FAQs

ILT benefits shall be shown under the heading "BENEFITS (distinguishing between CASH AND CASH) ARISING FROM DISABILITY FROM WORK":

• Those paid directly by the employer, (by virtue of the respective collaboration agreement with the Social Security), in code A.

• those paid directly to the worker by any of the public schemes of the Social Security or Passive Classes or, where appropriate, by the respective Mutual Insurance Company collaborating with the Social Security, in code B subkey 01.It is not possible to reflect in this subkey B.01 benefits in kind arising from incapacity for work.

In the case of monetary benefits, the field "MONEY PAYMENTS DERIVED FROM EMPLOYMENT DISABILITY" of the key A, of form 190, shall be completed, when the company pays the benefits for temporary incapacity for work by virtue of collaboration in the management with the Social Security, whether this collaboration is of an obligatory or voluntary nature .

Likewise, when, exceptionally, benefits for incapacity for work are paid by the employer in the form of benefits in kind, these shall be recorded in the field "BENEFITS IN KIND DERIVED FROM INCAPACITY FOR WORK", the sum of the valuations corresponding to said payments in kind derived from incapacity for work effectively paid in the financial year to the recipient in question, determined in accordance with the provisions of article 43 of the Tax Law and with the corresponding breakdown (see the following example question) shall be entered.

In other words, both the amounts paid by the company by virtue of voluntary collaboration with the Social Security regulated in sections a) and b) of article 102.1 of the Consolidated Text of the General Social Security Law approved by Royal Legislative Decree 8/2015, and the amounts paid in the cases of obligatory collaboration referred to in section c) of the aforementioned article, must be included in these fields of the A key.

In these cases, the total annual amounts considered by the paying institution for the purpose of calculating the withholding tax rate shall be entered in the fields under "ADDITIONAL DATA".

Example:

Employed as an employee with the following data as at 31/12/2022:

Personal:born in 1975, with a permanent contract, married and with a dependent child under the age of three and entitled to the deduction for geographical mobility started in 2022.

Economic:Cash payments:21.000€ (reductions for irregularity, 2.000);payments in kind (not derived from incapacity for work), 1,000 euros.A withholding tax of 2.62% (21,000 x 0.0262 = 550.20 €, and 1,000 x 0.0262 = 26.20) and deductible expenses of 1,250€. The payment on account is not passed on to the worker.

On the other hand, he was on sick leave (ILT) and received income of 1,300 euros (paid by the employer) and deductible expenses of 100€. Of these, €1,050was paid to him in cash, with deductions of €27.51 (€1,050 x 0.0262), and the remainder (€250) in the form of remuneration in kind derived from this incapacity, the corresponding payment on account being €6.55 (250 x 0.0262), payment on account which has been passed on to him in full.

In addition, he must pay his ex-spouse 2,300 euros per year in compensatory pensions.

All these data shall be reflected in form 190, by the employer, at the same payee record, Key A, filling in the following fields:

Additional Data:

No. If during the financial year, the employer pays the worker income from work, in the form of "MONEY PAYMENTS (and/or, if applicable, PAYMENTS IN CASH) NOT DERIVED FROM DISABILITY FROM WORK" as well as "MONEY PAYMENTS DERIVED FROM DISABILITY FROM WORK" or "PAYMENTS IN CASH DERIVED FROM DISABILITY FROM WORK", all of them will be reflected within the A key, in their different fields, in a single payee record, with the corresponding breakdown (see example of previous question), provided that all of them correspond to the same accrual financial year.

The payment of the benefit for incapacity for work derived from a common illness or non-occupational accident that the company must pay to the worker between days 4 and 15 (both inclusive) following the sick leave shall be entered in the code A, in the field "Cash payments derived from incapacity for work" (or, if applicable, in the field "Payments in kind derived from incapacity for work", also in code A), given its nature as a benefit for incapacity for work paid by the company.

These voluntary benefit complements, as well as other types of salary complements that the employer may pay to his workers, constitute a concept of remuneration different from the incapacity for work benefit, which must be reflected in the key A, in the field Monetary payments (or, if applicable, in kind) not derived from incapacity for work.

In code B, subkey 01, within the field "Payments derived from incapacity for work" of form 190 corresponding to 2016, the benefits for temporary incapacity for work paid by the INSS or the mutual society collaborating with the S.S. shall be included, when they are responsible for direct payment, that is to say, when:

• Entities and bodies excluded from delegated payment.

• For non-compliance with the employer's delegated payment obligation.

• Companies with less than 10 employees and more than 180 consecutive days of benefit payment on request.

• Termination or suspension of the employment relationship while the worker is on ILT.

• Medical discharge based on a report proposed by unemployment benefit recipients.

• Continuation of the ITL situation, once the period of unemployment has ended.

• In cases of exhaustion of the ITL due to the expiry of the maximum period of 545 days, during the extension of the economic effects of the benefit until the qualification of the permanent incapacity.

• In the case of trade representatives, bullfighting professionals and artists.In the latter cases, where the duration of the contract does not exceed 30 days.

• For becoming extension of the benefit after 365 days ITL, after the termination INSS.

The direct payment benefits paid by the Social Security or, where appropriate, by mutual societies collaborating with the Social Security for the concepts of maternity, paternity or risk during pregnancy are not considered to be benefits for incapacity for work, and must be entered by the paying entity in the corresponding code;specifically:

• Maternity or paternity benefits, given its exempt status, at Key L, Subkey 27⁽¹⁾

• The benefit for risk during pregnancy (regulated in Article 186 of Chapter VIII, Title II of Royal Legislative Decree 8/2015, approving the Consolidated Text of the General Social Security Law), which is not exempt from taxation as it is not included in any of the cases provided for in letters h) or z) of Law 35/2006, on Personal Income Tax, in Field B, Subfield 03 (this benefit is also different from the benefit for temporary incapacity for work).

⁽¹⁾ If the maternity benefit or allowance is paid by the paying entity itself, this subkey L.27 should also be entered to reflect the amounts paid for these concepts (with the limits established in the 2nd and 3rd paragraphs of art. 7.h) of the Tax Law).^(Back)

In the field "Withholdings made on benefits derived from incapacity for work", the amount of the personal income tax withholdings resulting from applying the general withholding rate determined in accordance with the provisions of Articles 80 and following of the Personal Income Tax Regulations to the amount of the monetary benefit for temporary incapacity for work shall be entered.

When, exceptionally, benefits are paid by the employer for incapacity for work in the form of benefits in kind, these shall be recorded in the field "Benefits in kind derived from incapacity for work", entering in the subfield "Valuation of benefits in kind derived from incapacity for work";the sum of the valuations corresponding to such payments in kind deriving from incapacity for work actually paid in the financial year to the recipient in question, determined in accordance with the provisions of Article 43 of the Tax Law and with the corresponding breakdown.

In addition, in the subfield "Payments made on account for benefits in kind deriving from incapacity for work", the annual amount actually paid on account by the payer in relation to payments in kind deriving from incapacity for work, resulting from applying to the amount of the benefit in kind for temporary incapacity for work the general withholding rate determined in accordance with the provisions of Articles 80, shall also be entered;and following of the Personal Income Tax Regulation.

Finally, if part or all of the aforementioned payment on account made by the payer on the amount of the benefit in kind paid as a result of incapacity for work, has been passed on to the worker, these amounts passed on must be entered in the subfield "PAYMENT ON ACCOUNT FOR BENEFITS IN KIND AS A RESULT OF INCAPACITY FOR WORK".

(See example in question 3).

Regardless of their exempt nature from taxation in the recipient's Income Tax, it is important to remember that the entities paying this income, aid or grants, and other exempt amounts, are obliged to include in Form 190 the amounts paid to each of the recipients, regardless of their amount, identifying the type of benefit paid in the corresponding code (L) and subkey (01 to 30).Thus, by way of illustration only, the following benefits should be declared under Key L:

• Public benefits for foster care and other support exempted from Article 7(i) of the Personal Income Tax Act, in subkey L.09
• Grants exempted irrespective of the amount in subkey L10
• Public financial benefits paid under the Dependency Law, exempted by Article 7(x) of the Personal Income Tax Law, in subkey L.19
• Aid established by Autonomous Communities or by local entities to, in accordance with their regulations, help groups at risk of social exclusion, social emergency situations, housing needs of people without resources or food needs, schooling and other basic needs of minors or disabled people when they and their dependants lack sufficient economic means, which are exempt by virtue of that established in the first paragraph of letter y) of article 7 of the Tax Law, (without including the economic benefits established by the Autonomous Communities as minimum income in this subkey that must be entered in subkey 28).They must be declared in subkey L.22.

  It is recalled that the excess over 1.5 of the IPREM ⁽¹⁾(11,279.39 euros in 2020;11,862.90 in 2021 and €12,159.42 in 2022) is taxable income.The excess is considered as income from work (V1978-17), in cash or in kind;Therefore, when a taxpayer of one of these exempt incomes exceeds this limit, based on the remuneration paid individually, this excess must be reported on form 190 with code B.03.

• Public maternity or paternity benefits exempt from personal income tax.To be entered in subkey L.27.

  The exempt amount of the remuneration or benefits referred to in this subkey shall be limited to the amount of the maximum benefit recognised by the Social Security for the corresponding concept.The excess, if any, will be taxed as income from work with code A.

• Economic benefits established by the Autonomous Communities under the concept of minimum income to guarantee economic resources for the subsistence of persons who lack them and who are exempt by virtue of that established in the first paragraph of letter y) of Article 7 of the Tax Law, (without including the other exempt aids established in this first paragraph of letter y) in this subkey that must be entered in subkey 22 above).They should be entered in subclave L.28.

  It is recalled that the excess over 1.5 of the IPREM ⁽²⁾(11,279.39 euros in 2020;11,862.90 in 2021 and €12,159.42 in 2022) is taxable income.The excess is considered as earned income (V1978-17), therefore, when a taxpayer of one of these exempted incomes exceeds this limit, according to the remuneration paid individually, this excess must be reported in form 190 with the key B.03.

• Economic benefit from the Social Security corresponding to the Minimum Living Income, which must be entered in subkey L.29.

  It is recalled that the excess over 1.5 of the IPREM ⁽³⁾(11,279.39 euros in 2020;11,862.90 in 2021 and €12,159.42 in 2022) is taxable income.The excess is considered as earned income (V1978-17), therefore, when a taxpayer of one of these exempted incomes exceeds this limit, according to the remuneration paid individually, this excess must be reported in form 190 with the key B.03.

⁽¹⁾ IPREM annual 2020:7,519.59 € / annual IPREM 2021:7.908,60 € / IPREM per year 2022:€8,106.28. This limit of 1.5 times the IPREM is common to all the amounts reflected in subkeys L.22, L.28 and L.29.^(Back)

⁽²⁾ IPREM annual 2020:7,519.59 € / annual IPREM 2021:7.908,60 € / IPREM per year 2022:€8,106.28. This limit of 1.5 times the IPREM is common to all the amounts reflected in subkeys L.22, L.28 and L.29.^(Back)

⁽³⁾ IPREM annual 2020:7,519.59 € / annual IPREM 2021:7.908,60 € / IPREM per year 2022:€8,106.28. This limit of 1.5 times the IPREM is common to all the amounts reflected in subkeys L.22, L.28 and L.29.^(Back)

Only maternity or paternity benefits/payments paid throughout 2018 (currently, childbirth or childcare allowance) paid by the following payers are to be included in this subkey L.27:

• Social Security.
• Mutual Social Welfare Funds acting as alternatives to the special Social Security scheme for self-employed workers or the self-employed, recognised for professionals not included in the aforementioned special Social Security scheme, provided that the benefits are for situations identical to those provided by the Social Security for professionals included in said special scheme, and up to the limit of the amount of the maximum benefit recognised by the Social Security for such concepts (the excess, where applicable, will be taxed as income from work, subject to withholding, which must be entered in code A of form 190, together with the other non-exempt payments made to the same recipient).

• In the case of public employees not included in the Social Security system, the remuneration received from their paying entity during the childbirth, adoption or foster care and paternity leave referred to in letters a), b) and c) of article 49 of the revised text of the Basic Public Employee Statute Law, approved by Royal Legislative Decree 5/2015, of 30 October, or that recognised by the specific legislation applicable to them for situations identical to those set out above, and with the limit of the amount of the maximum benefit recognised by the Social Security for such concepts (the excess, where applicable, will be taxed as employment income, subject to withholding, which must be entered in code A of form 190, together with the rest of the non-exempt remuneration paid to the same recipient).

• Public maternity benefits received from the Autonomous Communities or local authorities.

It should be noted that only maternity or paternity benefits should be reflected in this subkey L.27 in the terms indicated above.All other exempt benefits included in Article 7(h) of the Personal Income Tax Act should be reported in subkey L.08.

The child support supplement provided for in article 11.6 of Law 19/2021, of 20 December, establishing the Minimum Living Income, came into force on 1 January 2022.

This supplement, can be granted to the beneficiary as an integral part of the VMI itself or, in certain cases, in a differentiated manner.

In both cases it is considered as a benefit paid as a Minimum Living Income, to be entered in the subkey L.29, subject to the exempt limit established in article 7.y) of Law 35/2006 on Income Tax (12,159.42 € in 2022;which is equivalent to 1.5 times the Public Indicator of Multiple Effect Income -IPREM - amounting to €8,106.28 in 2022).

The excess, if any, over this limit, shall be included in form 190, with code B.03, as they are similar benefits and aids provided for in Article 17.2.a).1 of the Income Tax Act, other than pensions and pension assets.

It is important to remember that this limit is joint for the important ones reflected by the paying entity in codes L.22, L.28 and L.29 (i.e. when, together with the minimum living income, other aid is received for groups at risk of social exclusion, such as the minimum insertion income, guaranteed income and similar aid from Autonomous Communities and City Councils).

When the minimum subsistence income is paid, it must be indicated whether or not this benefit includes, in any of the monthly payments made during the financial year, a child support supplement, by filling in the field "Child support supplement".

Royal Decree-Law 6/2019, of 1 March, amends, with effect from 8 March 2019, Royal Legislative Decree 8/2015 approving the Consolidated Text of the General Law on Social Security, recasting the former “Maternity Benefit” and “Paternity Benefit” into this new “Birth and Childcare Benefit” without distinction as to the holder of the benefit.

The aforementioned benefit should be entered on form 190 of the paying entity with code L, and subkey 27 (Public benefits for maternity or paternity exempt from personal income tax), given that this is simply a change in the formal name of the aforementioned maternity/paternity benefits, which are now called "Benefit for the birth and care of a child".

The reduction of the working day by half an hour is considered to be a protected situation, which, in accordance with the provisions of Article 37.4 of the Consolidated Text of the Workers' Statute Law, is carried out with the same duration and system by both parents, adopters, guardians for adoption purposes or permanent foster parents, when both work, for the care of the infant from the age of nine months to twelve months.

This is a new benefit, regulated in articles 183 to 185 of the Texto refundido de la Ley General de la S.S.S. (revised text of the General Social Security Act).

The referred-to public service is exempt from taxation under Article 7(z) of the LIRPF.It should therefore be entered on form 190, with code L.20

In accordance with Royal Decree 1148/2011, of 29 July, for the application and development, within the Social Security system, of the economic benefit for the care of minors affected by cancer or another serious illness, the aforementioned benefit, which is of a subsidy nature, is intended to compensate for the loss of income suffered by the persons concerned when having to reduce their working hours, with the consequent reduction in wages, caused by the need to directly, continuously and permanently care for the children or minors under their care, during the time of hospitalisation and continuous treatment of the illness.The subsidy, therefore, is predetermined by the effective reduction of the working day and by the circumstances in which it is carried out by the workers.

The DGT has expressed its views on this issue in binding consultations (inter alia, V2599-16, V0196-17 or V1628-18), confirming that this service is exempt from personal income tax under Article 7(z) of the LIRPF.It should therefore be entered on form 190, with code L.20

The regulation that approved this regularisation was Order PCM/1353/2021, of 2 December, which establishes an update of the contribution bases as of 01/09/2021, with the payment of the contribution differences derived from the update of the contribution bases to be made by 30/06/2022 .

With regard to tax allocation, in accordance with consultation V2625-21 of the Directorate General for Taxation, if the adjustments are made as from January 2022, it must be understood, in line with the aforementioned binding consultation of the DGT, that they must be deducted from the employee's pay slips in 2022, constituting higher deductible expenses for the employee in 2022, the year in which they become payable and not before.They will therefore be included in Form 190 for the financial year 2022 to be filed in January 2023.

The aforementioned precept states that, "in the sphere of the autonomous communities and local entities, payment must be made before 31 December 2022 and, in any case, before 31 March 2023".

As a general rule, remuneration must be imputed at the time it becomes payable by the recipient, in accordance with the provisions of art. 14.1.a) of the Personal Income Tax Act, without prejudice to its consideration as arrears if it is paid after the year in which it becomes payable, for reasons not attributable to the recipient (art. 14.2.b LIRPF).

However, in those cases in which the Autonomous Community or Local Corporation adopts the agreement on the increase in remuneration in the first quarter of 2023, will become due and, therefore, the allocation will take place in the financial year 2023 (in this sense, the consultation of the Directorate General for Taxation V1175-17).