New features in the IRPF 2023 introduced in the General State Budget Law for the year 2023. This law includes several tax measures that came into force on January 1st, 2023. Our experts in Tax Consulting summarize the aspects that we consider most interesting and relevant. All this so that you can be up to date in tax matters.
New features in the IRPF 2023
With effect from January 1st, 2023 and indefinitely, the following changes are introduced in the Personal Income Tax (IRPF)
Reduction for obtaining earned income
The threshold for applying the reduction for obtaining earned income is increased to e19,747.50. The amounts that reduce the net income are also increased.
In the first place, net income from work equal to or less than e14,047.5. It can be reduced by 6,498e per year.
In addition, net income from work between €14,047.5 and €19,747.5. 6,498 minus the result of multiplying by 1.14 the difference between the income from work and €14,047.5 per year.
New limit in the obligation to declare
It increases to €15,000 the limit of total income from work that sets the obligation to declare (before €14,000). It will be applied in the following cases:
Well that come from more than one payer.
Well that compensatory pensions of the partner or annuities for alimony are received.
- When the payer of the income from work is not obliged to withhold.
- When full earned income subject to a fixed withholding rate is received.
Withholdings and payments on account to be made on the earned income
For those that are paid or credited during the month of January 2023, corresponding to that month and to which the general withholding procedure is applicable
They must be made in accordance with the regulations in force as of December 31st, 2022. For income paid or paid as from February 1st, 2023, the withholding rate will be calculated based on the regulations in force as from January 1st, 2023 and, if applicable, it must be regularized in the first income from work paid or paid.
The reduction for obtaining income from economic activities is increased
The threshold for the reduction of income from economic activities is increased to €19,747.50. On top of that, the amounts that reduce the net income are also increased.
- Net income from economic activities equal to or less than €14,047.5. A reduction of €6,498 per year is allowed.
- Net income from economic activities between €14.047,5 and €19.747,5: €6.498 minus the result of multiplying by 1,14 the difference between the income from economic activities and e14.047,5 per year.
Increase in the percentage of expenses that are difficult to justify for fiscal year 2023
During the fiscal year 2023, the percentage of deduction for all deductible expenses increases to 7% (5% previously):
- Deductible provisions.
- Difficult to justify expenses.
However, the limit of €2,000 is maintained as the maximum amount of this expense.
Reduction of the net income calculated by the objective estimation method in 2023
For taxpayers in objective estimation or modules, a 10% reduction of the net income obtained in 2023 is allowed.
Extension of the exclusion limits of the objective estimation method for 2023
The limits established in the previous year are extended for 2023. Thus, the amounts that determined the exclusion from the objective estimation method continue to be:
- First, €250,000 for all economic activities, except agricultural, livestock and forestry activities, regardless of whether or not there is an obligation to issue an invoice.
- 125.000€ for the operations in which there is an obligation to issue an invoice when the recipient is a businessman.
- 250,000 for all agricultural, forestry and livestock activities.
- Finally, €250.000 in acquisitions and imports of goods and services for the whole of their business or professional activities, excluding those related to fixed assets.
New limits on the reduction for contributions to social welfare systems
The absolute contribution limit is set at €8,500, which was previously set at €1,500. The increase must have its origin in company contributions or in employee contributions. This increase will be limited according to the contributions themselves.
|Annual Contribution||Maximun employee contribution|
|Equal to or less than €500||The result of multiplying the company contribution by 2.5|
|Between €500.01 and e1,500||€1,250, plus the result of multiplying by 0.25 the difference between the company contribution and 500€.|
|More than e1.500||The result of multiplying the company contribution by 1|
Consequently, the calculation of the worker’s maximum contribution only changes if the company contribution is between €500.01 and €1,500.
The existing limit of €4,250 for:
- Self-employed contributions to simplified employment plans.
- Contributions to plans of which the self-employed person is the promoter.
It also applies to contributions to sectoral pension plans.
Accordingly, the financial limits of contributions to social welfare systems are also modified.
Increase in savings tax rates
The tax rate for capital income over €200,000 and €300,000 is increased as follows:
- A final bracket is added that taxes income over €300,000 at the rate of 28%.
- The penultimate tranche, capital income of €200,000 will be taxed at 27% (13.5% state rate and 13.5% regional rate).
Tax scale applicable as of January 1, 2023:
|Savings taxable base||Total tax liability||Remaining savings taxable base||Applicable rate|
|Up to Euros||Euros||Up to Euros||Percentage|
Extension of the maternity deduction
The deduction will not only be applicable to those women with children under 3 years of age who are entitled to the application of the minimum deduction for descendants registered with the Social Security or mutual insurance company. Now they can also benefit those who:
- At the time of the birth of the child are receiving contributory or welfare benefits from the unemployment protection system, or.
- At that moment or at any time thereafter, they are registered in the corresponding Social Security or mutual insurance scheme with a minimum period, in the latter case, of 30 days of contributions.
Reduction of withholding percentages on income from intellectual property
From January 1, 2023, the withholding percentages for this income are established as follows:
- Income from work derived from the elaboration of literary, artistic or scientific works in which the right to exploit them is assigned.
- The withholding percentage is reduced from 15% to 7%. Although the following requirements are established:
- The volume of such full income for the previous year is less than €15,000, in addition.
- It supposes more than 75% of the sum of the total income from economic activities and work obtained by the taxpayer in that year.
- Necessity of communicating to the payer the concurrence of these circumstances.
- Income from intellectual property, whatever its classification.
- The withholding percentage is reduced from 19% to 15%.
Imputation of real estate income
In the imputation of real estate income, 1.1% is established. Only for cadastral values determined by collective valuation.
In addition, it must be in accordance with the cadastral regulations in force since January 1, 2012. All this, for the tax period 2023.
Deduction for habitual and effective residence on the Island of La Palma
For residents during the fiscal years 2022 and 2023. They will be able to apply the deduction foreseen for the residents in Ceuta or Melilla.