Delimitation

Regulations: Additional Provision Twentieth of the Personal Income Tax Law

Income exempt with progression is considered to income that, without being subject to taxation, must taken into account for the purposes of calculating the tax rate applicable to the remaining income of the tax period.

Examples of these types of income include those provided for in the Conventions to avoid double taxation signed by Spain.

Exempt income with progression will be added to the general or savings taxable base depending on the nature of the income, in order to calculate average rate corresponds to determining the full state and regional tax rate.

The average tax rate thus calculated will be applied to the general or savings taxable base, not including exempt income with progression.

In certain Conventions to avoid double taxation signed by Spain, it is established that, when the income obtained by a taxpayer is exempt, in accordance with the provisions of the Convention itself, the same must be taken into account for the purposes of calculating the applicable tax rate on the rest of the income obtained by said taxpayer in the year.