Information Update nº 2 – April 2024

Mar 28, 2024Informative notes

INCOME TAX CAMPAIGN: Fiscal Year 2023:

On April 3rd, the period for the preparation and filing of the Personal Income Tax (IRPF) and Wealth Tax (IP) return begins, which ends on July 1, 2024.

As every year, we strongly advise you not to accept the drafts sent by the Tax Agency, without first being reviewed and checked, as they may be missing information or have some incorrect data.

The acceptance of the draft does not exempt them from responsibility for the erroneous data they may contain, they are not binding, so any error that the draft has in case of verification, the taxpayer is responsible for what is declared and can lead to the imposition of penalties.

Having stated the above, we remind you of the points that we consider most relevant to take into account:

1. Self-employed.

One of the main novelties of the 2023 income tax campaign focuses on the self-employed who are obliged to declare, as the minimum threshold of €1,000 of income for which an entrepreneur and/or professional was exempt from filing the Income Tax return is eliminated.

Until last year, the self-employed could deduct 5% for expenses that are difficult to justify with a limit of €2,000 per year. This year the percentage increases to 7%.

2. Obligation to declare.

In general, it is not mandatory to declare for full income from work whose amount does not exceed 22,000 euros gross per year when there is only one payer or 15,000 euros when income is received from more than one payer, provided that the sum of income obtained by the second and other payers exceeds 1,500 euros.

3. Start-ups.

50% (previously 30%) of the amounts paid in 2023 for the subscription of shares or participations in newly created companies with a maximum base of €100,000 (previously it was €60,000) can be deducted.

4. Acquisition of electric vehicles.

A new deduction is introduced for taxpayers who, between 30 June 2023 and 31 December 2024, acquire a new electric vehicle not used for economic activity, or pay an amount on account representing at least 25% of the acquisition value. Deduction of 15% with a maximum annual base of €20,000.

Along with this deduction, a deduction has also been established for taxpayers who install, in a property they own, a battery recharging system for electric vehicles.

5. Wealth Tax.

The great novelty, with respect to the Wealth Tax, is for tax residents in Madrid, since on December 21, 2023, Law 12/2023 was published by which the Community of Madrid modifies on a temporary basis, and only applicable while the Temporary Solidarity Tax on Large Fortunes (ITSGF) is in force, the current rebate

applicable to the Wealth Tax, establishing instead a variable rebate for Madrid taxpayers affected by the ITSGF to satisfy in the Wealth Tax. Based on this, taxpayers not affected by the ITSGF will continue not to pay the Wealth Tax.

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