News published in INFORMA 2018

News published in INFORMA during the month of July

As of 5 July 2018, the quantity of the reduction for work earnings outlined in article 20 of the Personal Income Tax Act has been modified.

A specific regime has been established to determine the quantity of the reduction for work earnings during the 2018 tax period.

The procedure for calculating the withholding rate for work earnings in 2018 is regulated here.

As of 1 January 2018, taxpayers can deduct 30% from the amounts paid during the tax period to buy newly or recently created shares that meet the requirements, with a maximum deduction basis of 60,000 euros per year.

With effect from 1 January 2018, when the family unit referred to in Article 82.1 of the LIRPF is made up of a personal income tax payer and residents of another EU Member State, which prevents them from filing a joint return, personal income tax payers may deduct from the full amount corresponding to their individual return the deduction calculated in accordance with the provisions of DA 48 of the LIRPF.

The procedure for calculating the deduction provided for in DA 48 of the Personal Income Tax (LIRPF) applicable to family units formed by tax residents in Member States of the European Union or the European Economic Area is explained.

The deduction provided for in DA 48 of the LIRPF will not apply when any of the members of the family unit has chosen to pay taxes under the special regime applicable to workers posted to Spanish territory, has chosen to pay taxes under the regime provided for in article 46 of the LIRNR or does not have a tax identification number.

From 1 January 2018, taxpayers whose usual and effective residence is not in Ceuta or Melilla will get a 60% deduction (this was previously 50%) on the part of the amount of total state or regional tax charges that proportionally correspond with the income specified in article 68.4.2 of the Personal Income Tax Act, obtained in Ceuta or Melilla.

From 1 January 2018, taxpayers whose usual and effective residence is in Ceuta or Melilla will get a 60% deduction (this was previously 50%) on the part of the amount of total state or regional tax charges that proportionally correspond with income obtained in Ceuta or Melilla, calculated to determine the gross tax bases.

During 2018, the limit excluded from the declaration obligation applicable to work earnings, specified in article 96.3 of the Personal Income Tax Act, will by 12,643 euros.

In 2018, when the tax has accrued before the date on which the General State Budgets Act for 2018 came into effect, i.e. when the taxpayer died before 5 July 2018, the limit excluded from the declaration obligation applied to work earnings specified in article 96.3 of the Personal Income Tax Act, will be 12,000 euros.

In 2018, when the tax has accrued after the date on which the General State Budgets Act for 2018 came into effect, i.e. when the taxpayer died after 5 July 2018, the limit excluded from the declaration obligation applied to work earnings specified in article 96.3 of the Personal Income Tax Act, will be 12,643 euros.

As of 2019, the limit excluded from the declaration obligation applicable to work earnings, detailed in article 96.3 of the Personal Income Tax Act, will be 14,000 euros.

As of 1 January 2018, the deduction for maternity is increased by 1,000 euros when the corresponding taxpayer pays for day care in an authorised nursery or education centre for each child under the age of three.

The limits to apply this increase for childcare costs are, on the one hand, contributions and total amounts paid to Social Security and Mutual Funds, accrued in each tax period after birth or adoption, and, on the other, the total amount of the effective non-subsidised cost paid in each tax period to the nursery or educational centre for this child.

Childcare costs are considered to be the amounts paid to nurseries and authorised child education centres, amounts paid for registration/enrolment, care, in ordinary working hours and extended hours, and food, provided that the expenses are for full months and are not considered exempt work earnings.

The quantities for this deduction specified in article 81 bis. c) of the Personal Income Tax Act will increase by 50 euros per month for each child that exceeds the minimum number of children required for the family to be considered a large family. For 2018, the increase of the deduction will be determined for August to December only.

Taking effect in August 2018, the amount of the deduction for a large family increases by up to 600 euros for each child that forms part of the large family, after the minimum number of children required in order for the family to be considered a general or special large family.

The requirements that taxpayers must meet to get the deduction for a non-separated spouse with a disability are detailed in article 81 bis of the Personal Income Tax Act.

In order to calculate the limit when quantifying deductions for a large family or for a person with disabilities, if the taxpayer had the right to more than one of these deductions, the limit will be calculated independently for each of them.

The amount of annual income to take into consideration, for the advanced payment of the deduction for a non-separated spouse with disabilities, will correspond with the last tax period whose self-assessment filing period ended in the fiscal year when the advance payment was requested. So, for the 2019 fiscal year, the income from 2017 will be taken into account. For 2018 the spouse's income from 2016 will be the reference, bearing in mind that the deduction will only be applied from August to September.