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TAXES

Is it better to do a joint or separate tax declaration if you’re a couple in Spain?

The deadline for filing your Spanish annual income tax return is not far off now, but working out whether to file jointly or as an individual can be tricky. Here's everything you need to know in order to help you decide.

Is it better to do a joint or separate tax declaration if you're a couple in Spain?
Should you file a joint or separate tax return in Spain if you're in a relationship or have a family? (Photo by PIERRE-PHILIPPE MARCOU / AFP)

The tax season is upon us in Spain and there’s just one more month to file your annual tax returns for the year 2021.

The deadline for this year is June 30th 2022. 

As a general rule, anyone resident in Spain for more than 183 days who earned €22,000 or more or if it’s their first time filing, needs to complete a tax return. 

READ ALSO: Who needs to file an income tax return in Spain in 2021-2022?

Figuring out how to complete your tax return, what deductions you can make and what to declare can be difficult, but on top of all this, if you’re married or in an established relationship, you’ll also need to decide whether you want to file your return individually or with your partner.

Generally, income tax returns must be declared individually, but the Agencia Tributaria (Spanish Tax Agency) does allow you to fill one out as a couple or a family unit, provided you meet certain criteria.

The Agencia Tributaria defines a family unit, in the case of marriage, as “spouses, not separated and if any, minor children, except for those who are independent”.

In the event that there is no marriage or you are separated, a family unit is defined as: “A father or mother and all their children who live with one of the two and who meet the required requirements”.

Remember, when filing the familial situation you take into account is that which existed as of December 31st, 2021.

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

Is it better to fill out my tax return as an individual or as a couple?

Depending on your situation, you could end up paying more or less tax if you file as a couple rather than an individual. Joint returns can often mean you benefit from a series of tax reductions, but this option is not open to everyone and it may not always be beneficial to you.

Before you fill out your tax return, you’ll need to calculate whether it will be better for you to file on your own or with your spouse.

You can ask your gestor or your accountant to calculate this for you or you can use the 2021 tax income simulator. This is an online version of the Agencia Tributaria portal that makes it possible to create your declaration without actually having to submit your data, therefore you can work out which situation would be best for you. 

Remember that if you decide to declare as a couple this year, you can always go back to filing individually next year, if you choose. Your circumstances change year on year, meaning that some years it may be beneficial for you to do a joint declaration while other years it won’t.

When filing a joint return, keep in mind that it will include income of any kind obtained by all members of the family unit. If one of the members of the family unit files their income tax return individually, then the rest must also do the same. One spouse cannot choose to declare it on their own the other as a couple.

Generally speaking, if both spouses work, it’s preferable to file individually. Joint taxation is preferable when only one of the spouses works. Make sure to check with your gestor or accountant that this is true in your case.

READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one

If you live and work in Spain, you’ll need to calculate whether it will be better for you to file on your own or with your spouse. Photo: Surface/Unsplash

What are the advantages of filing your tax return jointly? 

One of the main advantages of paying taxes jointly is the reduction. This means you are able to offset income gains and losses jointly. In theory, it could end up saving you a lot of money, but it could also end up costing you more too.

The basic personal allowance for each person under the age of 65 is €5,550, however, for joint declarations, the allowance of the second taxpayer is established at €3,400. The reduction for single-parent family units is €2,150 per year.

Who can file a joint 2021-2022 Income Tax return?

According to the Agencia Tributaria, the following taxpayers can opt to declare their declaration jointly:

  • Spouses who are married and live with all their children under 18 or those who have been declared incapacitated when they become of legal age.
  • De facto couples – only one of the members can form a family unit with their minor children or disabled adults. The other member of the couple will have to make an individual declaration.
  • In those cases of divorce or separation, joint taxation will correspond to the person who has custody of the children on the date on which the Personal Income Tax (IRPF) is accumulated.
  • In those cases of shared custody, the option of joint taxation can be made by either of the two parents, and the other will have to make the declaration individually.

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For members

MONEY

Rising inflation in Spain: Six cost-cutting ways to fight it

With everything from food to electricity becoming more expensive, people in Spain will spend on average €1,100 more on daily costs in 2022 than the previous year. Here are some top tips for tightening your belt as inflation bites.

Rising inflation in Spain: Six cost-cutting ways to fight it

Rising inflation is a problem affecting economies the world over. Economists and politicians are proposing ways to slow inflation, to cut taxes, and to soften the impact on consumers.

In Spain, things are no different.

In late July, Spain’s National Statistics Institute (INE) reported that the Consumer Price Index (CPI) – the index used to measure inflation – rose by 10.8 percent in July, up from 10.2 percent in June and the fastest rate since September 1984, a 38 year high.

READ ALSO: Spain’s July inflation rate reaches new 38-year high

The prices of anything and everything from fruit and eggs to olive oil and petrol have jumped up, and the increases have been particularly pronounced in fuel and utility costs due to the double-pronged pressures of inflation combined with global fuel prices rising as a byproduct of Russia’s invasion of Ukraine.

Electricity costs have been reaching historic highs over the past year, with prices on Wednesday, July 20th, 124 percent higher than the same time in 2021, according to recent data from OMIE, operator of the Iberian energy market.

According to a survey by Sigma Dos, 43 percent of Spaniards have been forced to cancel, shorten, or change their holiday plans for the months of July and August.

And then, on top of all that, the European Central Bank (ECB) announced last week that it is raising interest rates at the end of July, in order to try and slow inflation, which will have a direct impact on consumers paying back loans and mortgages.

READ ALSO: How will rising interest rates affect my life in Spain?

According to the Family Budget Survey (EPF) conducted by the INE, the average Spanish family’s spending on food has increased by €620 year-on-year.

All in all, the perfect storm of pressures of family budgets has hit hard in Spain.

That in mind, The Local has put together a list of tips to help you fight inflation and save some money in Spain this summer.

1. Natural light

Spain is well known as one of the sunniest countries on the planet. Not only does its roughly 15 hours of light a day make it hot during the summer, but it also means there’s an abundance of natural light.

With electricity bills through the roof, an easy way to save on energy is to keep the lights off during the day and take advantage of the light by keeping curtains and blinds open.

It’s worth remembering, of course, that many properties in Spain are built to withstand the scorching summer temperatures, and, as a result, may have rooms that are dark and gloomy in order to keep the temperature down.

Though that’s good for the heat, it’s not ideal for energy savings.

If that’s the case, and you really need to put the lights on during the day, consider switching to LED bulbs, since they can save as much as 80 percent on the bill compared to traditional bulbs, and they last much longer – years longer, in some cases.

2. Regulate the aircon 

Keeping the curtains and blinds open may be good for saving on electricity bills, but what about the heat?

With Spain in the midst of record-breaking summer heatwaves, during the hottest months Spaniards are dependent on their fans and air-conditioner units.

Regulating your use of air-con can help you save on bills. The ideal temperature should be between 24C and 26C and remember that for each degrees you drop the temperature, the energy output goes up by around 8 percent.

READ ALSO: Ceiling fan vs air con in Spain: Which offers the better price-coolness ratio

At night, many Spaniards opt to open the windows and keep the room ventilated as opposed to falling asleep with the aircon or fan on and racking up the bill.

READ ALSO: Spain to cut electricity tax by half to ease inflation pain

3. Shop around

An age old saving trick: shop around. 

Food prices in Spain have jumped over the course of 2022.

According to INE figures, in June the prices of 46 household products were more expensive and above the overall CPI rate of 10.2 percent.

These include eggs (23.9 percent more expensive); butter (23.1 percent); whole milk (21.1 percent); fresh fruit (19.3 percent); baby food (16.7 percent), poultry meat (14.1 percent), bread (13.9 percent); beef (13.1 percent) and or cheese (10.5 percent).

Being more creative with your shopping can help save on prices.

Fruit and veg shops (fruterías) are often far cheaper per kilo than the chain supermarkets, as are discount shops like Lidl and other local supermarkets. Consider going to the butcher (la carnicería) to save on meat.

Before going shopping, look online and compare prices between the different supermarkets. Make a list, and consider going for the supermarket’s line of own-brand products as opposed to more expensive brands.

As a famous British supermarket chain always reminds us – every little helps

4. Loyalty cards

That in mind, another way to soften the impact of inflation is to take advantage of promotional offers and loyalty cards. Spanish supermarkets often have 2×1 or 3×2 promotions, discounts, and savings when buying in bulk – particularly on dairy and poultry products. 

Consider getting loyalty cards at your local supermarket to make savings, and even at clothing stores, hairdressers and restaurants if they offer them. Loyalty cards not only offer discounts; you can often accrue a free service or product – shopping delivery, haircut, meal – by giving them repeat business.

5. Washing machine – know the peak and off-peak hours

With electricity bills historically high, Spain suffering heatwaves throughout the summer, and all this talk of fans and air-conditioning and keeping rooms ventilated, knowing the peak and off-peak electricity tariffs in Spain is an essential way to make savings and help right inflation.

The washing machine is well known as an appliance that uses a lot of electricity and takes a long time. With bills skyrocketing, and the price of electricity on the wholesale market exceeding €200 per megawatt hour (MWh), rising to €300/MWh during peak hours of the day, many Spaniards have taken to using their washing machines at times of the day that offer the cheaper tariffs.

READ ALSO: Inflation hack: what time should I use the washing machine in Spain?

From Monday to Friday, the cheapest time to use the washing machine is during the flat and off-peak slots. It may not be ideal, but by putting the washing machine on during the night, from 00:00 to 8:00 (off-peak), or in the morning, from 8:00 to 10:00 (flat), the kWh price can be significantly lower than during peak hour.

Similarly, another good time to use the washing machine, and perhaps the most convenient without being too costly, is after lunch from 2:00 p.m. to 6:00 p.m during another flat-rate session.

Fortunately, weekends and holidays correspond uninterruptedly with the off-peak time slot and there is, as a result, very little variation in prices depending on the time of day you use the machine, so you can wash your clothes at the weekend with worrying about racking up a huge bill.

Peak and off-peak times: 

Horas punta – peak hours (most expensive): 10-14:00h and 18-22:00h on weekdays.

Horas valle – off-peak (cheapest): 00-8:00h on weekdays; 24h on weekends and national holidays.

Horas llana flat rate (intermediate tariff): From 8-10h14-18h and 22-24h on weekdays.

6. Electronic devices

Although the pandemic jump started the working from home trend (teletrabajo in Spanish) and has many advantages, in the context of record-high inflation and utilities bills, it also has its negatives, like increased bills because you’re continuously using electrical devices such as computers.

If you work from home, consider using LCD screens – which save, on average, up to 37 percent more energy than normal screens – and try not to leave devices on standby.

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