Personal Income Tax (IRPF) 2018 with new features

On April 2, 2019, the 2018 Personal Income Tax (IRPF) 2018 declaration campaign began. As a consequence of the publication in the B.O.E. of Law 6/2018 of 3 July on the General State Budget for 2018, a series of modifications have been introduced that affect Personal Income Tax (IRPF) 2018, and which it will be important to take into account when preparing income.

Thanks to our experts in Tax Consulting, we list the main new features we are facing this year.

Personal Income Tax (IRPF) 2018. Obligation to declare

The limit on the obligation to declare in the case of receiving income from work from more than one payer is modified to 12,643€. In reality, the new threshold for being obliged to file a return when there is more than one payer has been set at 14,000€ but in 2018 this only applies from 5 July 2018, so the proportional calculation gives the aforementioned figure of 12,643€.

The threshold for those who obtain their remuneration from the work of a single payer is maintained at 22,000€ per year.

In order to avoid that those taxpayers who would not have been otherwise obliged have to declare because they have received small amounts of public aid, a joint limit is established excluding the obligation to declare of 1,000€ for imputed real estate income, full returns on movable capital not subject to withholding derived from Treasury bills and subsidies for the acquisition of officially protected or priced dwellings and for capital gains derived from public aid.

Reduction for taxpayers with low incomes

Taxpayers with net labour income of less than 16,825€ will benefit from a reduction in the calculation of such income for the purpose of calculating their tax base. This reduction amounts to 5,565€ per year for taxpayers with net labour income of less than 13,115€. The amount of the reduction decreases proportionally for taxpayers with net labour income between 13,115€ and 16,825€.

However, in 2018 the reduction only takes effect from 5 July 2018, so a proportional calculation will be necessary to determine the amount applicable in this declaration.

Deductions

Deduction for investment in new or newly created companies. 30% may be deducted (previously this percentage was 20%). Of the amounts paid in 2018 for the subscription of shares or holdings in new or newly created companies that meet certain requirements. The maximum deduction base is also increased from 50,000€ to 60,000€ per year.
Deduction for income obtained in Ceuta and Melilla. The deduction percentage is raised to 60% (until now it was 50%).
Deduction for maternity. It may be increased by up to 1,000€ in addition to the 1,200€ per year already in force. When the taxpayer pays expenses for the custody of children under the age of three in authorised nurseries or kindergartens. Provided that they were not considered to be exempt income from work in kind.
Deduction for large family or dependent disabled persons. The amount is increased up to 600€ per year for each of the children who form part of the family and which exceeds three (five in the case of a special large family).
A deduction of 1,200€ per year is created for a spouse who is not legally separated but has a disability. Provided that you do not have annual income (excluding exempt income) that exceeds 8,000€ per year. And that same person does not also generate the right to any other taxpayer to the deductions for descendant or ascendant with disability.
Deduction for family units formed by tax residents in Member States of the European Union or the European Economic Area. This deduction equates the quota to be paid to the one they would have borne if all the members of the family unit had been tax residents in Spain. It will not be applicable when any of the members have opted to pay tax under the special scheme for posted workers of Personal Income Tax.

Exemptions

Special levy on certain lottery prizes and bets. The amounts exempt from this levy are modified (with a transitional regime). Thus, prizes whose full amount is equal to or less than the following amounts will be exempt from taxation:
- For fiscal year 2018:
  - Until 4 July 2018: €2,500.
  - From 5 July 2018: €10,000.
- For the financial year 2019:
  - The exempt amount is €20,000.
- For 2020:
  - The exempt amount is €40,000.
Exemption for income corresponding to maternity and paternity benefits received during 2018.

Deadline for submission

Most importantly, the deadline for submission will be between 2/April and 1/July 2019 inclusive. The last day for filing by direct debit is 26/June 2019. If this date is exceeded and your return has a result to be paid, you will have until July 1 to be able to file it. With an NRC code (Complete Reference Number) obtained from your collaborating entity.

So, if you need assistance in your Personal Income Tax (IRPF) 2018 declaration, you can count on our experience. Do not hesitate to contact us.