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Practical manual for Income Tax 2024. Part 1

Due tax

Withholdings and payment on account

Type of withholding applicable to certain employment income

Royal Decree 142/2024, of February 6, which modifies the Regulation of the PIT, in terms of withholdings and payments on account, modifies by its sole article 1, with effect from 8 February 2024, section 1 of article 81 of the Tax Regulations, indicating the new amounts of employment income from which withholding and payment on account are made, based on the number of children and other descendants and the situation of the taxpayer.

Royal Decree 142/2024 also introduces a twenty-first transitional provision in the aforementioned Regulation, regarding the calculation of the withholding rate and payment on account in the 2024 tax period.

Subsequently, Royal Decree-Law 4/2024, of June 26, modified the Additional Provision fifty-seventh of the Law of the PIT To extend the deduction provided for in Article 68.4 of the Personal Income Tax Law (deduction for income earned in Ceuta and Melilla) applicable to taxpayers with habitual and effective residence on the island of La Palma until 2024. As a consequence, the withholding percentage will be reduced by 60% for the 2024 financial year when employment income benefits from the deduction provided for in article 68.4 of the Law on PIT (deduction for income obtained in Ceuta and Melilla) and for the 2024 fiscal year, also when it concerns income obtained on the island of La Palma by taxpayers with habitual and effective residence on that island, as referred to in the Fifty-seventh Additional Provision of the aforementioned Law.

However, for the 2024 tax period, the above only applies to determining:

  • The type of withholding or payment on account of employment income determined by the general withholding procedure provided for in Article 82 of the Regulation PIT that are paid or satisfied from June 28, 2024, and must regularize, where applicable, the type of withholding or payment on account in the first employment income that is paid or satisfied from that date.

    However, the payer is given the option to do the above for the first employment income paid or paid from July onwards, in which case the withholding rate or payment on account for employment income paid previously will be determined without taking into account the reduction in the amount of said payments on account.

  • The type of installment payment corresponding to economic activities that are eligible for it and whose submission period had not started by June 28, 2024.