News published in INFORMA 2017

New items published in the INFORMA programme during May

In order to apply the autonomous community deduction for leasing of habitual residence, the taxpayer shall require a copy of the security deposit or the report filed with the Social Housing Agency when the intention to apply the deduction arises.

This news item details the autonomous region deduction for expenses incurred on acquisition of school material and textbooks, and the different requirements for applying the deduction depending on whether the taxpayers are members of a large family or not.

This item describes what the habitual residence deduction entails in the Balearic Islands for certain collectives (taxpayers under 36 years of age, or disabled persons, or large families) and explains the requirements necessary to apply it.  

Expenses incurred attending congresses and conferences organised and paid by pharmaceutical companies for healthcare professionals shall be classified based on the event motivating the invitation. If the medical professional attends as a representative of the hospital in which they work, these are classified as earned income. If the medical professional attends on a freelance basis, or even if they work at a hospital but attend the conference for their own professional prestige, these amounts are classifies as income on professional activities.

Expenses incurred attending congresses and conferences organised and paid by pharmaceutical companies for healthcare professionals shall be classified based on the event motivating the invitation. If the medical professional attends as a representative of the hospital in which they work, these are classified as earned income. If the medical professional attends on a freelance basis, or even if they work at a hospital but attend the conference for their own professional prestige, these amounts are classifies as income on professional activities.  

This news entry details what the deduction for home conservation work or improvement of habitual residence quality, sustainability and accessibility entails: Amount, cases of non-application, deduction bases and requirements. Applies to work carried out from 1 January 2014 to 31 December 2015 on habitual residences.

This section describes the maximum deduction base in the autonomous region for home conservation work or improvement of habitual residence quality, sustainability and accessibility: Annual base of the deduction depending on the net tax base of the taxpayer on an individual or joint basis, the accumulated deduction base and the application criteria when multiple taxpayers have concurrent entitlement.

This section explains which home conservation work or improvement of habitual residence quality, sustainability and accessibility, that gives entitlement to the deduction, is included. In accordance with the provisions of Royal Decree 233/2013 of 5 April: these include, inter alia, concrete pouring work, roofing, facades, electricity installations, bathroom installations, telecommunications and improvements of energy efficiency.

This section analyses the possibility of applying the deduction in certain cases: Air conditioning installation work or change of individual heating boiler; changing doors and windows to energy-efficient models, or carrying out paintwork.

Option of applying the deduction to the purchase of materials when the owner of the dwelling carries out the work themselves: No, since this does not meet the requirement of payment by the means described to the person or entity carrying out the work.

In general, the amounts paid for improvement/conservation work on a habitual residence are attributed to all owners or rightholders based on their percentage of ownership, regardless of which person pays for the work. We analyse the case of owners' associations and married couples taxed jointly or separately, where the corresponding payment per person can be proven.

The deduction for building conservation or home improvement works cannot be applied in the case of investments to which the deduction for use of renewable energy sources in a habitual residence can be applied, whether it has been applied or not. The taxpayer cannot opt to apply one deduction or the other.

In the case of a married couple who co-own a home where home improvement works have been carried out for certain amounts and with a certain net tax base each, we analyse what is the maximum deduction base corresponding to the taxpayer who can apply the deduction, in the event that they are tax separately.

In joint tax returns in which one of the spouses applies the deduction for habitual residence, the other cannot apply the autonomous region deduction for leasing of a habitual residence.

If no security deposit has been deposited, the deduction for leasing of habitual residence cannot be applied, even if the tenant has paid the deposit to the landlord. If the deposit is made after the contract is entered into but before the end of the tax period, it can, however be applied.

This deduction is applied by the contract holders, however, in the case of married couples being taxed jointly, the deduction will be applied by both spouses equally, even if the contract is in only one of their names.

The autonomous region deduction for acquisition of textbooks and school material is a set amount and the regulation does not require proof to the expenses incurred. It is considered a minimum amount to pay the expenses necessary for this purpose and, therefore, no documentary proof is required.

The deduction for acquisition of textbooks and school material can be applied on account of any descendant giving entitlement to the minimum for descendants and who is in school in the second cycle of infant school, in primary school or in mandatory secondary school, regardless of their age. The limits are only taken into account to apply the minimum for descendants.

Financial assistance in cases of social emergency granted by local councils to persons in need (food stamps, basic water and electricity supplies, clothing, emergency accommodation, etc.) are exempt from Personal Income Tax in accordance with article 7. y) of the Tax Act.

The amounts received by the taxpayer as a result of a court sentence condemning a financial institution to pay legal costs are taxed as capital gains for Personal Income Tax purposes, in accordance with the provisions set forth in article 14.1. c) of the Tax Act, in the tax period in which the court sentence is issued as final, regardless of when the appraisal is made.