In particular, analysis of the expenses of article 19.2.f) of the Personal Income Tax Law

Regulations:  Article 19.2.f) LawPIT

Note: the deductible expenses of article 19.2.f) of the Law of PIT They are applied per family unit in the case of joint taxation.

Under this concept the following amounts are included as deductible expenses:

a. For obtaining returns

2,000 euros per year , in general, for all taxpayers who obtain employment income.

b. Increase due to geographical mobility

• The above amount will be increased by an additional 2,000 euros per year when it concerns taxpayers who meet the requirements listed below:

  1. That they are unemployed persons registered at the employment office.

  2. That they accept a job located in a municipality other than their usual residence.

  3. That the new job requires the transfer of your habitual residence to a new municipality.

  Please note that, Generally, the application of the geographical mobility allowance is conditional upon the taxpayer having actually changed their residence to a new municipality, different from their usual residence, without this municipality necessarily having to be the one where the accepted job is located. However, the new job must require the change of residence.

  A causal relationship between the change of residence and the acceptance of the job is required. For these purposes, the passage of a prolonged period of time between both moments may be an indication, among other factors to consider, that such a causal relationship does not exist.

  Article 19.2.f) of the Personal Income Tax Law does not contain, for the application of the increase for geographical mobility, any requirement of a temporary nature, either in terms of permanence in the job that is accepted or in terms of permanence in the municipality to which one moves one's residence due to the acceptance of the job. Nor does the rule limit its application to the duration of the employment contract.

  In the case of the increase in deductible expenses due to geographical mobility, since it applies in the year in which the change of residence occurs and in the following year, the limit must be calculated individually in each of the two years and will be determined by the total income from the work that has generated said expenses in each of them, once applied, if applicable, the 30 percent reduction on gross income generated over more than two years or that is notoriously irregular corresponding to that income and the reduction for income from artistic activities obtained in an exceptional manner, and reduced in each tax period, both by the remaining deductible expenses linked exclusively to such income, and by the proportional part of the remaining deductible expenses that corresponds to the duration of the accepted employment contract. If no work income is obtained in the second year of the work that motivated the change of residence, the amount to be computed as deductible expense in said year will be zero.

• The additional amount of 2,000 euros per year will be applied in the tax period in which the change of residence occurs and in the following .

  If in joint taxation there is more than one taxpayer entitled to apply the deductible expense for that concept, the total amount that may be deducted will be 2,000 euros, with the limit of the net income from work derived from the jobs accepted by all taxpayers who have the right to apply that expense.

c. Increase for active workers with disabilities

In the case of persons with disabilities who earn income from work as active workers, the general amount will be increased by the amounts indicated in the following table:

The status of person with a disability and his/her accreditation is discussed in Chapter 14.

For the application of these deductible expenses as an active worker with a disability, the following circumstances must occur simultaneously, during any day of the tax period:

1. Be an active worker.

By the expression "active worker" included in article 19.2.f) of the Law of PIT It should be understood as that of someone who receives work income as a result of the effective provision of their paid services, on behalf of another person and within the scope of organization and management of another person, physical or legal, called employer or entrepreneur.

Clarifications:

A taxpayer who is legally unemployed, carries out an economic activity, or is on early retirement cannot be considered an active worker. a director of a company to which he does not provide services within the framework of an employment relationship, or who receives a pension for total permanent disability and does not perform any work for others, etc

People who receive temporary disability benefits are equated with active workers. Supreme Court ruling No. 1381/2020, of October 22 ( ROJ : STS 3518/2020).

Likewise, regular employment is not required to be considered an "active worker", it being sufficient that the person with the recognised degree of disability is, for a single day of the tax period, a recipient of work income for the effective provision of services (which may be part-time) paid, on behalf of another person (permanent or temporary), within the scope of organisation and management of another person (physical or legal). Supreme Court ruling No. 1356/2020, of October 20 ( ROJ : STS 3265/2020).

2. Have the required degree of disability, which must be accredited in accordance with the provisions of article 72 of the Regulations of the PIT.

In the case of joint taxation of family units in which there are several active workers who are considered to be disabled, the total amount of the deductible expense for this concept will be the amount corresponding to the taxpayer with the highest degree of disability , with the limit of the sum of the net income from work corresponding to the periods in which the taxpayers, with the right to apply this expense concept, are active workers and disabled.

d. Limit on deductible expenses for other expenses

Deductible expenses for other purposes will be limited to the total income from the work that generated said expenses, once the reductions of article 18 have been applied where applicable. and where applicable, the reduction for income from artistic activities obtained exceptionally, regulated in the sixtieth Additional Provision of the Law of IRPFABBR, corresponding to that performance, and reduced by the remaining deductible expenses established in Article 19 of the Law of IRPFABBR that correspond, exclusively or proportionally, to those returns.

For the purposes of applying this limit, when the taxpayer obtains in the same tax period income derived from work that allows for the computation of a higher deductible expense in the concept of geographical mobility and in that of active worker with a disability, and other work income, the increase in the deductible expense will be attributed exclusively to the gross work income indicated first.

Consequently, the limit on increased expenses regulated in the second and third paragraphs of point f) of article 19.2) of the Law of IRPFABBR It is the full performance linked to them, once the reductions of article 18 have been applied where applicable. and, where applicable, the reduction for income from artistic activities obtained exceptionally, regulated in the sixtieth Additional Provision of the Law of IRPFABBR, less the deductible expenses linked exclusively to the income obtained and the proportional part of the remaining expenses that corresponds to the duration of the accepted employment contract or the number of days in which the circumstances of active worker and with disability occur.

In the event that, in individual or joint taxation, the increase in deductible expenses for geographical mobility and for an active worker with a disability coincide, the income that limits the amount to be deducted for both concepts is the result of the sum of the income that generates the right to deduct for one or both concepts.