Extension of the group of beneficiaries

• María Jesús Montero, acting Finance Minister, passed on the decision to the group of people affected in a meeting held this morning
• The Ministry of Finance's legal services department has concluded that last December's Royal Decree which established the exemption of provisions allows for refunds to mothers and fathers who have received a firm rejected decision or judgment prior to the Supreme Court ruling. It is estimated that this decision could benefit 8,000 taxpayers
• Taxpayers who are in this situation should use the electronic refund request form for the years 2014 to 2017, whilst requests for previous non-prescribed years should be made by submitting an ordinary request by electronic register, or in person at a Tax Agency office

June 19, 2019.- Mothers and fathers who had a final ruling or judgment against the return of the maternity or paternity benefit will be able to receive the refund through a new application following the Supreme Court ruling of October 3. This has been determined by the Ministry of Finance's legal services department, based on the interpretation given in last December's Royal Decree which introduced the legal change required to comply with the Supreme Court ruling to exempt maternity benefits.

The decision was conveyed by María Jesús Montero, acting Finance Minister, to representatives from the Association of Persons Affected by Maternity and Paternity Personal Income Tax in a meeting held today. Montero agreed that a solution would be found when she heard about the issues the group were facing.

As such, the government will fulfil its commitment to correct this unjust situation affecting a group of mothers who claimed their maternity Personal Income Tax refunds prior to the Supreme Court ruling. The Tax Agency estimates that the decision could benefit around 8,000 taxpayers.

Montero has given her assurance that nobody could understand precisely what mothers who had first claimed this right would remain outside of the group of beneficiaries.

The refund process

After the Supreme Court ruled that maternity benefits are exempt from Personal Income Tax on 3 October 2018, the Ministry of Finance launched a Personal Income Tax refund claim procedure for non-prescribed fiscal years (2014-2018) last December.

The government also deems the ruling should apply to paternity, extending the refund to civil servants who have paid Personal Income Tax for maternity and paternity benefits from social security mutual societies.

The Tax Agency has launched a simple and flexible refund procedure which to date has seen refunds totalling 960 million euros.

However, doubts on interpretation have emerged as to whether the refund procedure will benefit taxpayers who applied for refunds prior to the Supreme Court ruling but were rejected.

The Ministry of Finance's legal services department have confirmed that this group would also have the right to reimbursement. This decision has been made possible as December's Royal Decree was effective as from when it came into force, but also for previous non-prescribed years, and as such extends the right to receive a refund to mothers and fathers who received firm rejections. The measure also extends to civil servants who receive maternity and paternity benefits through social security mutual societies.

With the broadening of beneficiaries extending to non-prescribed period, this will affect cases of benefits received in 2014 and earlier, but also those previous years in which eventual appeals by taxpayers interrupted the prescription of time sufficiently for the four-year prescription period established by the General Taxation Law.

Therefore, in both cases the right to the refund is valid, albeit with a different procedure for the taxpayer. For the years 2014 to 2017, mothers and fathers must submit a refund request using the same electronic form provided by the Tax Agency that applicants have been using since last December.

The period for requesting a Personal Income Tax refund for maternity benefits for the 2014 fiscal year ends on 1 July 2019, upon completion of the four years in accordance with legislation.

For claims for previous non-prescribed years applicants must submit an ordinary request, providing their full name and NIF/Tax ID number, along with the year they received the benefit and the IBAN of the bank account holder. Requests should be submitted either via the electronic registry or any other Administration registry.

All mothers and fathers who have now had the right to refund extended to them, who have already filed a request after the Supreme Court ruling will not need to submit it again now, as this same request will be processed.

If the second request has received a negative ruling, the interested party should contact the Tax Agency in writing showing their opposition to the decision and the Administration will proceed with their refund.

The Ministry of Finance's solution sees an end to any potential discrimination. In other words, all mothers and fathers who received the benefit as from 2014 will have the right to a refund, regardless of whether they filed a claim prior to the ruling.

In addition, in certain cases the submission of a prior application may be an advantage, in that if the term of prescription was stopped, it is now possible to receive benefits from years prior to 2014.

Refund procedure

The measure reported today is added to the procedure which was initiated by the government in December 2018 for the refund of maternity and paternity benefits following the High Court ruling. Thanks to the system put in place by the Tax Agency, more than 734,000 mothers and fathers had received (up to 11 June) a Personal Income Tax withholdings refund for the period 2014 to 2017.

To date, the total amount refunded (refund plus interest) is in excess of 960 million euros. Taxpayers entitled to a refund have received an average of 1,309 euros. Mothers have received an average of 2,066 euros and fathers 483 euros.