2. Obligation to report

TAXPAYERS REQUIRED TO DECLARE (art. 96 Law)

In general, taxpayers for the Personal Income Tax are required to file and sign a declaration for this Tax, with the limits and conditions established by regulation.

However, taxpayers who obtain income exclusively from the following sources, whether individually or jointly taxed, are not required to file a tax return:

1. Gross employment income (including, but not limited to, pensions and passive earnings, as well as compensatory pensions and alimony payments) not exceeding the following amounts:

   • 22,000 euros per year if they come from a single payer.

     This same limit also applies when the income from work comes from more than one payer, if the sum of the amounts received from the second and remaining payers, in order of amount, does not exceed the sum of 1,500 euros per year.

     The limit will also be 22,000 euros in the case of taxpayers whose only work income consists of the passive benefits referred to in article 17.2.a) and the determination of the applicable withholding rate has been carried out in accordance with the special procedure established by regulation. To do so, the pensioner with two or more payers must have requested the determination of the withholding rate using form 146.

   • 12,000 euros when the taxpayer had died before the date of publication of the General State Budget Law 6/2018, that is, on July 5, 2018, and if the tax accrual date is later, 12,643 euros. These cases are:

     • When they come from more than one payer (except for the exception provided for in the previous point).
     • When compensatory pensions are received from the spouse.
     • When child support payments that are not exempt are received (child support payments received from parents by virtue of a court decision are exempt).
     • When the payer of the income from work is not required to withhold in accordance with the regulations (see. art. 76 Rgl. Personal Income Tax (IRPF).
     • When full income from work is received at the fixed withholding rate of article 80.1. 3 and 4 of the Tax regulations.
2. Gross income from movable capital (dividends from shares, interest from accounts, deposits or fixed-income securities, etc.) and capital gains (gains derived from redemptions of shares in Investment Funds, prizes for participation in contests or games, etc.), subject to withholding or payment on account, with a joint limit of 1,600 euros per year.

   When the withholding base has not been determined based on the amount to be included in the tax base, the capital gain obtained from transfers or reimbursements of shares or interests in collective investment institutions may not be attributed as a capital gain subject to withholding or payment on account for the purposes of the limits excluding the obligation to declare.

3. Imputed real estate income, gross income from movable capital not subject to withholding derived from Treasury Bills and subsidies for the acquisition of officially protected or appraised-price housing and other capital gains derived from public aid, with a joint limit of 1,000 euros per year.

   Where the taxpayer has not been the owner of the property generating the income attributed during the whole of 2018 (due to having acquired or transferred the property in that year), the rateable value (or, failing that, the cost price) will be prorated for these purposes according to the number of days of the year during which the taxpayer was the owner of the property.

Exception to the obligation to declare

In no case will taxpayers who exclusively obtain gross income from work, capital or economic activities, as well as capital gains, with a joint limit of 1,000 euros per year and capital losses of less than 500 euros, be required to declare (except for the purposes of the following section).

Obligation to declare whether certain deductions or reductions are made

Taxpayers who are entitled to apply the following deductions or reductions are required to declare in all cases when exercising such right:

• Contributions to protected assets of persons with disabilities, pension plans, insured pension plans or mutual social security funds, company social security plans and dependency insurance that reduce the tax base.
• Deduction for investment in housing (Transitional regime)
• Deduction for double international taxation.

WARNING:

To determine the obligation to declare, it is important to take into account the following:

• Obtaining other types of income:

  Taxpayers who receive any other type of income or who earn more than the indicated maximum amounts or limits are required to file a tax return.

• Exempt income:

  Income exempt from tax will not be taken into consideration (such as, for example, Social Security pensions for permanent total disability or severe disability, public scholarships for studies, annual maintenance payments received from parents by court order).

• Joint taxation:

  None of the amounts or limits indicated above will be increased or expanded in the case of joint taxation of family units.