New regulations for 2023

Main tax changes introduced by Royal Decree 1008/2023 amending the Personal Income Tax Regulations and Corporate Tax Regulations

PERSONAL INCOME TAX

With effect from December 7 2023 validity, following modifications are introduced in the Personal Income Tax Regulations ( ):

• Exemption of employment income derived from the delivery of shares or interests to employees of emerging companies

  number 1 of section 2 of article 43 is modified by article One, section One of Royal Decree 1008/2023.

  In relation to the exemption of employment income derived from the delivery of shares or interests to workers in emerging companies referred to in Law 28/2022, of December 21, on the promotion of the ecosystem of emerging companies, the requirement already established by law on the conditions under which the offer must be made is included at a regulatory level, so that it will not be necessary for it to be made under the same conditions for all workers of the company, but must be made within the general remuneration policy of the company and contribute to the participation of workers in the latter.

• Procedure for applying the maternity deduction and its advance payment and for applying the increase in said deduction

  article 60 is modified by article One, section Two of Royal Decree 1008/2023.

  The purpose of the amendments is to adapt this article to the new legal regulation of the maternity deduction, in which the group of beneficiaries of the same has been expanded and the limit on the total contributions and fees to Social Security and Mutual Societies accrued in each tax period after birth or adoption established by the previous regulations has been eliminated.

• Obligation to report

  Sections 2 and 3 of article 61 are modified by Article Section Three of Royal Decree 1008/2023.

  In order to adapt this article to the legal regulation, the obligation to declare is incorporated for all those natural persons who at any time during the tax period have been registered, as self-employed workers, in the Special Regime for Self-Employed Workers or in the Special Social Security Regime for Sea Workers and the limit excluding the obligation to declare in the case of receiving the employment income provided for in article 96.3 of the LIRPF (those that come from more than one payer with the exceptions indicated in said article; spousal alimony or non-exempt alimony annuities; in cases where the payer is not required to withhold or when the income is subject to a fixed withholding rate).

• Type of withholding applicable to certain income

  As a result of the legal changes that reduce the withholding rate on income from work derived from the production of literary, artistic or scientific works and on income derived from intellectual property when, in both cases, certain requirements are met:

  1. Number 4 of section 1 of article 80 is modified by article One, section Four of Royal Decree 1008/2023.

     The withholding rate on work income derived from the production of literary, artistic or scientific works (which, in general, is 15 percent) will be 7 percent when the volume of such gross income corresponding to the immediately preceding fiscal year is less than 15,000 euros and represents more than 75 percent of the sum of the gross income from economic activities and work obtained by the taxpayer in said fiscal year.

     In order to apply this type of withholding, taxpayers must notify the payer of the income of the occurrence of these circumstances, and the payer is obliged to retain the duly signed communication.

  2. Section 2 of article 101 is modified by article One, section Five of Royal Decree 1008/2023.

     The withholding rate on income from intellectual property, regardless of its classification, will be 15 percent.

     However, the 7 percent will apply:

     • When the volume of such gross income corresponding to the immediately preceding fiscal year is less than 15,000 euros and represents more than 75 percent of the sum of the gross income from economic activities and work obtained by the taxpayer in said fiscal year.

     • When it concerns the income from professional activities established by regulation.

     • In the case of advances on account arising from the transfer of the exploitation of copyright that will accrue over several years.

• Special regime applicable to workers, professionals, entrepreneurs and investors transferred to Spanish territory

  With effect from 1 January 2023, Article 93 of the Income Tax Law which regulates the special tax regime applicable to workers, professionals, entrepreneurs and investors relocated to Spanish territory, has been amended by the Third Final Provision of Law 28/2022, of 21 December, on the promotion of the start-up ecosystem ( BOE of 22 December).

  In particular, with regard to the subjective scope of application of the regime, this extends to self-employed workers , by allowing its application to workers who travel to Spanish territory work remotely using exclusively computer, telematic and telecommunications means and systems and to company administrators regardless of their percentage of participation in the company's share capital.

  Likewise, this subjective scope of application is extended to those who travel to develop an entrepreneurial activity in the terms of Law 14/2013 , of September 27, on support for entrepreneurs and their internationalization, to highly qualified professionals who provide services to emerging companies and to those who carry out training, research, development and innovation activities, and meet certain requirements.

  In addition, the possibility of opting to pay the Non-Resident Income Tax is established for the taxpayer's children under twenty-five years of age (or whatever their age in the case of disability) and his/her spouse or, in the event of no marital bond, the parent of the children, provided that they meet certain conditions (hereinafter, associated taxpayers).

  These modifications require the corresponding regulatory development:

  1. The title of chapter I of title VIII is modified by article One, section Six of Royal Decree 1008/2023.

     Title of Chapter I of Title VIII is renamed:

     «Special regime applicable to workers, professionals, entrepreneurs and investors transferred to Spanish territory.»

  2. Article 113 is modified by Article One, Section Seven of Royal Decree 1008/2023.

     In order to adapt its wording to the new subjective scope of application of the same included in the Law for the promotion of the ecosystem of emerging companies. In relation to the new assumptions, the following are defined:

     • Entrepreneurial activity will be classified as that economic activity that, because it is innovative and/or has special economic interest for Spain, is classified as such in the terms of article 70 of Law 14/2013 of 27 September of support to entrepreneurs and their internationalization, it being necessary to have a residence permit for business activity according to article 69 of the aforementioned law prior to moving to Spanish territory. In the case of citizens of the European Union or foreigners to whom the law of the EU applies because they are beneficiaries of the rights of free movement and residence, they must count with a favorable report issued by the National Innovation Company, SME “Enisa” .

     • Highly qualified professionals will be understood as (professionals who have qualification referred to in article 71 of the aforementioned Law 14/2013). This circumstance will be deemed to be fulfilled when you have the residence permit provided for in article 71 of Law 14/2013 with prior character to your displacement .

     • Training, research, development and innovation activities will be considered to be carried out in accordance with the provisions of article 72 section 1 of the aforementioned law. This circumstance will be deemed to be fulfilled when has the residence permit provided for in article 72 of Law 14/2013 prior to their movement .

     • As a new feature, a new assumption is included to benefit from this special regime that includes the spouse of the taxpayer and his/her children, under twenty-five years of age or whatever their age in the case of disability or in the case of non-existence of a marital bond, the parent of these provided that they meet the conditions provided for in section 3 of article 93 of the LIRPF . The transfer may be carried out before or after the transfer of the main taxpayer, provided that they do not acquire tax residency in Spain before the first tax period to which the special regime applies or, if it is later, it has not ended.

  3. Article 114 is modified by Article One, Section Eight of Royal Decree 1008/2023.

     As regards the special features for determining tax debt, under this regime only income obtained in Spanish territory is taxed, except for work income and, from 1 January 2023, income from economic activities classified as entrepreneurial, which, in both cases, are all deemed to have been obtained in Spanish territory. Notwithstanding the foregoing, the aforementioned income is not deemed to have been obtained in Spain during the application of the regime when it derives from an activity carried out prior to the date of transfer to Spanish territory or after the date of communication provided for in article 119.5 of the Regulation using form 149, without prejudice to its taxation when it is deemed to have been obtained in Spanish territory.

     In correlation with the previous section, the deduction for international double taxation, in accordance with the provisions of article 80 of Law IRPF , is extended to income from economic activities classified as entrepreneurial with the limit of 30% of the part of the full quota corresponding to the total of said income.

     As regards withholdings and payments on account for payments on account of this regime, they are made in accordance with the provisions of the IRNR regulations for income obtained without the mediation of a permanent establishment.

     Although in the aforementioned regulations the income from economic activities is subject to withholding, as a novelty, economic activities classified as business activities are exempt from the withholding obligation and in the case of income from professional activities, the applicable withholding rate (24%) must be recorded in invoices issued during the application of the regime.

     As for the formal obligations of taxpayers who obtain income from economic activities, the IRPF Regulation refers to article 6 of the IRNR Regulation which establishes that taxpayers who obtain income from those referred to in article 24.2 of the Tax Law (activities or economic operations carried out in Spain without the mediation of a permanent establishment) will be obliged to keep income and expense record books.

  4. article 115 is modified by article One, section Nine of Royal Decree 1008/2023.

     The duration of the regime is adapted to the associated taxpayers who accompany the main taxpayer defined in section 3 of article 93 of the Law of Personal Income Tax , this special regime being applicable until the last tax period in which it is applicable to the main taxpayer without prejudice to his/her renunciation to the regime or exclusion from it.

  5. Article 116 is modified by Article One, Section Ten of Royal Decree 1008/2023.

     In relation to the exercise of option it is established that it will be an individual communication from each taxpayer.

     In the case of the main taxpayer, within a maximum period of 6 months from the date of commencement of the activity as stated in the registration with Social Security in Spain or documentation that allows the taxpayer to maintain the Social Security legislation of origin or, if registration with Social Security is not mandatory, a supporting document proving the date of commencement of the activity.

     In the case of associated taxpayers accompanying the principal taxpayer the maximum period is six months from the date of entry into Spanish territory or the period provided for the principal taxpayer if longer.

     It is also established that the determination of the link of these with the main taxpayer, age and disability situation will be carried out taking into account the situation existing at the time of exercising their option for this regime

  6. Article 117 is modified by Article One, Section Eleven of Royal Decree 1008/2023.

     In relation to the renunciation of the regime, it is added that the associated taxpayers who accompany the taxpayer principal may individually renounce within the period and terms provided for in said article.

  7. Article 118 is modified by Article One, Section Twelve of Royal Decree 1008/2023.

     Regarding exclusion from the regime, it is established that the associated taxpayers who accompany the main taxpayer will be jointly excluded when they fail to comply with condition provided for in article 93.3.d) of the LIRPF or when the main taxpayer resigns or is excluded from the regime. Also, when any of the taxpayers associated with the principal fails to comply with any of the other conditions provided for in article 93.3 of the LIRPF or the requirements of connection, age or disability situation required for the option, he/she will be individually excluded from the regime, and the rest may continue.

     When the main taxpayer has communicated the resignation or exclusion, it will not be necessary for the associated taxpayers to communicate their exclusion from the regime.

  8. Article 119 is modified by Article One, Section Thirteen of Royal Decree 1008/2023.

     Regarding communications to the Tax Administration and accreditation of the special regime.

     The data that must be supplied by both the main taxpayer and the associates, individually, in form 149 for communication of the option for the expatriate regime is established based on the assumption to which they are applying and the supporting documentation to be provided in each case.

  9. A new twentieth transitional provision is introduced by Article Fifteen of Royal Decree 1008/2023.

     In relation to the deadline for exercising the option for said regime for taxpayers who acquire their tax residency in Spain in the 2023 tax period due to a move made in 2022 or 2023 before the entry into force of Order approving the new model for communicating the option, which establishes that the deadline for exercising the option for the regime will be six months from the date of entry into force of the aforementioned order except when article 116 of this regulation grants a longer period.

     In the event that the transfer is due to the start of an employment relationship or as a consequence of acquiring the status of administrator of an entity , they may also exercise the option prior to the date of entry into force of the order approving the new model 149 for communication of the option through the current model 149 since these are assumptions that existed in the regulation of the regime in force as of December 31, 2022. However, in the case of teleworking, the documentation provided for in article 119 of the regulation must be sent to the AEAT , within the period specified in the previous paragraph.

• Advance payments applicable in the 2023 tax period to income obtained on the island of La Palma

  a new Additional Provision tenth is added by article One, section Fourteen of Royal Decree 1008/2023.

  The regulations on payments on account are adapted to the deduction for income obtained on the island of La Palma for taxpayers with habitual and effective residence on said island in the 2023 tax period.

por el que se modifican el Reglamento del Impuesto sobre la Renta de las Personas Físicas, aprobado por el Real Decreto 439/2007, de 30 de marzo, en materia de retribuciones en especie, deducción por maternidad, obligación de declarar, pagos a cuenta y régimen especial aplicable a trabajadores, profesionales, emprendedores e inversores desplazados a territorio español, y el Reglamento del Impuesto sobre Sociedades, aprobado por el Real Decreto 634/2015, de 10 de julio, en materia de retenciones e ingresos a cuenta.(BOE, 07-diciembre-2023)