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Practical Income Manual 2023.

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

Regulations: Articles 64 and 75 Law of Personal Income Tax

The annuities for maintenance established in favor of the children and paid by the taxpayer do not reduce the general tax base of the payer, but they are taken into account to calculate their full state and regional personal income tax quota. through the specialties established, respectively, in articles 64 and 75 of the Personal Income Tax Law , whose purpose is to reduce the progressivity of the tax in these cases.

For children who receive said annuities for maintenance, 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 annuities for alimony in favor of people other than the children , the payer may apply the reductions in the tax base established in the article 55 of the Personal Income Tax Law discussed in Chapter 13 of this Manual.

To this end, taxpayers who pay annuities for support to their children in fiscal year 2023 by judicial decision (or established through a regulatory agreement decreed judicially or formalized before the Judicial Secretary or in a public deed before a Notary) without the right to the application of the minimum for descendants provided for in article 58 of the Personal Income Tax Law will determine, when the amount of the annuities is less than the general taxable base, the contributions corresponding to the general liquidable base (state part and autonomous part) in accordance with the following procedure:

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

    • Base "A": amount of the annuity for food.

    • Base "B": rest of the general liquidable base.

  2. To each of the aforementioned bases, the general tax scale for 2023 will be applied in the state part and, in the regional part, the corresponding regional scale. As a consequence of said application, a quota 1 and a quota 2 are obtained for base "A", and for base "B" a quota 3 and a quota 4 are obtained.

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

    • State general fee (quota 5) = quota 1 + quota 3

    • Regional general 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 installments 5 and 6 determined in step 3 above in the amount of installments 7 and 8, without them being negative as a consequence of said reduction.

    • General state quota = quota 5 − quota 7.

    • Regional general quota = quota 6 − quota 8.

Precisions

  • Who applies the specialties in determining the full state and regional fee for the payment of annuities for child support?

    The parent or parents who have custody of the children may apply the minimum for descendants, for the descendants who live with them , and specialties applicable in the cases of annuities for maintenance in favor of the children included in articles 64 and 75 of the Personal Income Tax Law . In the event that custody of a child is terminated due to his or her reaching the age of majority, the above will apply as long as the parent taxpayer in question maintains cohabitation with the child.

    On the other hand, the parent who pays annuities for maintenance in favor of the children in the terms provided for in article 7. k) of the Personal Income Tax Law and who are not assigned custody of these, not even on a shared basis, will apply the regime provided for annuities for alimony, but not the minimum for descendants. Therefore, the economic dependence that the payment of those entails cannot be assimilated to cohabitation for the purposes of applying the minimum for descendants. See in this regard the resolutions of the TEAC of May 29, 2023 (claims numbers 00/08646/2022/00/00 and 00/10590/2022), which fell into an extraordinary appeal for unification of criteria.

    In summary, the regime provided for in articles 64 and 75 of the Personal Income Tax Law is only applicable to parents who, paying annuities for maintenance in favor of their children by judicial decision, do not live with them to any extent. Unlike these, parents who have exclusive or shared custody will have the right to the application of the minimum for descendants by their children.

  • Where must the annuities for child support be set?

    Based on the modifications introduced by Law 15/2015, of July 2, on Voluntary Jurisdiction, the regime established in articles 64 and 75 of the Personal Income Tax Law for annuities for maintenance in favor of the children paid by judicial decision, extends to those agreed upon in the regulatory agreement formulated by the spouses before the Judicial Secretary or in a public deed before a Notary, to which it refers Article 90 of the Civil Code, whether or not its inclusion is mandatory.

    What is the date from which payments made as annuities for child support have an impact on personal income tax taxation?

    In accordance with the provisions of article 89 of the Civil Code, “The effects of the dissolution of marriage by divorce will occur from the finality of the sentence or decree that declares it or from the manifestation of the consent of both spouses granted in a public deed. in accordance with the provisions of article 87.”

    Therefore, for the purposes of applying the regime of specialties applicable in the cases of annuities for maintenance in favor of the children provided for in articles 64 and 75 of the Personal Income Tax Law, only the amounts paid for said concept from the finality of the judicial ruling or decree, or from the granting of a public deed declaring the divorce.

  • How is the amount of child support annuities calculated for children to whom the specialties regime applies?

    For the calculation of the annuities for maintenance in favor of the children to which the special regime of articles 64 and 75 of the Personal Income Tax Law is applied, the will be taken into account. monetary amount that has actually been paid ##2##as annuity for maintenance, 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.

    Food also includes the education and instruction of the obligor while he is a minor and even afterward, when he has not completed his training for reasons not attributable to him.

    Food will include the expenses of pregnancy and childbirth, insofar as they are not otherwise covered.

    Keep in mind that the update of the amount of annuities for food in accordance with CPI will be declared in the tax period in which said update is satisfied.

Note: Taxpayers who pay annuities for support to their children provided for in Article 7 of the Personal Income Tax Law will apply the general tax scale separately to the annuities for support from the rest of the general taxable base, but not the minimum for descendants. See in this regard the TEAC Resolutions of May 29, 2023, Claims numbers 00/08646/2022/00/00 and 00/10590/2022, both of which fell into extraordinary appeals for unification of criteria.