Skip to main content

New regulations for 2025

Skip information index

Main tax changes introduced by Law 5/2025, of July 24, which modifies the consolidated text of the Law on civil liability and insurance in the circulation of motor vehicles, approved by Royal Legislative Decree 8/2004, of October 29, and Law 20/2015, of July 14, on the regulation, supervision and solvency of insurance and reinsurance entities

PERSONAL INCOME TAX

This regulation introduces the following changes to the Personal Income Tax:

  1. New deduction for obtaining income from work

    With effects from January 1, 2025, the Third Final Provision of Law 5/2025, of July 24, which modifies the consolidated text of the Law on civil liability and insurance in the circulation of motor vehicles, approved by Royal Legislative Decree 8/2004, of October 29, and Law 20/2015, of July 14, on the regulation, supervision and solvency of insurance and reinsurance entities introduces the Sixty-first Additional Provision of Law 35/2006, of November 28, on Personal Income Tax that regulates the new deduction for obtaining income from work.

    This modification has the purpose to limit the tax increase for those earning the new minimum interprofessional wage (SMI), which will rise to 16,576 euros per year from 2025.

    With effect from January 1, 2025, taxpayers with full employment income derived from the effective provision of services corresponding to an employment or statutory relationship less than 18,276 euros annual, provided that they do not have income other than these, excluding exempt income, exceeding 6,500 euros, they can apply a deduction for obtaining income from work.

    His amount is as follows:

    • When the gross income from the work mentioned is equal to or less than 576 euros annual: 340 euros annual.

    • When the total income from the aforementioned work is between 16,576 euros per year and 18,276 euros per year: 340 euros less the result of multiplying by 0.2 the difference between the gross income from work and 16,576 euros per year.

    Additionally, a limit which consists in that this deduction may not exceed the part of the sum of the full state and regional contributions that proportionally corresponds to the net income from work derived from the effective provision of services corresponding to an employment or statutory relationship computed for the determination of the taxable bases.

    Its amount is subtracted from the total net quota of the tax, once the deduction for international double taxation has been applied.

  2. Procedure for processing refunds to mutual fund members arising from the application of the second transitional provision of the Personal Income Tax Law

    With effects from July 26, 2025, the Fifth Final Provision of Law 5/2025, of July 24, which modifies the consolidated text of the Law on civil liability and insurance in the circulation of motor vehicles, approved by Royal Legislative Decree 8/2004, of October 29, and Law 20/2015, of July 14, on the regulation, supervision and solvency of insurance and reinsurance entities modifies the Sixteenth Final Provision of Law 7/2024, of December 20, establishing a Complementary Tax to guarantee a minimum overall level of taxation for multinational groups and large national groups, a Tax on the interest margin and commissions of certain financial entities and a Tax on liquids for electronic cigarettes and other tobacco-related products, and amending other tax regulations that regulates The procedure to be followed by the AEAT to determine the appropriateness and, where appropriate, implement the refunds derived from the jurisprudence established by the Supreme Court in relation to the second transitional provision of Law 35/2006, of November 28, on Personal Income Tax in relation to the tax periods 2019 to 2022.

    Section 3 of Final Provision 16 of Law 7/2024 is amended, eliminating the deferral of processing refunds arising from the application of the second transitional provision of the Tax Law in relation to the years 2019 to 2022 and previous years not yet prescribed.

    Furthermore, it is established that, by submitting the form that was made available on the Tax Agency's Electronic Office since April 2, 2025, taxpayers will have submitted the refund application corresponding to the 2019, 2020, 2021, 2022 and previous periods not yet prescribed, even if said application had been submitted prior to this regulatory change.

    This authorizes the AEAT to begin processing refunds resulting from the application of the second transitional provision of the Tax Law for the years 2019 to 2022 and prior years that have not yet expired.