3.2.1. Evolution of income for Personal Income Tax

Personal income tax income amounted to 109,485 million euros and grew by 15.8% in 2022. The three factors that defined income growth were the increase in labor income (salaries and pensions) and its effective rate, the good results of the annual declaration and the increase in the profits of personal companies. The income generated by these three elements (withholdings from work, the positive quota of the annual declaration and the fractional payments of personal companies) explain practically all of the increase in income in 2022.

Income from withholdings from work and economic activities, which are the main component of the tax, grew by 12.6% in 2022. Growth moderated from the highs of just over 13% in the first part of the year, especially due to the evolution of withholdings in the private sector. In the public, on the other hand, the tone throughout the year was stability with a rebound at the end of the year when the compensation payment for the price increase was received. The causes of the growth were job creation (very intense in most of the year, particularly in the first half), the increase in average salaries and pensions and the increase in the effective withholding rate derived from this increase.

In the private sector, the growth in withholdings was 12.9%. The trend, as has been said, was one of progressive moderation as the year progressed (the increase in the first half had been 13.8%), in line with the evolution of employment. Average salaries, unlike what had happened in recent years, rose by over 3% throughout the year (with increasing intensity over the months) and, as a result of this increase, the rate also rose. cash. By type of taxpayer, in Large Companies income grew by 10.7%, about 7 points due to the increase in the average salary and the effective rate and the rest attributable to employment. In SMEs, income growth (17.3%) was greater than in Large Companies due to the high rates in the first part of the year, a period that was compared to quarters affected by restrictions on certain activities more typical of small companies. companies. The growth in both companies was converging, although SMEs continued to grow more (13.6% in the third quarter) due to the greater dynamism of employment (the contribution of salary and type were similar in both types of company).

In contrast to the private sector, in public administrations the evolution was stable throughout the year except for two alterations: that of February for the payment to pensioners in compensation for the price deviation in 2021, and that of recent months for the additional 1.5% increase in public salaries. Growth for the year is 11.7%. Withholdings from public pensions have grown since March by around 17%, about 10 points due to the increase in the effective rate (3 points due to the incorporation of new pensioners), five and a half points due to the increase in the average pension and a little more than one point due to the growth of the pensioner population. For their part, withholdings linked to public salaries grew around 6% (until November the increase was just over 5%), a result, mainly, of the increase in the average salary and effective rate.

The second explanatory factor for the growth in collection was the income derived from the annual declaration. These income grew by 25.4%, 26.8% in the case of the declarations corresponding to fiscal year 2021, which are the majority of those presented in 2022. The main causes behind this good result were the regulatory measures (increase in rates on the savings base and modification of the limits on contributions to pension plans, in addition to the end of other measures that had reduced the tax in 2020) and, above all, the intense growth of income not completely subject to withholdings or payments on account (especially those from economic activities and capital gains). The other side of the annual statement, returns, barely changed (-1.6%) compared to the previous year and only contributed a couple of tenths to the increase in net income.

The third factor that significantly influenced the increase in personal income tax income in 2022 was the profits of personal companies that drove the growth of installment payments to 21.7%. There are some reasons that qualify the previous data, such as the fact that the high rates of the first part of the year were due, in part, to the comparison with quarters of 2021 with a pace of activity still weak due to restrictions; In this sense, the results in the last declaration entered (that of the third quarter) were lower than those of the first half of the year (they grew by 12.7%). In addition, in 2021 revenues were also affected by some regulatory measures aimed at softening the impact of low activity on the returns of these companies. However, even with all these caveats, the truth is that the level of payments in 2022 was 28.5% higher than that recorded in 2019.

In the rest of the components of the tax, three elements must be highlighted: the sustained growth of withholdings on movable capital income, the recovery of withholdings linked to leases, and the decline, although maintaining very high levels, of capital gains derived from investment funds. Withholdings of movable capital increased by 9.5% in 2022. Its evolution throughout the year was very irregular, but with results slightly higher than those of 2021. The improvement came from dividends, although the rise in interest rates began to be noticed, very marginally. For its part, withholdings from rental income grew by 11.3%, after two years of declines. The notable growth in 2022 allows the level to be somewhat higher than what these incomes had in 2019. Finally, withholdings for profits in investment funds fell by 10.8%, but it must be remembered that they came from the historical maximum they reached last year, so that, even having lost income in 2022, their level in the whole of the year remains among the highest since the creation of this figure in 1999.