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Practical Income Manual 2021.

3. Other special rules

a. Loans with interest rates lower than the legal money rate, arranged after January 1, 1992

The valuation will be carried out by the difference between the amount of interest actually paid and that which would result from applying the legal interest of the money in force for each year. For the year 2021, the legal interest on money has been set at 3 percent.

However, loans with an interest rate lower than the legal rate of money arranged prior to January 1, 1992 and whose principal had also been made available to the borrower prior to said date are not considered remuneration in kind. See in this regard the second Additional Provision of the Personal Income Tax Law .

b. Other remuneration in kind that is valued at the cost to the employer, including taxes levied on the operation

  • Benefits for maintenance, lodging, travel and similar .

  • Premiums or installments paid under insurance contract or other similar contract.

  • The amounts intended to satisfy study and maintenance expenses of the taxpayer or other people linked to the same by relationship, including related ones, up to and including the fourth degree.

c. Contributions paid by pension plan promoters, contributions paid by promoter companies regulated in Directive (EU) 2016/2341 of the European Parliament and of the Council of December 14, 2016, amounts paid by employers to meet pension commitments and amounts satisfied by employers to dependency insurance

The valuation will coincide with the amount of the contributions or amounts paid that have been attributed to the recipient.

Accuracy : Please note that, with effect from January 13, 2019, Directive (EU) 2016/2341 of the European Parliament and of the Council of December 14, 2016, repealed Directive 2003/41/EC referred to in the article 43.1.1.e) of the Personal Income Tax Law .

d. Special rights of economic content reserved by the founders or promoters of a company as remuneration for personal services

Regulations: Articles 47 Regulation Personal Income Tax .

When the rights consist of a percentage of the entity's profits, they will be valued at a minimum of 35 percent of the equivalent value of the share capital that allows the same participation in the profits as that recognized for the aforementioned rights. However, the subsequent remuneration for holding these rights will constitute income from movable capital.

The joint value of these special rights may not exceed 10 percent of the net profits obtained according to the balance sheet, once the quota destined for legal reserve has been deducted and for a maximum period of 10 years, in accordance with the provisions of article 27 of the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2.

e. Precautionary valuation rule: price offered to the public

Regulations: Art. 43.1.1 f) Law Personal Income Tax and 48 Regulation Income Tax

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.

The price offered to the public will be considered the price provided for in article 60 of the consolidated text of the General Law for the Defense of Consumers and Users and other complementary laws, approved by Royal Legislative Decree 1/2007, of November 16 ( BOE of 30), deducting ordinary or common discounts. The following have this consideration:

  1. Discounts that are offered to other groups with similar characteristics to the company's workers.

  2. Promotional discounts that are general in nature and are in force at the time of payment in kind.

  3. Any other difference from the above, as long as they do not exceed 15% or 1,000 euros per year.

    See in this regard the second Additional Provision of the Personal Income Tax Regulations in which prior agreements for the valuation of remuneration in kind for personal work are regulated for the purposes of determining the income on account of the IRPF .

In the case of transfer of the use of vehicles considered energy efficient , the resulting valuation may be reduced by up to 30 percent , in the terms and conditions conditions that have been discussed in this Chapter.