Who in Spain will save €1,000 in 2023 thanks to income tax changes?
Thousands of workers in Spain will save €1,000 more this year due to an adjustment in personal income tax. Find out how and who will benefit.
This year, the Ministry of Finance will change the way they calculate the amount of Impuesto de la Renta para las Personas Físicas (IRPF) or personal income tax, you have to pay.
In total, more than 250,000 workers will benefit from the changes and in some cases, will save more than €1,000 per year.
Who will benefit?
It will mainly benefit those who earn less than €21,000 per year, however, those who earn between €22,000 and €35,200 per year will also be considered.
It also means that those with the lowest salaries will stop paying the same personal income tax as those with only slightly higher salaries.
Why is this happening?
Sources from the Ministry of Finance said: "we are facing a great tax reduction... The proposed changes seek to avoid errors that occur in specific family situations".
The aim is to put a stop to so-called tax gaps, by recalculating personal income tax charges so that there aren't such large differences between contribution amounts that are practically the same.
How will it work?
The reduction will be applied in different situations. For example, for couples, where one of the pair earns less than €1,500 per year or in the cases of single-parent families.
READ ALSO - Single parents in Spain: What benefits and aid are you eligible for?
According to the tax authorities, five percent of workers who are within the income tax bracket between €22,000 and €35,200 will benefit.
For example, up until now, if a married worker with two children earned €22,000 per year, they would be taxed €1,186.14, but if they earnt just one more euro - €22,001 for example, they would be taxed €2,303.22.
But in 2023, the Spanish tax authorities will only charge those who earn €22,001 euros, €1,186.57. That is just 43 cents more, meaning that they will be more than €1,000 better off, specifically, they will have made a saving of €1,116.65 compared with last year.
Comments
See Also
This year, the Ministry of Finance will change the way they calculate the amount of Impuesto de la Renta para las Personas Físicas (IRPF) or personal income tax, you have to pay.
In total, more than 250,000 workers will benefit from the changes and in some cases, will save more than €1,000 per year.
Who will benefit?
It will mainly benefit those who earn less than €21,000 per year, however, those who earn between €22,000 and €35,200 per year will also be considered.
It also means that those with the lowest salaries will stop paying the same personal income tax as those with only slightly higher salaries.
Why is this happening?
Sources from the Ministry of Finance said: "we are facing a great tax reduction... The proposed changes seek to avoid errors that occur in specific family situations".
The aim is to put a stop to so-called tax gaps, by recalculating personal income tax charges so that there aren't such large differences between contribution amounts that are practically the same.
How will it work?
The reduction will be applied in different situations. For example, for couples, where one of the pair earns less than €1,500 per year or in the cases of single-parent families.
READ ALSO - Single parents in Spain: What benefits and aid are you eligible for?
According to the tax authorities, five percent of workers who are within the income tax bracket between €22,000 and €35,200 will benefit.
For example, up until now, if a married worker with two children earned €22,000 per year, they would be taxed €1,186.14, but if they earnt just one more euro - €22,001 for example, they would be taxed €2,303.22.
But in 2023, the Spanish tax authorities will only charge those who earn €22,001 euros, €1,186.57. That is just 43 cents more, meaning that they will be more than €1,000 better off, specifically, they will have made a saving of €1,116.65 compared with last year.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.