Special cases of income concurrence: Annuities for alimony for children and progressively exempt income

Example:

Mr. JRF, resident in the Community of Madrid, has obtained a general tax base of 23,900 euros in fiscal year 2023. He has also obtained exempt income with progressivity amounting to 2,950 euros.

During the year, he has paid annual maintenance payments to his children amounting to 2,800 euros, as provided for in the judicially approved divorce settlement agreement.

Determine the full contributions corresponding to the 2023 financial year, knowing that the amount of the personal and family minimum amounts to 5,550 euros.

Solution:

1. Determination of the bases for the application of the tax scales

Since you have paid annuities to your children during the year by judicial decision and the amount is lower than the amount of your general taxable base, the general and regional scales of Personal Income Tax must be applied separately to the amount of the annuities (2,800) and the amount of the rest of the general liquidable base.

This last amount is determined by increasing the general taxable base (23,900 euros) by the amount of exempt income with progression (2,950) and decreasing the result by the amount of the annual alimony paid in the year (2,800). Definitely:

Base "A" = 2,800

Base "B" = (23,900 + 2,950) − 2,800 = 24,050

2. Application of the Personal Income Tax scales to the amount of annuities, base "A" (2,800 euros)

• General scale of IRPF

• 2,800 x 9.50% = 266

  Odds 1 = 266

• Regional scale of IRPF

  2,800 x 8.50% = 238

  Odds 2 = 238

3. Application of the tax scales to the rest of the general taxable base, base "B" (24,050 euros)

• General scale of IRPF

  Up to 20,200 = 2,112.75

  Other: 3,850 at 15% = 577.50

  Odds 3 = 2,690.25

• Regional scale of IRPF

  Until: 19,004.63 = 1,739.53

  Other: 5,045.37 at 12.80% = 645.80

  Installment 4 = 2,385.33

4. Application of the tax scales to the general taxable base corresponding to the personal and family minimum increased by 1,980 euros

Since the amount of the general taxable base (23,900) is higher than the personal and family minimum increased by 1,980 euros (5,550 + 1,980 = 7,530), this forms part of the general taxable base in its entirety.

• General scale of IRPF

  Given that the amount of the general taxable base (23,900) is higher than the personal and family minimum increased by 1,980 euros (5,550 + 1,980 = 7,730), this is entirely part of the general taxable base.

  7,530 at 9.50% = 715.35

  Odds 5 = 715.35

• Regional scale of IRPF

• In this case, the regional amount of the taxpayer's minimum (set at 5,777.55 euros) increased by 1,980 euros (5,777.55 + 1,980) determines an amount of 7,757.55 euros, lower than the general taxable base (23,900), therefore which said amount forms part in its entirety of the general taxable base.

  7,757.55 at 8.50% = 659.39

  Odds 6 = 659.39

5. Calculation of the quotas for the purpose of determining the average tax rates

To determine the average tax rates, both state and regional, it is necessary to first calculate the respective state and regional rates. These fees are calculated as follows:

• State fee = (fee 1 + fee 3 - fee 5):

  266 + 2,690.25 – 715.35 = 2,240.90

• Regional quota = (quota 2 + quota 4 - quota 6):

  238 + 2,385.33 – 659.39= 1,963.94‬

6. Determination of average tax rates

1. Average state tax rate TME: 2,240.90 ÷ 26,850 x 100 = 8.34%

2. Average regional tax rate = AMR = 1,963.94 ÷ 26,850 x 100 = 7.31%

7. Determination of the general state and regional integral quota

• General state total rate (general taxable base x TME) 23,900 x 8.34% = 1,993.26

• General regional integral quota: (general taxable base x TMA) 23,900 x 7.31% = 1,747.09‬