On 24 December 2022, Law 31/2022 on the General State Budget was published in the Official State Gazette (BOE), which includes tax modifications, such as:
A) Personal Income Tax:
– With regard to reductions, the amount for obtaining earned income is increased for certain income thresholds. Also, economically dependent self-employed workers are increased in 2 income brackets and there is a 10% reduction in the income from activities in objective estimation.
– Taxpayers who receive only earned income from more than one payer are not obliged to submit a self-assessment if the sum does not exceed €15,000 are not required to do so.
– The deduction percentage for expenses that are difficult to justify is increased to 7%, without modifying the limit of €2,000.
– The absolute limit for contributions to pension plans, €1,500, is increased by €8,500, provided that the increase is from employer contributions or employee contributions.
– The scale of savings includes two brackets: 200.000€-300.000€ at a rate of 27% and from 300.000€ 28%.
– The scope of the deduction is extended to €1,200 per working mother with two children under the age of 3 if, at the time of the child’s birth, they are receiving contributory or welfare benefits from the unemployment protection system.
– The imputation of real estate income will be 1.1% for properties located in municipalities where the cadastral values have been revised, modified or determined in accordance with the regulations.
B) Corporate income tax
– The rate is reduced to 23% for entities whose net turnover in the previous tax period is less than €1,000,000 and which are not considered as a group.
– For the years 2023, 2024 and 2025, accelerated depreciation is allowed, by multiplying the maximum coefficients by 2, for investments in new vehicles for the purpose of economic activities and which enter into operation in those years.
C) Value Added Tax
– -An exemption regime, similar to that of the armed forces, is established for operations with any State party to the North Atlantic Treaty.
– Exceptions to the reverse charge are included when transactions are carried out by persons or entities not established in the territory where the tax is levied.
– Provisions are included to better define the rules concerning the place of intra-Community sales of goods. Also, for the application of the threshold, the supplier must be established in only one Member State and the goods must be dispatched from that Member State.
– Modification of the basis for uncollectible receivables, e.g. the time limit to proceed with the recovery of VAT from the moment it is declared uncollectible is extended to 6 months.
– Tampons, pads, panty liners, condoms and other non-medicated contraceptives are taxed at the reduced rate of 4%.
D) Special Regime for Worker Cooperatives
– The number of salaried workers with an open-ended contract may not exceed 20% of the total number of members, if the number of members is less than 5, one salaried worker may be hired. However, if the number of partners is between 6-10, 2 may be hired.
– The cooperative may employ employees through any other form of contract, provided that the number of working days worked during the year does not exceed 25% of the total number of legal working days worked by members.
E) General Tax Law: rules are issued for the deferral and instalment payment of tax debts and penalties in pre-insolvency situations with 6, 12, 24, 36 months with different requirements in the instalments.
F) In other regulations: the legal interest rate is set at 3.25% and the default interest rate at 4.0625%.