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Practical manual for Income Tax 2022.

Specialty in the treatment of annuities for alimony in favor of children

Regulations: Articles 64 and 75 of the Income Tax Law

The child support annuities set in favour of children and paid by taxpayer do not reduce the payer's general tax base, but they are taken into account when calculating his/her full state and regional personal income tax rate through the special provisions established, respectively, in articles 64 and 75 of the Personal Income Tax Law , the purpose of which is to reduce the progressivity of the tax in these cases.

For children who receive these annuities for food, these constitute exempt income in accordance with article 7 of the Personal Income Tax Law .

On the other hand, remember that, in the case of compensatory pensions and alimony annuities in favor of persons other than children , the payer may apply the reductions in the tax base established in article 55 of the Personal Income Tax Law which is discussed in Chapter 13 of this manual.

To this end, taxpayers who pay annual child support payments to their children in fiscal year 2022 by court order (or set through a regulatory agreement decreed by a or formalized before the court clerk or in a public deed before a notary) without the right to apply the amount per descendant provided for in article 58 of the Personal Tax Law will determine, when the amount of the annual payments is lower than the general taxable base, the contributions corresponding to the general taxable base (state and regional part) in accordance with the following procedure:

  1. The amount of the annual maintenance payments will be differentiated from the rest of the general taxable base, thus obtaining two bases for the application of the tax scales:

    • Base "A": amount of the annual food allowance.
    • Base "B": remainder of the general taxable base.

  2. For each of the aforementioned bases, the general tax scale for 2022 will be applied in the state part and, for the autonomous part, the corresponding autonomous scale. As a result of this application, a quota of 1 and a quota of 2 are obtained for base "A", and a quota of 3 and a quota of 4 are obtained for base "B".

  3. The quotas obtained in the previous phase will be added together to determine the general state quota and the general regional quota. This sum is as follows:

    • General state quota (quota 5) = quota 1 + quota 3
    • General regional quota (quota 6) = quota 2 + quota 4

  4. Application of the general and regional tax scales to the part of the general taxable base corresponding to the personal and family minimum increased by 1,980 euros per year. As a result of this operation, quota 7 (general state quota) and quota 8 (regional quota) are obtained.

  5. Reduction of the quotas 5 and 6 determined in step 3 above by the amount of quotas 7 and 8, without any negative results as a result of said reduction.

    • General state quota = quota 5 − quota 7.
    • General regional quota = quota 6 − quota 8.

Clarifications

  1. The parent or parents who have custody of the children may apply the minimum for descendants, as they are the people with whom the descendants live, and may apply the special provisions applicable in the cases of annual alimony in favor of children as set out in articles 64 and 75 of the Tax Law. In the event that the custody of a child is terminated upon reaching the age of majority, the above will apply as long as the parent taxpayer in question continues to live with the child.

    On the other hand, parents who do not live with their children, but provide them support by court order may opt for the application of the minimum for descendants, by supporting them financially, for the application of the treatment provided for in articles 64 and 75 of the Law for annual alimony payments. 

    However, in relation to the latter, take into account the change in criteria established by the TEAC resolutions of May 29, 2023 (claims numbers 00/08646/2022/00/00 and 00/10590/2022), issued in an extraordinary appeal for unification of criteria, by which the parent who pays annuities for child support and who is not assigned custody of them, not even on a shared basis, will apply the regime provided for annuities for child support, without being able to opt for the minimum for descendants.

  2. Following the amendments introduced by Law 15/2015, of July 2, on Voluntary Jurisdiction, the regime established in articles 64 and 75 of the Income Tax Law for annual child support payments made by court decision is extended to those agreed upon in the regulatory agreement drawn up by the spouses before the court clerk or in public deed before Notary, as referred to in article 90 of the Civil Code, whether or not its inclusion mandatory.

  3. For the calculation of the annual maintenance payments for children to which the specialty regime of articles 64 and 75 of the Income Tax Law applies, the monetary amount that has actually been paid in the form of an annual maintenance payment will be taken into account, taking into account the provisions of article 142 of the Civil Code which states the following:

    "Food is understood to be everything that is essential for sustenance, housing, clothing and medical care.

    Maintenance also includes the education and instruction of the person receiving support while he or she is a minor and even afterwards, when he or she has not completed his or her education for reasons not attributable to him or her.

    Food will include pregnancy and childbirth expenses, unless otherwise covered.”

Note: Taxpayers who pay child support annuities by court order will apply the general tax scale separately to the child support annuities from the rest of the general taxable base, provided that they do not live with the child and have not opted to apply the minimum for descendants of those children.