What's new for Spain's 'La Renta' tax return in 2023?
Spain's annual income tax return is known as the 'la declaración de la renta' and the period in which to complete it has now begun. Here's what's new about it for 2023.
This year Spain's annual income tax campaign begins on April 11th and you must file your taxes for 2022.
Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas) and is commonly shortened to la renta and is a progressive tax, so you'll pay more, the more you earn.
What's new for Spain's La Renta tax return for 2023?
There have been plenty of tax changes in Spain over the last year that could affect you with adjustments to thresholds and new deductions introduced.
READ ALSO: La Renta: The important income tax deadlines in Spain in 2023
Savings tax
Large savings and capital income will be taxed at a higher rate in Spain in 2023. For taxable income over €200,000, the rate will be increased by one percent, from 26 percent to 27 percent. In addition savings of €300,000 or more will be taxed at 28 percent.
Private pension plans
For those with private pension plans, deductible individual contributions will now be capped at a maximum of €1,500 per year, instead of €2,000.
On the other hand, the maximum contributions to company plans with the right to deduction have risen from €8,000 to €8,500 per year, meaning that tax benefits will only apply to total contributions of up to €10,000.
Maternity deductions
In the past, only mothers with babies under three years old could apply for the maternity deduction, but now unemployed mothers or those who receive Spain's Minimum Living Income can also apply for the maternity deduction.
READ ALSO: The tax changes in Spain in 2023 that you need to know about
Rental and educational expenses
In Spain, certain tax obligations are delegated to each region, and for the 2023 campaign, there are 26 new deductions that have been introduced at a regional level, ranging from expenses and deductions on rent to education. Here are some of the regional changes that might affect your return:
READ ALSO - EXPLAINED: What are Spain’s new regional tax breaks?
- In Andalusia, a 15 percent tax deduction has been implemented, up to a maximum of €150, for educational expenses such as school resources, uniforms or clothing, and lunches.
- In the Balearic Islands, an incentivising tax break has also been created for those who welcome people displaced by the war in Ukraine.
- In Asturias, a new deduction has been created for young people under the age of 35 to help with rental costs, and the deduction for single-parent families has risen from €300 to €500 for taxpayers with incomes below €45,000.
- In Valencia, there is another deduction for the care of children and ascendants living in the same family unit.
- In Murcia, there is a new deduction for self-employed or employed women who have underage children or dependents, ranging from €300 to €400 euros per child or dependent person.
- In Galicia, a €250 tax break has been created for people with two dependent children.
IRPF
This year, the Ministry of Finance changed the way they calculate the amount of Impuesto de la Renta para las Personas Físicas (income tax) that you have to pay, so it's worth being aware of the changes before filling in your tax return.
In total, more than 250,000 workers will benefit from the changes and in some cases, will save more than €1,000 per year. The government has also raised the minimum exemption from €14,000 to €15,000 to help the most vulnerable in Spanish society.
There have also been some changes to income tax at a regional level, so whether or not it affects your tax return depends on where you live. Personal income tax has been retroactively 'deflated' in Madrid, Andalusia, Valencia, Murcia, Galicia and Catalonia, in order to help low-income families deal with the financial pressures of inflation.
Andalusia has reduced personal income tax to 4.3 percent for the lowest three income brackets; Murcia, 4.1 percent; and in Galicia it's now 4.1 percent for taxpayers with incomes below €35,000 a year.
READ ALSO: Madrid region offers tax break to draw foreign investment
New social security thresholds for self-employed
Autónomos (self-employed) will be paying social security contributions based on real income, instead of a set amount each month. Essentially anyone earning under €1,300 per month will be paying less in social security fees, those earning between €1,300 and €1,700 will pay the same amount as they do now – €294 per month, while anyone earning over €1,700 will be paying more.
Solidarity tax for the wealthy
As a complement to the Wealth Tax, as indicated by the Official State Bulletin (BOE), this new tax will mainly affect those living in regions where the tax on fortunes is partially or totally discounted, as is the case in Madrid or Andalusia. It is a temporary system and will be in force during the 2023 and 2024 financial years, and will then be subject to review.
This measure affects individuals who have a net worth of more than €3 million. There is also a minimum exemption of €700,000. It is divided into three sections: 1.7 percent for assets of €3 to €5 million, 2.1 percent for assets of €5 to €10 million and 3.5 percent for assets above €10 million.
Key dates
For all the other key dates, including all the deadlines you need, depending on how you file (online, by phone, in person) click here.
If you're unsure about how any of the above changes will affect you, it's important to talk to a professional such as gestor.
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This year Spain's annual income tax campaign begins on April 11th and you must file your taxes for 2022.
Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas) and is commonly shortened to la renta and is a progressive tax, so you'll pay more, the more you earn.
What's new for Spain's La Renta tax return for 2023?
There have been plenty of tax changes in Spain over the last year that could affect you with adjustments to thresholds and new deductions introduced.
READ ALSO: La Renta: The important income tax deadlines in Spain in 2023
Savings tax
Large savings and capital income will be taxed at a higher rate in Spain in 2023. For taxable income over €200,000, the rate will be increased by one percent, from 26 percent to 27 percent. In addition savings of €300,000 or more will be taxed at 28 percent.
Private pension plans
For those with private pension plans, deductible individual contributions will now be capped at a maximum of €1,500 per year, instead of €2,000.
On the other hand, the maximum contributions to company plans with the right to deduction have risen from €8,000 to €8,500 per year, meaning that tax benefits will only apply to total contributions of up to €10,000.
Maternity deductions
In the past, only mothers with babies under three years old could apply for the maternity deduction, but now unemployed mothers or those who receive Spain's Minimum Living Income can also apply for the maternity deduction.
READ ALSO: The tax changes in Spain in 2023 that you need to know about
Rental and educational expenses
In Spain, certain tax obligations are delegated to each region, and for the 2023 campaign, there are 26 new deductions that have been introduced at a regional level, ranging from expenses and deductions on rent to education. Here are some of the regional changes that might affect your return:
READ ALSO - EXPLAINED: What are Spain’s new regional tax breaks?
- In Andalusia, a 15 percent tax deduction has been implemented, up to a maximum of €150, for educational expenses such as school resources, uniforms or clothing, and lunches.
- In the Balearic Islands, an incentivising tax break has also been created for those who welcome people displaced by the war in Ukraine.
- In Asturias, a new deduction has been created for young people under the age of 35 to help with rental costs, and the deduction for single-parent families has risen from €300 to €500 for taxpayers with incomes below €45,000.
- In Valencia, there is another deduction for the care of children and ascendants living in the same family unit.
- In Murcia, there is a new deduction for self-employed or employed women who have underage children or dependents, ranging from €300 to €400 euros per child or dependent person.
- In Galicia, a €250 tax break has been created for people with two dependent children.
IRPF
This year, the Ministry of Finance changed the way they calculate the amount of Impuesto de la Renta para las Personas Físicas (income tax) that you have to pay, so it's worth being aware of the changes before filling in your tax return.
In total, more than 250,000 workers will benefit from the changes and in some cases, will save more than €1,000 per year. The government has also raised the minimum exemption from €14,000 to €15,000 to help the most vulnerable in Spanish society.
There have also been some changes to income tax at a regional level, so whether or not it affects your tax return depends on where you live. Personal income tax has been retroactively 'deflated' in Madrid, Andalusia, Valencia, Murcia, Galicia and Catalonia, in order to help low-income families deal with the financial pressures of inflation.
Andalusia has reduced personal income tax to 4.3 percent for the lowest three income brackets; Murcia, 4.1 percent; and in Galicia it's now 4.1 percent for taxpayers with incomes below €35,000 a year.
READ ALSO: Madrid region offers tax break to draw foreign investment
New social security thresholds for self-employed
Autónomos (self-employed) will be paying social security contributions based on real income, instead of a set amount each month. Essentially anyone earning under €1,300 per month will be paying less in social security fees, those earning between €1,300 and €1,700 will pay the same amount as they do now – €294 per month, while anyone earning over €1,700 will be paying more.
Solidarity tax for the wealthy
As a complement to the Wealth Tax, as indicated by the Official State Bulletin (BOE), this new tax will mainly affect those living in regions where the tax on fortunes is partially or totally discounted, as is the case in Madrid or Andalusia. It is a temporary system and will be in force during the 2023 and 2024 financial years, and will then be subject to review.
This measure affects individuals who have a net worth of more than €3 million. There is also a minimum exemption of €700,000. It is divided into three sections: 1.7 percent for assets of €3 to €5 million, 2.1 percent for assets of €5 to €10 million and 3.5 percent for assets above €10 million.
Key dates
For all the other key dates, including all the deadlines you need, depending on how you file (online, by phone, in person) click here.
If you're unsure about how any of the above changes will affect you, it's important to talk to a professional such as gestor.
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