The declaration of the year, almost back to normal

Personal income tax
WRITTEN BY Jaume Carles i Freixas
02 Apr, 2023 — 9 min
The declaration of the year, almost back to normal

We are entering, as every year, the campaign for the income tax declaration. This campaign to settle our fiscal obligations regarding income and assets for the 2022 financial year began last April 11. There are no changes in the deadline for submitting declarations, which will conclude on June 30 (if the result is to be paid with bank domiciliation, the last day will be June 27).

The declarations of the last two years were marked by the pandemic. In this year's income tax, the problems derived from Covid-19 will still linger, such as the consequences of ERTO payments, the Minimum Living Income, or various aids that have been received by the self-employed or vulnerable families.

The personal and family minimums have been frozen for years, so the impact of inflation affecting all pockets will continue to represent a hidden increase in this tax in a generalized way.

On the negative side, we must point out the new reduction from 2,000 euros to 1,500 euros in the maximum contributions for individual pension plans. Although this measure has been compensated with deductions for corporate contributions to social security systems, allowing an additional contribution of 8,500 euros, the effective application for the 2022 fiscal year will still have been very minimal.

As positive novelties, we trust that this year the new deductions for energy efficiency improvement works in homes, introduced by Royal Decree-Law 19/2021 and extended for one more year in all its modalities by Royal Decree-Law 18/2022 of October 18, will have more impact. These must be justified with the competent technical certificates for the required reductions in each of the modalities.

We also highlight, as a positive, the extension of the maternity deduction to all those mothers who were in a legal unemployment situation from January 1, 2020, until December 31, 2022, considering that they continue to carry out an activity on their own or for others, for which they are registered with Social Security. The regularization of the deductions from 2020 and 2021 can also be made in the 2022 declaration itself.

Other modifications that we can also qualify as positive have a more specific scope and in many cases originate from recent jurisprudence. A case that affects many taxpayers is the recent Supreme Court ruling of February 28, 2023, concerning former affiliates of the Banking Labor Mutual Society, who contributed to this entity between January 1, 1967, and December 31, 1978, the date from which the aforementioned mutual society was integrated into the National Institute of Social Security. Well, the retirements they are receiving have a partial exemption from IRPF that until now the Tax Agency did not accept (application of the second transitional provision of the IRPF Law). Depending on the time worked and contributed during that period, it may mean that they have 25% of the pension not subject to IRPF. This, for its application in the 2022 exercise, but they can also rectify the self-assessments of the 4 non-prescribed exercises up to the moment (2018-2019-2020 and 2021). Obviously, this will require well-documented requests.

Finally, we highlight another positive modification, in this case for farmers and ranchers who pay taxes under the modular regime, to whom a partial compensation for the increase in costs they have suffered is offered, through new reductions of the net income that will be deducted based on the costs justified with invoices for the purchase of agricultural diesel and fertilizers. A general reduction of 15% is also applied to all agricultural activities in modules. At the time of writing these lines, the provision that usually comes out to fix reductions of the net income of agricultural modules, according to the region where the operations are developed, to take into account adverse circumstances such as drought and others, has not yet been published in the BOE.

Given the limited extension of this article, we cannot get into all the casuistry of the various types of income and capital gains. Both these aspects and others derived from the jurisprudence and administrative doctrine that have come to light, make advisable the intervention of continued professional management that allows giving maximum security to our declaration.