The last 4 day of July, was published in the BOE 6 / 2018, of 3 of July, the General Budgets Law for the 2018 year.

La General Budgets Law for the 2018 year It incorporates a series of tax-related measures, among which the following stand out:

Tax on the income of natural persons:

Reduction by work income:

La General Budgets Law for the 2018 year establishes that with effects from 5 of July of 2018, the amounts that will reduce the net income from work are increased, and the amount below which this reduction is applied is increased. (Art. 20 L.IRPF is modified)

Before:

Applies:

Taxpayers with work income below 14.450 €, who do not obtain other types of income, excluding exempt ones, higher than 6.500 €.

Amount Reduction:

Net income from work equal to or less than 11.250 €: 3.700 € per year is reduced.

From 11.250 € to 14.250 € is reduced by applying a formula ..

Now

It applies:

Taxpayers with work income below 16.825 €, who do not obtain other types of income, excluding exempt ones, higher than 6.500 €.

Amount Reduction:

Net income from work equal to or less than 13.115 €: 5.565 € per year is reduced.

From 13.115 € to 16.825 € is reduced by applying a formula.

A transitory regime is established for the calculation of retention for this year 2018. (DA 47ª is added in the LIRPF).


Deduction for Investment in companies of new or recent creation:

La General Budgets Law for the 2018 year establishes that with effects from 5 of July of 2018, the amount and the maximum base of this type of deduction are increased. (Art. 68.1 LIRPF is modified).

Before:

Deduction of 20% amounts paid to this type of company, with a maximum deduction base of 50.000 € per year. (Deduction maximum year = 10.000 €).

Now

Deduction of 30% amounts paid to this type of company, with a maximum deduction base of 60.000 € per year. (Deduction maximum year = 18.000 €).

Maternity deduction:

La General Budgets Law for the 2018 year It establishes that with 1 effects of January of 2018, 1.000 € extra is added to the maternity deduction, when custody expenses are paid in daycare or authorized centers of infant education for a child under three years of age.

Limitations are established for each child: amount of contributions and Social Security or Mutual Funds and the total amount of the unsubsidized cash expense paid for each child.

You can not request the advance payment of this deduction increase.

(Art. 81 LIRPF is modified).

Deduction for large family or dependent disabled people:

La General Budgets Law for the 2018 year establishes that with effects from 5 of July of 2018, the amount of the deduction foreseen for these cases is increased up to 600 € per year for each of the children that are part of the large family that exceeds the minimum number of children required for said family has acquired the condition of large family of general or special category, as appropriate.

With the 5 effect of July of 2018, a new assumption is established with the right to receive the deduction of up to 1.200 €: spouse not legally separated with disability, with income, excluding exempt ones, less than 8.000 € and do not generate the deductions from the previous section .

A series of common rules is foreseen for the application of both deductions.

(Arts 81 bis and DA 42ª are modified and DT 33ª of the LIRPF is added).

Deduction applicable to taxpayers whose family resides fiscally in the EU or EEA:

La General Budgets Law for the 2018 year establishes that with the 1 effect of January of 2018, a deduction is established for the resident taxpayer in Spain (except if it has received a special tax regime) whose family is resident fiscally in another EU State or in the European Economic Area.

With this deduction the share of the tax that would have been equal if all the members of the family had resided in Spain is equated.

(DA 48ª is added in the LIRPF).

Special tax on the prizes of certain lotteries and bets:

La General Budgets Law for the 2018 year establishes that with effects from 5 of July of 2018, the exempt amounts of this tax are modified.

  • In the 2018 exercise, the first 10.000 € will be exempt.
  • In the 2019 exercise, the first 20.000 € will be exempt.
  • In the 2020 exercise, the first 40.000 € will be exempt.

(DA 33ª is modified and DT 35ª LIRPF is added).

Obligation to declare:

La General Budgets Law for the 2018 year It establishes that with modifications from the 1 of January of 2018 two modifications are introduced:

  • For the calculation of the joint limit of 1.000 € of different types of income that excludes the obligation to declare, the capital gains derived from public aid must be taken into account.
  • The amount of work income received by more than one payer, exclusive of the obligation to declare, is raised to 14.000 € (previously 12.000 €).

A transitory regime is established for the 2018.

(Art. 96 LIRPF is modified and a DT 34ª is added)

Corporate tax

Modifications to the Patent Box regime (income from certain intangible assets):

La General Budgets Law for the 2018 year specifies what income will be entitled to the reduction, it is clarified that expenses must be included in the denominator of the coefficient established to apply the reduction, what happens when negative rents are obtained, ... etc

(Art. 23 LIS is modified).

Faculty Administration check of fiscal assets in receivables:

La General Budgets Law for the 2018 year establishes that with effect from the 5 of July of 2018, the Tax Administration is expressly empowered to verify the determining circumstances of the right to the conversion of assets for deferred tax on credit due to the Public Administration, in particular the accounting losses .

Value Added Tax

Export exemption goods (travelers):

La General Budgets Law for the 2018 year establishes that with effect from the 5 of July of 2018, the requirement of the minimum invoice amount (90 €) is eliminated to obtain the VAT refund. You will have the right whatever the amount of the invoice.

(Art. 21.2º A) a) LIVA is modified)

Reduced tax rates:

La General Budgets Law for the 2018 year states that with effects from the 5 of July of 2018:

  • Entry into cinemas: the VAT is reduced to 10% (previously it was 21%)

(Art 91 is modified, One 2 6º LIVA)

  • Telecare services, home help, day and night care and residential care for people in situations of dependency: the application of 4% is extended when an economic benefit is granted that covers more than 10% of the price (it was previously required to cover 75% of the price).

(Art 91 is modified, One 2 6º LIVA)

Services provided by electronic means, telecommunications and broadcasting and television:

La General Budgets Law for the 2018 year It establishes that with 1 effects of January of 2019, modifications are established in the rules for locating these services provided by community entrepreneurs to individuals established in the territory of VAT application.

(Art. 70 is modified, One. 4º and 8º LIVA)


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Albert Pujol

Director Department of Inspections and Tax Procedures

DiG Lawyers

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