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Practical manual for Income Tax 2023.

Delimitation and conditions for its application

Since 1 January 2018, and in order to adapt our regulations to European Union Law, this deduction has been established on the quota in favour of those taxpayers who are part of a family unit in which one of its members resides in another Member State of the European Union or the European Economic Area, which prevents them from filing a joint declaration. In this way, the amount payable by the taxpayer resident in Spanish territory is equal to what would have been borne if all members of the family unit had been tax residents in Spain.

Conditions for the application of the deduction

The deduction may be applied by those taxpayers who meet the following conditions:

  • That it forms part of one of the following types of family unit referred to in article 82.1 of the Personal Income Tax Law :

    1. The one made up of spouses who are not legally separated and, if applicable:

    • Minor children, except those who, with the consent of their parents, live independently of them.

    • Children of legal age who are legally incapacitated and subject to extended or renewed parental authority.

    2. In cases of legal separation, or when there is no marital bond, the family is formed by the father or mother and all the children who live with one or the other and who meet the requirements referred to in rule 1 of this article.

  • That the family unit is made up of taxpayers under the IRPF and residents in another Member State of the European Union or the European Economic Area.

  • That in the Member State of the European Union or the European Economic Area in which any of the members of the family unit reside, there are regulations on mutual assistance in matters of exchange of tax information in the terms provided for in the LGT , which is applicable.

    In relation to the LGT see Law 58/2003, of December 17, General Tax.

    Note: Please note that, with effect from July 11, 2021, article sixteen of Law 11/2021, of July 9, on measures to prevent and combat tax fraud, transposing the Directive ( EU ) 2016/1164, of the Council, of July 12, 2016, establishing rules against tax avoidance practices that directly affect the functioning of the internal market, modifying various tax rules and regarding gambling regulation ( BOE of July 10) has modified the first Additional Provision of Law 36/2006, of November 29, on measures for the prevention of tax fraud, replacing, in accordance with the new international parameters, the concepts of tax havens, countries or territories with which there is no effective exchange of information, or countries with zero or low taxation, with that of non-cooperative jurisdictions.

    Likewise, the aforementioned Law 11/2021 adds a new tenth Additional Provision to Law 36/2006, which establishes in section 2 that "References made to sections 2, 3 and 4 of the Additional Provision will be understood to be deleted first of this Law, in its drafting prior to the entry into force of Law 11/2021, on measures to prevent and combat tax fraud and transposition of the Directive ( EU ) 2016/1164, of the Council, of July 12, which establishes rules against tax avoidance practices that directly affect the functioning of the internal market, modifying various tax rules and the regulation of gambling.

    For its part, section 3 of the new Additional Provision tenth of Law 36/2006 states that "The normative references made to States with which there is an effective exchange of tax information or in tax matters, shall be understood to be made to States with which there are regulations on mutual assistance in matters of exchange of tax information in the terms provided for in Law 58/2003, of December 17, General Tax, which is applicable."

Assumptions excluded from the application of the deduction

This deduction will not apply when any of the members of the family unit: