Income 2018 – 2019 | Personal income tax deductions: these are the main deductions

Less than a week before this year’s rental campaign starts (next April 2). It is time to collect documentation, soak up and review all our data.

The deductions in the Income Statement make the difference between entering or returning. It is important to know them and know if you are entitled to them because most are not included in the draft the first time the right is generated, and others such as rental or purchase must be included every year by the taxpayer. .

What are the main deductions in personal income tax?

Deduction for investment in primary residence: Transitional regime

The deduction for investment in primary residence was abolished in 2013, but continues to be applied without changes for those taxpayers who bought before January 1 of that year, in a transitory regime. You can deduct 15% of the mortgage expenses up to a limit of 9,040 euros. Although it is doomed to disappear, it is still one of the most important reliefs to reduce the bill of the Income Tax Return. In total, it is expected that 3.8 million taxpayers continue to benefit from this aid to distribute 1,034 million tax benefits.

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In order to apply the transitory deduction regime, taxpayers are required to have applied the deduction for said dwelling in 2012 or in previous years, “unless they have not yet been able to apply it because the amount invested in it has not exceeded the amount exempted by reinvestment or the effective bases for deduction of previous homes”, clarifies the Tax Agency. So people who used housing accounts intended for the first acquisition or rehabilitation of the habitual residence will not be able to use this relief.

But taxpayers who had paid amounts prior to January 1, 2013 for rehabilitation or expansion works of the habitual residence may also benefit from it, provided that the aforementioned works are completed before January 1, 2017. As, likewise, taxpayers who have paid amounts to carry out works and installations to adapt the habitual residence of people with disabilities prior to January 1, 2013, as long as the aforementioned works or installations are completed before January 1 of 2017. Boxes 547 and 548, and annex A.1.

Deduction for rental of the habitual residence: Transitional regime

Something similar happens with the deduction for rental of habitual residence. The tax incentive was abolished for taxpayers with lease contracts formalized as of January 1, 2015, maintaining a transitory regime for taxpayers with contracts prior to that date, being able to apply the deduction in identical terms and with the same conditions. For 2018, the Treasury trusts that the amount of social benefits for this concept will fall by 16% to 64 million. Boxes 562 and 563, and annex A.1.

Extension of the deduction for maternity

From January 1, 2018, the amount of the deduction for maternity may be increased by up to an additional 1,000 euros, on top of the deduction of 1,200 euros for children under three years of age. Unlike the general deduction for maternity, taxpayers entitled to the application of the additional increase for custody expenses cannot request their payment in advance from the Tax Agency, but instead . In order to be entitled to these deductions, taxpayers must carry out an activity on their own account or as an employee and must be registered in the corresponding Social Security or mutual insurance scheme. From the Tax Agency they remember that it is unfeasible if the unemployment benefit or subsidy is charged or in situations of voluntary leave. Boxes 611, 612 and 613.

Deduction for large family, ascendant with two children or for dependent persons with disabilities

As of July 5, 2018, the General State Budget Law for 2018 expands deductions for dependent persons with disabilities and increases the deduction for large families. As these deductions came into force from the month following their publication, for the 2018 Income Statement, 5 months would be applicable, from August to December, both inclusive. The deduction of 1,200 euros for a large family and 2,400 euros for being a large family in a special category, will be increased by up to 600 additional euros per year for each of the children who exceed the large or special family limit. For the 2018 financial year, it is only possible to apply up to an additional 250 euros for each of the children, for the months of August to December. Box 660 and 661

For dependent persons with disabilities, the deduction amounts to up to 1,200 euros for ascendants and descendants. A new assumption is established that includes spouses with disabilities of up to 1,200 euros. The new deduction for the disabled spouse is applicable to taxpayers whose disabled spouse does not have annual income, excluding exempt income, of more than 8,000 euros and does not generate the right to deductions for descendants or ascendants with disabilities. For the 2018 financial year, the application of up to 500 euros is only possible.

Deduction for investment in newly or recently created companies

One of the main novelties of the 2018 Income Tax campaign refers to this deduction. With effect from January 1, 2018, the maximum deduction base is increased from 50,000 to 60,000 euros and the deduction percentage is increased from 20% to 30%. In other words, if a taxpayer invests 10,000 euros, 3,000 euros can be deducted.

This deduction is exclusively for the state and, therefore, reduces only the full state quota, which will be independent of other similar deductions from the Autonomous Communities. “The amounts paid for the subscription of shares or participations will not be part of the deduction base when, with respect to such amounts, the taxpayer practices a deduction established by the Autonomous Community in the exercise of its powers,” says the Tax Agency.

The aid is limited on the one hand by the size of the company. The amount of the figure of the entity’s own funds may not exceed 400,000 euros at the beginning of the tax period of the same in which the taxpayer acquires the shares or participations. And for the commitments of the taxpayer with the companies. The shares or participations in the entity must be acquired by the taxpayer at the time of the constitution of the company or through a capital increase carried out in the three years following said constitution and remain in its assets for a period of more than three years and less than twelve years. The taxpayer’s participation may not exceed, during any day of the calendar years of ownership of the participation, more than 40% of the capital stock of the entity or of its voting rights. Box 549

Deductions for donations and other contributions to unions and political parties

Taxpayers will be entitled to certain deductions in the full amount for deductions for donations to foundations, NGOs or cultural institutions included in the . In order to be entitled to this deduction, it is essential to be able to prove the effectiveness of the donation made by means of a certificate issued by the donating entity. Taxpayers will be able to 75% up to 150 euros of the donation and later 35%. In addition, if in the two immediately preceding tax periods donations, donations or contributions with the right to deduction had been made in favor of the same entity for an amount equal to or greater than, in each of them, that of the previous year, the applicable deduction percentage to the base of the deduction in favor of that same entity that exceeds 150 euros will be 35%.

Membership fees and contributions to Political Parties, Federations, Coalitions or Electoral Groups are entitled to a 20% deduction. For their part, the fees paid to trade unions and professional associations, when membership is mandatory, will be deductible as an expense for work performance up to a limit of 500 euros per year. Boxes 552 and 553.

Deduction for income obtained in Ceuta or Melilla

The deduction is increased from 50% to 60% as of January 1, 2018, both for taxpayers resident in Ceuta and Melilla for a period of not less than three years, and for those with habitual residence for a period of less than three years. years they would have obtained income in said territories.

Deduction for international double taxation

Those taxpayers who have foreign shares that entitle them to a dividend may apply this deduction to avoid double withholding in the country of origin of the shares and in Spain. Squares 263.