Example: Deduction due to international double taxation

In the income tax return for the 2022 financial year of Mr. ABT, 30 years old, single and resident in Malaga, the following figures appear:

General tax base: 36,000
Savings tax base: 12,000

Within the general tax base, whose components are all positive, there are 6,000 euros obtained abroad, the taxpayer having paid in the country of obtaining a tax of a nature analogous to Personal Income Tax the amount of 1,100 euros.

Similarly, the tax base of savings, whose components are all positive, includes net income from movable capital in the amount of 6,000 euros and a capital gain derived from the transfer of an asset element in the amount of 6,000 euros and for which paid abroad for a tax analogous to IRPF the amount of 1,080 euros.

Determine the deduction for international double taxation applicable in the Personal Income Tax declaration , fiscal year 2022, assuming that there is no international double taxation agreement between Spain and the country where the income is obtained and that the taxpayer You are entitled to a reduction in the general tax base of 4,800 euros and to general deductions from the tax in the amount of 1,500 euros.

Solution :

General tax base : 36,000

Reductions in the general tax base : 4,800

General liquidable base : 31,200

Taxable base of savings and taxable base of savings : 12,000

Application of tax scales to the general taxable base (31,200)

General tax scale

Up to 20,200 = 2,112.75

Other: 11,000 at 15% = 1,650

Resulting Odds 1: 3,762.75

Autonomous tax scale

Up to 21,100: 2,207

Other: 10,100 at 15% = 1,515

Resulting Odds 2: (2,207 + 1,515) = 3,722
Application of the tax scales to the general taxable base corresponding to the personal and family minimum

Given that the amount of the general taxable base (31,200) is higher than the personal and family minimum (5,550), this is entirely part of the general taxable base.

General scale : 5,550 at 9.50% = 527.25

Resulting Odds 3: 527.25

Regional scale 5,550 at 9.50% = 527.25

Resulting Odds 4: 527.25
Determination of the full general, state and regional quota.

Full state general fee (Fee 1 - Fee 3): 3,762.75 - 527.25 = 3,235.50

Full regional general quota (Quota 2 - Quota 4): 3,722 - 527.25 = 3,194.75
Lien on the liquidable base of savings (12,000)

State lien

Up to 6,000 at 9.5% = 570

Remainder 6,000 x 10.5% = 630

Addition: 1,200

Autonomous tax

Up to 6,000 at 9.5% = 570

Remainder 6,000 x 10.5% = 630

Addition: 1,200
Determination of full quotas

General full fee (3,235.50 + 3,194.75) = 6,430.25

Full savings amount (1,200 + 1,200) = 2,400

Total full quota (6,430.25 + 2,400) = 8,830.25
Determination of the liquid quota

Deductions: 1,500.00

Total liquid quota (8,830.25 - 1,500) = 7,330.25
Deductions from the total liquid contribution

Deduction for international double taxation (the lesser of A or B)
1. Cash amount paid abroad
  
  By performance: 1,100
  
  For capital gain: 1,080
2. Result of applying the average effective tax rate, general and savings, to the part of the taxable base, general and savings, taxed abroad .
  
  B.1. Average effective general tax rate
  
  The general tax rate is determined by the following operation: Total liquid fee x (general full fee / total full fee) ÷ General liquidable base
  
  [7,330.25 x (6,430.25 ÷ 8,830.25)] ÷ 31,200 x 100 = 17.10%
  
  B.2. Savings tax type:
  
  The savings tax rate is determined by the following operation: Total liquid installment x (full savings installment / total entire installment) ÷ Liquidable savings base
  
  [7,330.25 x (2,400 ÷ 8,830.25)] ÷ 12,000 x 100 = 16.60%
  
  B.3. Part of general taxable base taxed abroad
  
  The part of the general taxable base taxed abroad is determined by applying the reduction that proportionally corresponds to the income obtained abroad and integrated into the taxable base. This operation can be represented by the following formula:
  
  General taxable base x income obtained abroad) ÷ Positive components of the general taxable base
  
  (31,200 x 6,000) ÷ 36,000 = 5,200
  
  B.4. Part of taxable savings base taxed abroad: 6,000
  
  Note: Given that in this example all the components of the liquidable base of savings are positive, the part of the liquidable base of savings taxed abroad coincides with the amount obtained abroad, as no reduction is applicable to the liquidable base of savings. , since the personal minimum is entirely part of the general tax base and no reduction has been applied to it.
  
  B.5. Input tax in Spain
  - Part of the general taxable base (5,200 x 17.10%) = 889.20
  - Part of the liquidable savings base (6,000 x 16.60%) = 996
Amount of the deduction for international double taxation (the lesser of A or B)

For income (889.20) + For capital gain (996) = 1,885.20