In the Personal Income Tax (IRPF) full income from work is considered “all consideration or profit, whatever its denomination or nature, monetary or in kind, that derives, directly or indirectly, from personal work or of the labor or statutory relationship and do not have the nature of income from economic activities”.
And they are characterized by the fact that they include all the considerations or utilities, whatever their denomination or nature, monetary or in kind; that derive, directly or indirectly, from personal work or from the labor or statutory relationship of the taxpayer; and, furthermore, they do not have the nature of income from economic activities.
Thus, income from activities in which, regardless of the contribution of personal work, the taxpayer carries out business or professional activities, is excluded.
In particular, the following are included in this category of income: wages and salaries; unemployment benefits; remuneration for representation expenses; allowances and allowances for travel expenses, except locomotion and those considered normal maintenance and stay in hospitality establishments with the established limits.
The contributions or contributions paid by the promoters and employers of pension plans when attributed to the people to whom the benefits are linked.
Exempt income from work in kind
Study expenses for updating, training or recycling of employed personnel are not considered income from work in kind. Included in this concept are the studies arranged by institutions, companies or employers and financed directly or indirectly by them, even if their effective provision is carried out by other people or specialized entities, provided that their purpose is the updating, training or recycling of personnel.
In addition, the studies must be a requirement of the development of the activities of the personnel or the characteristics of the jobs.
In these cases, locomotion, maintenance and stay expenses that are exempt from tax are governed by the general rules.
Since January 1, 2017, it is understood that the studies have been arranged and financed indirectly by the employer when they are financed by other companies or entities that market products for which it is necessary to have adequate training on the part of the worker, provided that the employer authorizes such participation.
Expenses for premiums or quotas for occupational accident or worker’s civil liability insurance are not considered income from work either. These premiums must cover solely and exclusively the risk of accident at work or civil liability occurring to employees in the exercise of their occupations.
On the contrary, any insurance policy contracted by the company in favor of its employees that covers risks or contingencies outside of work activity and that covers, on the other hand, not only the worker himself but also, constitutes remuneration in kind. where appropriate, the spouse and children.
An occupational disease is considered an accident at work or a variety thereof, and as long as an express exclusion is not made in the conventional legal relationship, the concept of an accident at work includes occupational disease, the only variation being that occupational disease is based on a legal presumption arising from a double listing of activities and illnesses.
Finally, loans with an interest rate lower than the legal interest rate for the money arranged prior to January 1, 1992 are not considered remuneration in kind, provided that the principal had been made available to the borrower prior to said date.
Benefits in the form of capital
In 2021, the transitional reduction regime cannot be applied to benefits received in the form of capital derived from pension plans, social security mutuals and pension plans insured by contingencies in 2011 or previous years.
Tax consideration of the Erte
Both the measures adopted in terms of temporary suspension of contracts and temporary reduction in working hours (Erte) are considered income from work fully subject to personal income tax, both in its version of reduced working hours and suspension of employment contracts.
It is not in any case a dismissal since once the circumstance that gave rise to the Erte ends, the employer has the obligation to reinstate the affected workers in the same conditions in which they were prior to its application.
If a taxpayer who was in a situation of Erte entered more than 14,000 euros in 2021 and if he did so with two or more payers, the sum of the second and the following being greater than 1,500 euros, he must file the Income statement. On the other hand, if we have only received income from Erte in 2021, but these do not exceed 22,000 euros, there is no obligation to declare it.
It should be noted that Sepe does not always apply withholdings to its payments, so the affected taxpayer may find that in the income statement it will be necessary to adjust this gap and pay what corresponds.
Extraordinary benefits for cessation of activity
This is a benefit or aid created to provide coverage to self-employed workers who have been forced to suspend all their activities due to the declaration of the state of alarm for the management of the health crisis situation caused by Covid-19. It is also for those seasonal self-employed workers who have reduced their activity.
The taxation for this year will affect a total of four extensions -some complete and others partially- of the cessation of activity.
Work income by express legal provision
By express legal provision, in any case, the benefits derived from the social welfare systems are considered to be income from work; the amounts paid by reason of the position; income from courses, conferences, symposia, seminars and the like; those for the elaboration of literary, artistic or scientific works; the remuneration of administrators and members of representative bodies of companies; compensatory pensions received from the spouse and annuities for food; the special rights of economic content reserved by the founders or promoters of a company.
Also, they are the non-exempt scholarships; remuneration to collaborators in humanitarian or social assistance activities; the remuneration derived from labor relations of a special nature; and the contributions made to the protected assets of people with disabilities.
The Minimum Vital Income (IMV), as a benefit, does not have consideration of work performance of those established in this section in the part that exceeds the exemption provided.
Pension plans
Work income is the benefits received by the beneficiaries of the pension plans and those received from the pension plans, regardless of the contingency covered by them, such as retirement, total and permanent work incapacity for the habitual or absolute profession and permanent for all work and great disability, severe dependency or great dependency and death of the participant or beneficiary.
This same consideration is maintained, regardless of how the benefit is collected: income, capital or in a mixed form, income and capital.
The amounts received for the disposition of the consolidated rights of the pension plans in exceptional cases referring to serious illness or long-term unemployment are also considered income from work. These amounts have the same tax treatment as pension plan benefits.
Social welfare mutual
The integration into the tax base of the benefits received from the Social Security Mutual Funds is carried out according to the nature of the contingency covered.
In the case of retirement or disability benefits, they are included in the tax base of the recipient, as income from work, exclusively to the extent that their amount exceeds the contributions that could not be subject to reduction or reduction in the tax base. for failing to comply with any of the legal requirements provided for this purpose.
In the case of contributions made before January 1, 1999, when the amount of the contributions that could not have been subject to reduction or reduction in the tax base cannot be proven, 75% of the benefits received will be integrated.
Business pension plans
The retirement and disability benefits received by the beneficiaries of collective insurance contracts, other than corporate social welfare plans, which implement pension commitments assumed by the companies are included as work income in the tax base to the extent that their amount exceeds the contributions imputed for tax purposes and the contributions directly made by the worker.
The benefits received by the heirs due to the death of the insured worker do not constitute income from personal work as their perception is subject to Inheritance and Donation Tax (ISD).
Insured pension plans The benefits received by the beneficiaries of the insured pension plans are in any case considered work income.
Insured pension plans are legally defined as insurance contracts that must meet the following requirements: the taxpayer must be the policyholder, insured and beneficiary; the covered contingencies must only be: retirement; total and permanent work incapacity for the habitual profession or absolute and permanent for all work, and severe disability; death of the participant or beneficiary and severe dependency or great dependency of the participant. You must, however, have retirement coverage as your main coverage.
The regulations also require that they have to offer a guarantee of interest and use actuarial techniques. The condition of the contracted policy must expressly state that it is an insured pension plan.
The policyholders of the insured pension plans can unilaterally mobilize their mathematical provision to another insured pension plan of which they are policyholders, or to one or several of their individual or associated system pension plans.
Once the contingency has been reached, mobilization will only be possible if the conditions of the plan allow it.
Income from political offices
Work income is considered to be the amounts paid, by reason of their position, to Spanish deputies in the European Parliament, to deputies and senators of the Cortes Generales, to members of autonomous legislative assemblies, councilors of town halls and members of Provincial councils, island councils or others…
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