2. Obligation to report
Taxpayers obliged to declare (Article 96 of the Act)
In general, taxpayers for Personal Income Tax are obliged to file and sign a tax return, with the limits and conditions established by regulations.
However, taxpayers who obtain income from the following sources exclusively, individually or jointly, do not have to declare:
- Full earned income (including, among others, pensions and passive compensatory allowances, as well as pensions and annual payments for food) that do not exceed the following amounts:
22,000 Euros per year if they come from a single payer.
This same limit is also applied when the earned income comes from more than one payer, if the sum of the amounts received from the second and other payers, in order of amount, does not exceed the amount of 1,500 euros per year.
The limit will also be 22,000 euros, in the case of taxpayers whose only earned income consists of the passive benefits referred to in Article 17.2.a) and the determination of the applicable withholding rate would have been carried out in accordance with the special procedure established by regulations. For this purpose, 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 has passed away before the date of publication of the General State Budget Act 6 / 2018, i.e. 5 July 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 in the previous point).
- When the spouse receives compensatory pensions.
- When annual payments are received for non-exempt foods (the annual payments for food received from parents are exempt by court decision).
- When the payer of earned income is not obliged to withhold in accordance with the provisions of the regulations (v. Art. 76 of the Act Personal Income Tax).
- When full earned income is received at a fixed withholding rate of article 80,1. 3 And 4 of the tax regulations.
- Full income from movable capital (dividends from shares, interest on accounts, deposits or fixed-income securities, etc.) and capital gains (gains derived from reimbursements of investment fund investments, prizes for participation in competitions or games, etc.), subject to withholding or payment on account, with the joint limit of 1,600 euros per year.
When the withholding base has not been determined according to the amount to be included in the taxable base, the capital gain obtained from transfers or redemptions of shares or holdings of collective investment institutions may not be counted as capital gains subject to withholding or payment on account for the purposes of the exclusive limits of the obligation to declare.
- Attributed property income, full income from movable capital not subject to withholding derived from Treasury Bills and grants for acquisition of official or appraised property and other capital gains derived from public aid, with a combined 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
Under no circumstances will taxpayers who obtain full income exclusively be obliged to declare (except for the purposes of the following section) of the work, capital or economic activities, as well as capital gains, with the joint limit of 1,000 euros per year and capital losses of less than 500 euros.
Obligation to declare whether certain deductions or reductions are made
Taxpayers who have the right to apply the following deductions or reductions are obliged to declare in any case, when exercising such a right:
- Contributions to protected assets of people with disabilities, pension plans, guaranteed benefit plans or social security mutual societies, business social welfare plans and dependency insurance that reduce the taxable base.
- Deduction for investment in housing (transitional regime)
- Deduction for double international taxation.
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 exceed the maximum amounts or limits indicated are obliged to declare in any case.
- Exempt income:
Income exempt from the tax will not be taken into consideration (such as Social Security pensions for absolute permanent disability or severe disability, public grants for study purposes, annuities for food received from parents by court decision.
- Joint taxation:
None of the amounts or limits indicated above will be increased or extended in the event of joint taxation of family units.