What are the key points to file the income tax return?

Every year, filing income taxes becomes a crucial process for many taxpayers. With frequent changes in tax legislation and updates to procedures, it is essential to stay up to date with the latest developments to correctly comply with our tax obligations.

It is important to be aware of the key points to correctly complete the income tax return, whether done individually or through a consultancy such as Puigverd Assessors, since ignorance of the law does not exempt you from compliance.

Know what the key dates are

The first step to a successful tax return is knowing the deadlines.

07-01-2024 Last day to submit your 2023 Income and Asset returns.

06-26-2024 Last day to submit your 2023 Income and Asset returns if the result is to be deposited and you want to domiciliate the income.

Main tax news of the last year

• The exclusive limit of the obligation to declare for taxpayers who receive full income from work is raised from 14,000 to 15,000 euros in the following cases: ……When they come from more than one payer, except for the exceptions indicated in the aforementioned article 96.3 of the law. of personal income tax…
• Allowances and allowances for travel expenses: Letters b) of article 9.A.2 and a) of article 9.B.1 of the Personal Income Tax Regulation (Order HFP/792/2023) are modified to increase, from July 17 of 2023, from 0.19 euros to 0.26 euros per kilometer traveled the amount excepted from the tax intended by the company to compensate for the transportation expenses of the employee or worker who travels outside the factory, workshop, office, or work center. work, to carry out their work in a different place as long as the reality of the displacement is justified.

• With effect from January 1, 2023 , the obligation to declare is established for all those individuals who at any time during the tax period have been registered, as self-employed workers, in the Special Regime for Self-Employed or Self-Employed Workers, or in the Special Social Security Regime for Seafarers (collaborating family members are affected by this obligation).
• The reduction of expenses that are difficult to justify is raised to 7% (previously 5%) and with a maximum of 2,000 euros.
• General reductions for the exercise of certain economic activities, additional reduction applicable to economically dependent self-employed workers (TRADE), both the maximum amount of the same is raised from 3,700 euros per year to 6,498 euros per year, as well as the threshold of net income from the activities economic activities, which goes from 14,450 euros to 19,747.5 euros, as long as they do not have income, excluding exempt income, other than those from economic activities exceeding 6,500 euros
• Self-employed workers who determine their net income using the objective estimation method may apply a general reduction of 10%, instead of the previous 5%.
• In addition, self-employed workers who work from home will have a 30% deduction for supply costs that are related to work activity.

• The beneficiaries of the maternity deduction are expanded in 2023. Until 2022, only working mothers could benefit from the deduction of 1,200 euros per year for each child under three years of age. Now, even if at the time of birth the mother was not working but collecting unemployment, or even if she later contributed for 30 days or more, she will be able to benefit from this deduction and request an advance payment of 100 euros per month. This extension between 2020 and 2023 of the beneficiary mothers also amounts to an additional 1,000 euros for custody expenses for a child under three years of age in daycare centers or early childhood education centers.
• In the case of employed workers, the possibility of increasing the individual limit in pension plans of 1,500 euros by an additional 8,500 for company contributions or contributions from the same worker with an amount equal to or less than the company contribution according to operation with coefficients. In any case, the sum of the different contributions may not exceed the amount of 10,000 euros.
• In the case of self-employed workers, the possibility of increasing the individual limit of 1,500 euros by an additional 4,250 euros for contributions to simplified pension plans for self-employed workers and sectoral plans. In any case, the sum of the different contributions may not exceed the amount of 5,750 euros.
• Deductions for energy efficiency improvement works in homes are maintained. Deduction of 20% on a maximum of 5,000 euros for works that reduce the demand for heating and cooling by a minimum of 7%. The deduction is extended to 40% of a maximum of 7,500 euros for works that reduce energy consumption by a minimum of 30% or allow the energy rating to be improved to “A” or “B”. And, finally, there will be a 60% deduction for energy rehabilitation works on buildings, with a maximum of 5,000 euros per home and 15,000 euros in total. These deductions will also be in force in 2024.
• New deduction of 15% of the price of electric cars purchased last year on a maximum base of 20,000 euros and another of 15% of the cost of installing a charging point, on a maximum base of 4,000 euros.
• The deduction for donations (for example, to NGOs) is increased and 80% of the first 250 euros is deducted, and 45% of the rest.
• The deduction for investment in newly created companies is increased to 50%. The maximum deduction base of 60,000 to 100,000 euros.
• An exemption is incorporated for work income derived from the delivery of shares or participations in emerging companies to their workers, with a maximum limit of 50,000 euros.  

• The tax scale of the savings taxable base is modified to introduce, both at the state and regional levels, a new section starting at 300,000 euros with an applicable tax rate of 14% and raising the rate applicable in the previous section of 200,000 to 300,000 from 13% to 13.5%.

Transitional provision 2 Personal Income Tax Law: Mutuals

The second transitional provision (DT 2nd) of the LIRPF offers the possibility of reducing the amount to be included as work income in the income tax return for each non-prescribed year (2019 to 2023) when retirement or disability pensions are received by those mutualists whose contributions could not at the time be subject to reduction or reduction in the tax base. In this way, double taxation for these contributions is avoided. DT 2 is applied in accordance with the provisions of the various rulings of the Supreme Court, the latest dated February 28, 2023 and January 10, 2024.

A fee will be refunded if, after the application of DT 2, the tax fee is less than the amounts previously paid for the presentation of a previous declaration or for the withholdings borne.

For Income 2023, if the AEAT has all the information, the reduction will already appear in the tax data with the concept (“Adjustment for Mutualities - DT2 LIRPF”), and the adjustment will be automatically applied in the declaration.

Cryptocurrencies have burst into the financial world with force, and that is why the Tax Agency is once again focusing on them, which is why it plans to send almost a million notices to remind taxpayers of the need to declare bitcoin, ethereum or other digital assets.

One of the novelties of the 2023 income campaign is that the Treasury has introduced detailed information on the holdings and movements of cryptocurrencies abroad in taxpayers' tax data, coinciding with the growing importance and regulation of this type of currency. Added to this is the new obligation to report, through form 721, the possession of virtual currencies held abroad as of December 31 of last year for a value greater than 50,000 euros. The period to register the form opened on January 1 and ended on March 31.

• When a virtual currency is sold or exchanged for another, "it is taxed on the savings tax base – equity variation", so a tax rate ranging from 19 to 28% is applied.
• The remuneration obtained through investment in cryptocurrencies, which consists of having them immobilized for a period of time, either because we lend them (lending), contribute them to contribute to the operation of the network (staking) or because we provide liquidity to a protocol or to a pool (yield farming), "taxed on the tax base of savings – return on movable capital", so a tax rate ranging from 19 to 28% is applied.
• If the taxpayer has received airdrop - a term that refers to the free distribution of tokens to cryptocurrency owners in exchange for meeting certain requirements -, in this case the Treasury will interpret it as a gift and it will be included in the general tax base – capital variation awards - of the declaration, with which you will be taxed at a higher rate, "from 19 to almost 50%, depending on where you reside.
• Taxpayers who have had income in 2023 from mining cryptocurrencies using their own means of production and human resources in order to create this type of assets "will have to register as self-employed and these income from economic activities will be included in the tax base of the declaration, with which you will be taxed at a higher rate, "from 19 to almost 50%, depending on where you reside.

Filing your income tax return is not only an annual process, but also an opportunity to plan for future finances. Using information obtained during the process to evaluate a financial situation and make adjustments to tax planning is helpful for the next year. Considering the possibility of investing in financial products that offer tax benefits or adjusting a tax withholding is an option to optimize net income.

Filing your income tax return may seem like a daunting task, but with the right information and careful planning, you can meet your tax obligations efficiently and maximize your benefits. Staying up to date with tax news, organizing documents and using available resources, such as software or tax advisory services, helps make the process easier. With these tips, you can file your income tax return with confidence and peace of mind.