As in every year around this time, spring and the good Spanish weather remind us of the Spanish Personal income tax filing season. The most punctual taxpayers have had the possibility of filing their tax return from April 01 in a campaign that will be extended up until June 30 of this year, although please remember that the deadline to domicile the payment of the tax by direct debit ends on June 25.
Between the most significant changes in relation to the tax return compliance, we summarize below:
✔ In relation to real estate properties:
i. The identification of the taxpayer’s fiscal domicile is made separately from the rest of the tax return. Upon accessing to the Hacienda web page services (“Rentaweb”) the taxpayer must ratify his fiscal domicile, so as to update its identification.
ii. Real estate properties owned by the taxpayer are listed in one single section in which the property use must be disclosed (permanent home, rented or at the owner’s disposal) as well as each expense concept and amount. When the property is rented and used by the tenant as a permanent home, the tenant’s Tax ID must be disclosed.
iii. In order to speed up refunds and reduce the number of requirements issued by the Spanish tax authorities, a new Annex “D” has been added to the tax return. It can be voluntarily filled in so as to include the Tax ID of certain expenses’ suppliers as well as the amount of each one of the expenses.
✔ In the area of professional and entrepreneurial activities subject to the so – called direct scheme, the list of income and tax – deductible expenses has been modified, with the aim of offering, in the future, the service of transferring data of these taxpayers to their tax returns.
In relation to the tax return contents, we remind you of the following criteria concerning employment income, which are worth taking into consideration:
✔ The Spanish Supreme Court has interpreted that the indemnity of seven days of salary per year worked with the limit of six months, foreseen for senior executives due to the employer’s termination, is applicable even if the parties have agreed that the employee is not entitled to any termination indemnity. Hence, as it is considered that there is a minimum mandatory amount, the indemnity is tax – exempt up to such limit, (Court Sentence of 05 Jan. 2019, Rec. 2727 / 2017).
✔ The Spanish General Directorate of Taxes has resolved that the Social security payments (“RETA”) paid by a company to its Director and declared in Form 190 as a fringe benefit, can be deducted from the Director’s employment taxable income, (CV0067 – 19, of 14 January).
✔ The Administrative Court (“TEAC”) reminds us that, in those cases when the employment income has not been paid by the employer in the fiscal year in which it was due, the employee cannot deduct any withholding tax corresponding to such employment income as long as it is not paid, even if the employer had paid the withholding tax to the Spanish Hacienda, (10 Feb. 2020 – Rec. 1057 / 2019).
Publicado el 05-2020 por PBS