Income tax (IRPF)

The Personal Income Tax (IRPF) is the best known. This is a tax that is paid based on the money you earn. Thus, those who earn more pay more, those who earn less pay less, and even those who have just enough to live on pay nothing.

But there are other interesting things we should know about Income Tax.

This tax considers a minimum amount of money that we all need to spend in order to live with dignity and cover our basic needs. Well, you don't have to pay Income Tax on that amount. Furthermore, this minimum amount is higher for people with children, as they must feed them, buy them clothes, books, toys, etc. We must not forget that children are very important to the country, and that's why we help those who have them so they pay less taxes and can spend more money on caring for them.

Another important fact is that the Income Tax has "discounts" (reductions, deductions), which are amounts that can be subtracted by people who have certain expenses. Among these discounts is one for mothers with children under 3 years old, to help them pay for daycare or another caregiver while the parents are at work. People who save for their retirement (pension plans) can also deduct an amount from those savings. And if we have made donations to help organizations that care for the neediest people (Red Cross, Doctors Without Borders, Caritas), we can also deduct a portion of the money we have given.

In addition to the discounts established by the State for all Spaniards, the Autonomous Communities can establish other discounts for residents of each of them.

Personal Income Tax is paid every year, but it doesn't have to be paid all at once. Instead, it's paid gradually, in installments, with a portion of a person's salary being paid each month. Every year, between April and June, the accounts are made: We add up everything we have earned, we subtract the discounts or expenses we have had and what we have been paying month to month, and if the result tells us that we still have something left to pay, we pay it; But if we have entered more, they return it to us.

Thus, the Income Tax is a tax that attempts to be very fair, taking into account the differences between people, as some earn more and others less, some have children and others don't. Some have expenses and others don't. In this way, the tax also contributes to reducing inequalities between people. Although some pay more because they have more and others pay less because they have less, we all have the same right to enjoy roads, parks, hospitals, schools, and other public services.