BarcelonaThe income tax return campaign returns this 2021 with several new features. The most important affects savers who have money in personal pension plans, as less can be deducted, as well as increases in personal income tax for higher incomes and changes in the taxation of rents for homes and commercial premises. .
Incentives for company pension plans
In 2021, the changes introduced by the Spanish government in the deductions of pension plans came into force, which aim to “encourage business plans”, explains Carme Jover, president of the tax commission of the College of Economists and professor at the Barcelona School of Management at UPF. In Spain, as in many other parts of Europe, the proportion of the working-age population is declining every year and, in addition, real wages have long been stagnant, while the number of pensioners is growing every year.
To understand this year’s changes, we must first understand that there are two types of pension plans: individual and business plans. The first are those owned by a natural person, who contributes to the fund until he retires and collects it. The latter are what companies do for their employees. In this case, they also have a person as their owner – in this case an employee – but the contributions are made by the company that employs them. In addition, the worker can, if he wishes, make personal contributions from his salary.
Until now, the individual plans made it possible to deduct from the income tax return the contributions made that year up to a maximum amount of 8,000 euros. This figure is now reduced to 2,000 euros.
Workers who have a business plan can continue to deduct the 8,000 euros of contributions made by the company to their plan. In other words, the contributions are made by the company but the tax reduction is enjoyed by the employee. In addition, he can also add his personal contributions to the plan up to a maximum of 2,000 euros.
Thus, a worker with a business plan can get a deduction of 10,000 euros. If the plan is individual, the maximum is 2,000 euros.
New types of personal income tax
Personal income tax (IRPF) is the tax that affects the most people when the return is made, as it is paid by all employees – employees and the self-employed -, pensioners and property owners who collect derivative income (for example, rent payments, investment fund returns, or business dividends).
With regard to the tax that affects income from work – that is, salaries – this tax has two tranches, one established by the Spanish government and another established by the regional administrations. With the declaration of 2021, the state introduced a new section for salaries over 300,000 euros per year.
If the state section is combined with that established by the Generalitat, in Catalonia salaries in excess of these 300,000 euros will be paid 50%. Jover points out that Catalonia –along with some other community– has the highest maximum rate in Spain.
In addition, personal income tax also taxes capital income, which is set by the state. In 2021, a new upper section of 26% will enter into force for incomes exceeding 200,000 euros.
Cryptocurrency box
Another novelty is the inclusion of a specific box to declare investments in cryptocurrencies, which until now went to the section on other economic assets. However, it does not change the taxation, as they continue to treat any income from savings and capital and therefore tax the corresponding personal income tax in case of profit.
Rental Deductions for Landlords
The statement also authorizes deductions for property owners – if they are not large landlords – who reduced the rental prices of their properties during the first quarter of 2021. In the case of rentals of commercial premises and offices, a deduction is allowed. of the entire rent reduction, provided that the rental companies are from sectors affected by the pandemic.
In the case of rental housing, it has always been possible to deduct 60% of rent reductions, but now the rent must have been paid by the landlord. Until now it could be deduced even if the rent had not been declared and caught on an inspection.
Deductions for home renovations
In the real estate sector, the Spanish government approved a decree last year to encourage real estate reforms in two areas. The first is a 20% deduction – with a limit of 5,000 euros – of the cost of housing renovations to reduce heating consumption by 7%.
The second is a deduction of 40% of the cost of the works to increase the energy efficiency of the usual family home up to an A or B efficiency certification, with a maximum limit of 7,500 euros per home. The same measure also applies to the renovation of residential buildings, but in this case the tax cut is higher: 60% of the cost of the works and a limit of 15,000 euros deductible.