This year the Spanish tax office has started earlier than ever its campaign for collecting income declarations of residents in Spain, referring to the calendar year 2013; nevertheless the deadline for presenting the declaration is still 30 June 2014.
The updated ley de Emprendedores (Entrepreneurs law) that was launched at the end of September 2013 will introduce several items that will make your tax declaration slightly different than in previous years.
Who doesn’t have to declare?
Any resident in Spain that received only personal work related income less than 22,000€ over 2013 from a single source (if there is more than one source the quantity lowers to 11,200€), or received only capital income of less than 1.600€ or received only an equivalent property asset rent (in Spanish renta inmobiliaria imputada) of less than 1000€. The renta inmobiliaria imputada is equivalent to the 1.1% of the cadastral value if it was revised on or after 1994 or 2% of the cadastral value for any cadastral value assigned before 1994.
End of handwritten tax forms
The Spanish tax office won’t accept any more hand written declarations. For people not having access to a computer or Internet, it will be possible to fill the income declarations in one of the tax office service centres. If needed it will be possible to ask for an appointment and receive help from a tax consultant. The tax office encourages people to do the declaration online using a digital certificate that once installed on the computer identifies the person or use the PIN24H, a new system that was launched this year. In the latter, the tax office will send, when requested, an SMS with a temporary pin number that will be used for identification to fill the forms online. The pin will expire the morning of the following day at 2pm. The procedure for obtaining both PIN24H and the personal digital certificate are detailed in the tax office forms web portal at https://www.agenciatributaria.gob.es
Tax breaks related to the purchase of habitual place of residence
It won’t be possible anymore to receive tax breaks related to the purchase of the habitual place of residence if the property was purchased in 2013 (It will be still possible to have the breaks if the property was purchased in 2012 or before). Exception to this will be the region of Navarra and the Basque Country.
Incentives for “business angels”
Capital invested in a new company will allow a break of 20% of the amount invested, in the personal income tax. There will be a maximum break of 50,000€ per year, limited also to a maximum of 40% of the capital of the new company.
Breaks for capital invested in SLNE companies
Investors in the new type of Limited Companies that was created in Spain in 2013 i.e. SLNE (Societad Limitada Nueva empresa, a special type of limited company created specifically for small businesses) will receive a break of 15% in the capital invested with a maximum of 9000€ per year.
Rentals from mortgaged properties
The Spanish tax office considers the equivalent rent from the property the 1.1% of the cadastral value and in some cases 2% if the cadastral value was not updated (this doesn’t apply to the habitual residence). In case the interests paid for the mortgage plus other related expenses (like community of owners fees, property tax, amortisation and so on) are higher than what the owner receives as rentals, there will be “negative incomes” that will be used to lower other incomes of the taxpayer in the declaration.
Lottery prizes won’t be tax-exempts any longer
Prizes from national lotteries, the Spanish Red Cross and the ONCE will be taxable. This doesn’t apply from Pizes received before 2013. Pizes less than 2500€ will be exempt from taxation. Anything above this level will be taxed at 20% on the excess of 2500€. The tax will be collected at the source, by the organisation awarding the prize.
Renovation works in houses
Any works in a house with the objective to adapt it for the access of disabled people will be eligible to a 20% break with a maximum of 12,080€. Any improvement work in a house (for example installation of solar panels, replacement of electrical network, improvement of thermal isolation…) will receive a reduction of 15% of the amount invested. These are not considered “improvement works” – changing furniture, replacing tiles, installing air conditioning or painting works.