Newnesses of Personal Income Tax for 2018
On July 4, 2018, Law 6/2018, of July 3, on the General Budgets of the State was published in the BOE. In it are presented, the tax changes regarding the Income Tax that come into force in the income statement of 2018, which will be submitted during 2019. We summarize the most important ones below.
- 1 Reduction for obtaining income from work
- 2 Newness in maternity benefits
- 3 News by large family or people with disabilities in charge
- 4 Changes in the deduction for investment in newly created companies
- 5 Introduction of the deduction in families formed by residents of the EU and EEA
- 6 Special tax withholds on the prizes of certain lotteries and bets
Reduction for obtaining income from work
With effects from July 5, 2018, the amounts that will reduce the net income from work are increased, while the amount below which this reduction will be applied increases.
Specifically, the reduction will be applied to taxpayers with net income from work below 16.825 Euros and who do not have income other than labor income above 6.500 Euros, excluding exempt ones.
The new amounts are:
- In taxpayers with net income from work less than or equal to 13.115 Euros: 5.565 Euros per year.
- In taxpayers with net income from work comprised between 13.115 and 16.825 Euros: 5.565 Euros minus the result of multiplying by 1,5 the difference between the work performance obtained and 13.115 Euros.
Newness in maternity benefits
With effect from January 1, 2018, the maternity deduction is increased by an additional 1.000 Euros when the taxpayer who has that right satisfies the expenses of custody in day care centers or authorized centers of infant education for children under 3 years of age.
However, in the year in which the youngest child reaches 3 years, this increase can be applied with respect to the expenses incurred after the fulfillment of that age until the previous month in which the second cycle of early childhood education begin.
News by large family or people with disabilities in charge
With effect from July 5, 2018, the amount of the deduction provided for in letter c) of number 1 of article 81 bis of the LIRPF is increased up to 600 Euros per year for each of the children who are part of the numerous family that exceeds the minimum number of children required for said family to acquire the status of a general or special numerous family, as appropriate.
It also includes a new assumption to which the deduction will be applicable: for the spouse not legally separated with a disability, provided that he or she does not have annual income, excluding exempt income, greater than 8.000 Euros or generate the right to apply the deductions provided in letters c) and d) from number 1 of article 81 bis of the LIRPF, up to 1.200 Euros per year.
Changes in the deduction for investment in newly created companies
With retroactive effects from January 1, 2018, taxpayers may reduce 30% (instead of 20%) of the amounts paid in the period by the subscription of shares or holdings in new or recently created companies.
The maximum deduction base will be 60.000 Euros per year (instead of 50.000 Euros) and will be formed by the acquisition value of the shares and participations subscribed.
If you want to expand the information regarding this deduction you can consult the article in which we develop its application.
Introduction of the deduction in families formed by residents of the EU and EEA
With effect from January 1, 2018, a new deduction is introduced on the IRPF in favor of those taxpayers whose remaining members of the family unit reside in another State of the European Union (EU) or of the European Economic Area (EEA), so they can not file a joint income tax return in Spain.
Through this deduction the amount to be paid is equated with that which would have been supported in case all the members of the family unit had been fiscal residents in Spain.
Special tax withholds on the prizes of certain lotteries and bets
With effects on July 5, 2018, the amounts exempted from this tax are modified.
In the year 2018, the prizes whose full amount is equal to or less than 10.000 Euros will be exempt. The prizes whose total amount is greater than 10.000 Euros will be subject to taxation with respect to the part of it that exceeds said amount.
In the year 2019, prizes whose entire amount is equal to or less than 20.000 Euros will be exempt. The prizes whose total amount is greater than 20.000 Euros will be subject to taxation with respect to the part of it that exceeds this amount.
In the year 2020 and later, the prizes whose full amount is equal to or less than 40.000 Euros will be exempt. The prizes whose total amount is greater than 40.000 Euros will be subject to taxation with respect to the part of it that exceeds said amount.
If you need advice to make your tax return, contact us. All procedures will be faster and you will ensure that you do them correctly.