.

For residing in a municipality at risk of depopulation

Regulations: Art. 4.Uno.aa) Act 13/1997, of 23 December, regulating the autonomous range of Personal Income Tax and other taxes transferred, from the Valencian Community.

Amounts of the deduction

  • 300 Euros

  • The previous amount will be increased in:

    • 120 Euros if the taxpayer has the right to apply the tax-free threshold for descendants by one person.

    • 180 Euros if the taxpayer has the right to apply the tax-free threshold for descendants by two people

    • 240 Euros if the taxpayer has the right to apply the tax-free threshold for descendants for three or more people.

    Details for the application of the increased amounts :

    • The amount of the increase is unique depending on the number of descendants.

    • When two or more taxpayers have the right to apply the tax-free threshold for descendants by the same person and meet the requirements, the additional amounts will be prorated by equal parties.

    • For the purposes of determining the applicable increased amounts, the descendants to be taken into account are only those for which the apply the tax-free threshold for descendants and who also do not give entitlement to deductions "For birth, adoption or fostering of the family," For multiple birth or adoption "and" For birth or adoption of children with disabilities "(see" Incompatibility "of this deduction).

    Example:

    The taxpayer, Mr. A.R. It resides in a municipality with a risk of depopulation and has two descendants by whom the tax-free threshold can be applied for descendants of different mothers: Your former spouse Ms. B.S. That she resides in Valencia capital, and her current spouse, Ms. C.H, who has no other children, and with whom she lives.

    Determine the amount of the deduction corresponding to each and the amount to be paid by Mr. A.R and Ms. C.H. If they will file a joint tax return.

    Solution:

    1. Amount of the deduction applicable by Mr. A.R: 300 + 120 + [(180-120) ÷ 2] = 450

      The applicable deduction will be the result of adding the increase of the deduction to 300 euros: €120 For the son living in Valencia, capital with Ms. B.S. And for which only Mr. A.R. You have the right to the deduction plus 30 euros for the child in common with Ms. C.H. Which results from the difference between the increase that would correspond to Mr. ar. In your individual tax return (180 euros), less the amount corresponding to the common child with C.H (120 euros) divided by two.

    2. Amount of the deduction applicable by Ms. B.S: You do not have the right to deduction because you do not live in a municipality at risk of depopulation

    3. Amount of the deduction applicable by Ms. C.H: 300 + (120 ÷ 2) = 360

      In this case, the increase will be 120 euros for the taxpayer having the right to apply the tax-free threshold for a descendant and will proceed with the apportionment because Mr. A.R: You also have the right)

    4. Amount of the applicable deduction in the event of joint declaration by Mr. A.R and Ms. C.H.: 300 + 120 + (180-120) = 480

      In the event of a joint tax return, the applicable deduction will be the result of adding the corresponding deduction to 300 euros for the son of Mr. A.R. And Ms. B.S. That there is 120 euros more the difference between the increase that would correspond to Mr. ar. In your individual tax return (180 euros), less the amount corresponding to the common child with C.H (120 euros).

    Conditions for applying the deduction

    • With regard to the habitual residence, the concept of habitual residence set out in the state tax regulations will be applied.

    • Municipalities at risk of depopulation.

      1. For the purposes of considering a municipality as at risk of depopulation, it must be a beneficiary of the Municipal Cooperation Fund for the fight against the depopulation of the municipalities of Valencia in the budget year in which the tax is accrued or in the previous one, for meeting at least five of the following requirements:

      1. Population density. Number of inhabitants: Less than or equal to the twenty inhabitants per square kilometer.

      2. Population growth. Population growth rate in the period from the last twenty years: Less than or equal to zero per cent.

      3. Plant growth rate. Percentage of the vegetation balance (difference between births and deaths) over the population in the period from the last twenty years: Less than or equal to-10%.

      4. Ageing index. Percentage of the population over 64 years of age of the population under 16 years: % Or more.

      5. Dependency index. The ratio of the population of children under 16 years of age and over 64 to the population aged 16 to 64 years, multiplied by 100: % Or more.

      6. Migration rate. Percentage of the migratory balance in the period from the last ten years (difference between the number of people entering and leaving for migratory reasons) over the total population of the last year: Less than or equal to zero.

      These data will be determined in accordance with the population figures approved by the Government that appear in the last municipal census in force, and of official statistics published by the National Statistics Institute, by the Valencian Institute of Statistics and official data of the public administrations.

      2. Municipalities that, even if they do not meet the requirements indicated, belong to functional areas with a population density of at least 12.5 inhabitants per square kilometer. The functional areas will be determined in accordance with the official data on territorial demarcations registered in the Register of Local Entities of the Valencian Community, created by Decree 15/2011 of 18 February, of the Council.

      In this regard, the resolutions of 11 June 2020 (DOV 17-junio-2020) and of 5 August (DOV 09-agosto-2021 ), of the Government, on the allocation of the specific line of the Municipal Cooperation Fund to combat the depopulation of the municipalities of the Valencian Community corresponding to each beneficiary entity, for the 2020 and 2021 budget years, respectively.

    • In the case of joint taxation, the same amounts are applied to the deduction established for the purposes of individual taxation.

    Incompatibility

    This deduction is incompatible for the same descendant or assimilated, with the deductions "For birth, adoption or fostering of the family," For birth or adoption of multiple children "and" For the birth or adoption of children with disabilities. "