Other IRPF queries

As a general rule, the personal income tax return is filed individually. However, people in a family unit may choose, if they so wish, to file jointly, provided that all its members are taxpayers for this tax.

For the purposes of personal income tax, there are two types of family unit:

1. In case of marriage:

   A family unit is made up of spouses who are not legally separated and, if applicable:

   1. children under legal age, except for those who live independently with their parents' consent.

   2. Children of legal age who are legally incapacitated and subject to extended or renewed parental authority.

   Remember: the age of majority is reached upon reaching the age of 18.

2. In the absence of marriage or in cases of legal separation:

   A family unit is made up of the father or mother and all the children who live with one or the other and meet the requirements indicated for the previous modality.

The following conclusions can be drawn from the legal regulation of the modalities of family unity:

• Any family group other than those mentioned above does not constitute a family unit for personal income tax purposes.

• No one may be part of two family units at the same time.

• The determination of the members of the family unit will be made based on the situation existing on December 31 of each year. Therefore, if a child turns 18 during the year, he or she will no longer be part of the household for that tax period. Any member who dies during the tax period will also not be part of the family unit.

In de facto couples only one of its members (father or mother) can form a family unit with the children who meet the requirements mentioned above and, consequently, opt for joint taxation. The other member of the couple must declare individually. The same criteria applies in cases of separation or divorce with shared custody.

Once the option to pay taxes individually or jointly has been exercised, it is only possible to modify it by submitting new returns within the voluntary period for filing returns. Once this period has ended, the tax option for that tax period cannot be changed. Joint taxation applies to all members of the family unit; If any member of the family unit files an individual return, the remaining members must use the same tax regime.

Personal minimum
In any of the family unit modalities, the taxpayer's minimum will be 5,550 euros per year, regardless of the number of members in it.
The calculation of the increase due to age or disability of the taxpayer will be carried out according to the circumstances of each of the spouses.

Reductions for joint taxation:

1. In joint declarations of family units made up of both spouses , not legally separated, and their children , if any, a reduction of the tax base of 3,400 euros per year will be applied.

2. In joint declarations of family units consisting of the father or mother and all the children who live with one or the other a reduction of the tax base of 2,150 euros per year will be applied. This reduction will not apply when the taxpayer lives with the father or mother of any of the children who are part of his or her family unit.

IMPORTANT: If joint taxation is chosen, all income of the members of the family unit must be included in the declaration, regardless of whether or not they are individually required to file a declaration.
The amounts and quantitative limits established for the purposes of individual taxation shall be applied in identical amounts in joint taxation, without having to be increased or multiplied based on the number of members of the family unit; However, the maximum reduction limits for contributions to social security systems and protected assets of people with disabilities will be applied individually by each participant or mutual member integrated into the family unit.

Taxpayers of the Personal Income Tax can choose in their declaration to allocate a percentage of their total amount to collaborate with the economic support of the Catholic Church and/or other purposes of social interest. That is, they can choose both options together or neither. In any case, whatever your decision regarding tax allocation, the final amount of tax you pay or the refund to which you are entitled will not be modified.

Regulations:

• Tax allocation to the Catholic Church

  The Eighteenth Additional Provision of Law 42/2006, of December 28, on the General State Budget for the year 2007, in accordance with the provisions of Article II of the Agreement with the Holy See, has established indefinitely and with effect from January 1, 2007, that the State will allocate 0.7% of the total amount of personal income tax corresponding to taxpayers who express their will in this regard to the support of the Catholic Church.

• Allocation of amounts for social interest purposes

  In accordance with the provisions of the Fiftieth Additional Provision of Law 48/2015, of October 29, on the General State Budget for 2016 (Official State Gazette of the 30th), for this year the State will allocate 0.7% of the full amount of personal income tax corresponding to taxpayers who expressly state their will in this regard to subsidize activities of social interest.

  According to article 2 of Royal Decree-Law 7/2013, of June 28, on urgent measures of a tax, budgetary nature and for the promotion of research, development and innovation (BOE of the 29th), the following are axes of activities of general interest considered to be of social interest, and as such will be taken into account in determining the regulatory bases for aid financed with the fixed percentage of the Personal Income Tax yield for other purposes of general interest considered to be of social interest:

  1. Care for people with comprehensive social and health care needs.

  2. Attention to people with educational or job placement needs.

  3. Promoting citizen security and preventing crime.

  4. The environmental protection.

  5. Development cooperation.

  Within the framework of the axes set out in the previous section, and in execution of the provisions of article II of the Agreement between the Spanish State and the Holy See on economic matters, dated 3 January 1979, the amounts to be distributed in 2014 and subsequent years, obtained from the allocation of the percentage of the income from the Personal Income Tax for other purposes of social interest will be allocated to activities of general interest which, among those included in article 4 of Law 6/1996, of 15 January, on Volunteering, may be declared by regulation as being of social interest. This percentage will be set annually in the General State Budget Law.

  For 2017, the One Hundred and Third Additional Provision of Law 3/2017, of June 29, on the General State Budget for the year 2017, establishes that the total amount assigned in the budgets for activities of general interest considered to be of social interest will be distributed by applying the following percentages: 77.22% to the Ministry of Health, Social Services and Equality, 19.43% to the Ministry of Foreign Affairs and Cooperation and 2.85% to the Ministry of Agriculture and Fisheries, Food and the Environment.

Options for the taxpayer:

• Check both boxes: Catholic Church and social purposes. In this case, 0.7% will be allocated to each of the options.

• Check one of the two boxes: social purposes or the Catholic Church.

• Do not select any option (0.7% of the total amount of personal income tax will be allocated to the General State Budget for general purposes).

For this campaign, the taxpayer will be automatically assigned the option that he/she exercised in his/her declaration for the previous year, without prejudice to any modifications he/she wishes to make; If no option is detected from the previous exercise or if you had selected no option, a message will appear asking you to exercise the option or confirm its absence.

If, after filing the personal income tax return, the taxpayer notices errors or omissions in the data declared, the channel for modifying the anomalies is different, depending on whether the errors or omissions have caused harm to the taxpayer or to the Treasury.

• Errors to the detriment of the taxpayer :

  If the taxpayer has improperly declared any exempt income, computed amounts in a higher amount than necessary or forgot to make any reduction or deduction to which he was entitled, as a new feature in Renta WEB 2016 a specific section has been incorporated to request the rectification of self-assessments, although he may continue to request in writing to the Delegation or Administration of the Tax Agency corresponding to his tax domicile the rectification of his self-assessment , provided that the Administration has not made a provisional or definitive liquidation for that reason and that the period of four years has not elapsed (counting from the day following the end of the deadline for filing the declarations, or, if the declaration was filed outside that period, from the day following its filing).

• Errors to the detriment of the Public Treasury:

  Errors or omissions in declarations already submitted that have led to a lower payment than legally required or a higher refund than appropriate must be regularized by submitting a supplementary declaration to the one originally submitted through Renta WEB.

It may happen that, once the Income Tax return has been submitted, errors or omissions are noticed in the declared data:

• If they have involved a lower income or a higher refund, they must be regularized by submitting a supplementary declaration to the one originally submitted.
• If, on the other hand, they have resulted in a smaller refund or a larger income, a self-assessment correction must be submitted.

When accessing Renta WEB in the "Renta 2017 Portal", within the "MORE PROCEDURES" section, you will find the option "Modify your already submitted declaration", which allows you to make both complementary declarations and corrections to self-assessments; Also through Renta WEB you must select the option “Modification of a declaration already submitted.”

Supplementary tax return

Any errors or omissions that have resulted in a lower income or a higher refund must be corrected by submitting a supplementary declaration.

Delays in work performance

In the tax data that the Tax Agency makes available to taxpayers, work income is reported separately in the form of Arrears. These amounts must be attributed to the tax periods in which they were payable, and, where appropriate, the corresponding supplementary self-assessment must be made.

This supplementary self-assessment, which will not entail any penalty or late payment interest or any surcharge, must be submitted within the period between the date on which the arrears are perceived and the end of the immediately following period for personal income tax declarations.

Thus, if the arrears are received between January 1 and the start of the period for filing the 2017 personal income tax return (up to April 3, 2018 included) the supplementary self-assessment must be filed in that year before the end of the period for filing returns for the 2017 financial year (up to July 2, 2018) , unless they are arrears from the 2017 financial year, in which case they will be included in the return for that financial year.

If they are received after the start of the 2017 Income Tax return filing period (from April 4, 2018) , the supplementary self-assessment must be submitted within the period between the receipt of the arrears and the end of the 2018 tax return filing period.

Any situations or circumstances that arise which result in the loss of the right to a reduction or exemption already applied in a previous declaration must also be regularised by submitting supplementary declarations-settlements.

Rectification of self-assessment

If previously submitted returns have caused harm to the taxpayer, such as the omission of a deduction, the declaration of an exempt income, among others, the taxpayer may request the rectification of said return, marking X in box 127.

The modification of the submitted declaration will be completed, which will include, in addition to the data reflected in the original self-assessment, any newly included or modified data.

For this purpose, the result to be entered from previous self-assessments or administrative settlements corresponding to the 2017 fiscal year (box 631) or the result to be returned (box 632) will be indicated. The proof number of the self-assessment for which rectification is requested, as well as the account number in which the refund is to be received, must also be entered in box 636.

• Descendants under 25 years of age as of December 31, 2017 who live with the taxpayer, who have not had income exceeding 8,000 euros (not including exempt income) and who do not independently file an income tax return with income exceeding 1,800 euros.
• Descendants over 25 years of age as of December 31, 2017 with a disability level equal to or greater than 33%, who live with the taxpayer, who have not had income exceeding 8,000 euros (not including exempt income) and who do not independently file an income tax return with income exceeding 1,800 euros.

  As of January 1, 2015, economic dependency is considered cohabitation, unless annual maintenance payments are made to said children.

  As of January 1, 2017, those persons linked to the taxpayer by reason of guardianship and foster care, who have been granted custody and care by court order, are considered descendants.

For these purposes, the concept of income is constituted by the algebraic sum of net income (from work, movable and immovable capital, and economic activities), income imputations and capital gains and losses computed in the year, without applying the integration and compensation rules. Now, the income must be computed at its net amount , that is, once the expenses have been deducted (including the new deductible expense of €2,000 in article 19.2 f of the Personal Income Tax Law under the concept of "Other expenses") but without applying the corresponding reductions, except in the case of income from work, in which the reduction provided for in article 18 of the Personal Income Tax Law may be taken into account when applied prior to the deduction of expenses.

Therefore, to determine the amount of 8,000 euros, the net income should not be taken into consideration but rather the total or gross income received.

Example: A taxpayer's ascendant receives a pension of only 9,600 euros. Does this entitle him/her to apply the minimum for ascendants?

Answer: Yes , since by reducing the total work income by the amount of the deductible expenses provided for in article 19 of the Personal Income Tax Law, in particular those in section 2.f) "In the concept of other expenses other than the above, 2,000 euros per year", the net income will be a maximum of 7,600 euros.

The amounts returned arising from agreements entered into with financial institutions, from the interests previously paid by taxpayers as a result of the clauses limiting interest rates on loans entered into with them, should not be included in the tax base.

Indemnifying interest relating to these shall not be included in the gross tax base either.　

However, certain regularisation assumptions are established in cases where said interests have formed part of the deduction for investment in habitual residence or deductions established by the Autonomous Communities, or have been considered a deductible expense:　

1. When the taxpayer has applied at the time the deduction for investment in habitual residence or regional deductions for the amounts received , he will lose the right to his deduction. In this case, it should include the amounts deducted in the Personal Income Tax return for the year in which the ruling, arbitration decision or agreement was made with the entity, in the terms set forth in article 59 of the Personal Income Tax Regulations, but without including interest on arrears. 　

   For these purposes, if the judgment, award or agreement was issued in 2017, in the 2017 Income Tax Return (to be submitted in April, May, June 2018), box 540 is checked and these amounts are included in boxes 539 and 542, not being necessary to complete boxes 541 and 543, corresponding to late payment interest.　

   This treatment is the same as that normally used in cases of loss of the right to deduction for habitual residence, but without including late payment interest.　

   This adjustment will not apply to amounts that are directly allocated by the financial institution, following an agreement with the affected taxpayer, to reduce the principal of the loan. That is to say, if the financial entity, instead of refunding to the taxpayer the amounts paid, reduces the loan principal by the corresponding amount, the deductions made prior thereto corresponding to these amounts shall not have to be adjusted. Moreover, the reduction of the loan principal shall not entitle the taxpayer to a deduction for investment in a primary residence either.　

2. In the event that the taxpayer had included, in declarations from previous years, the amounts now received as deductible expenses, these will lose such consideration and must submit supplementary declarations for the corresponding years, removing said expenses, without penalty or late payment interest or surcharge.　

   The term for filing the supplementary tax returns shall be between the date of the ruling, arbitration decision or agreement and the end of the following self-assessment tax return filing period for this tax.　

Another issue regulated by the standard is the exercises that are affected by these regularizations , both of the state or regional housing deductions and of the deductible expenses. In this regard, it establishes that it will only be applicable to the years for which the Administration's entitlement to determine the tax payable had not prescribed.

The way in which the adjustment is made shall vary depending on whether the taxpayer has applied a deduction for investment in primary residence, deductions established by Autonomous Community authorities, or deductions in expenses, and the year in which the agreement, ruling or arbitration decision is made. Specifically, the following cases may arise:

1. The taxpayer had applied the deduction for investment in primary residence or deductions established by Autonomous Community authorities, for amounts received:　

   1. Judgment, award or agreement of the year 2017 : In this case, the adjustment of the deducted amounts will be carried out in the 2017 declaration (to be submitted in April, May and June 2018) and will generally affect the deductions for the years 2013, 2014, 2015 and 2016. 　

      If the amounts returned include interest from 2017, these will no longer be taken into account when applying the housing deduction for that year.　

   2. Agreement with the financial institution, judgment or award of the year 2018 : In this case, the adjustment of the deducted amounts will be carried out in the 2018 declaration (to be submitted in April, May and June 2019) and will generally affect the deductions for the years 2014, 2015, 2016 and 2017.

      However, if the ruling or agreement is prior to the end of the deadline for filing the 2017 personal income tax return (July 2, 2018), the interest for 2017 will not be taken into account when applying the deduction for housing and, therefore, the regularization will not affect that year.　

2. The taxpayer had included the amounts now perceived as deductible expenses in prior years:　

   1. The agreement with the financial institution, the judgment or the award, has been produced from on April 5, 2017 until April 3, 2018. In this case, you must submit supplementary declarations for the years 2013, 2014, 2015 and 2016, within the period for filing the personal income tax return for 2017 (April, May and June 2018). 　

      If the amounts returned include interest paid in the 2017 financial year, the taxpayer will no longer include these amounts as deductible expenses in their tax return.　

   2. The agreement with the financial institution, the judgment or the award has occurred after April 3, 2018. In this case, you must generally submit supplementary declarations for the years 2014, 2015, 2016 and 2017 within the 2018 Personal Income Tax filing period (April, May and June 2019). 　

      However, if the agreement or ruling is prior to the end of the deadline for filing the 2017 personal income tax return (July 2, 2018), the interest for the year 2017 will not be taken into account as a deductible expense and, therefore, you will not have to file a supplementary return for that year.　

Lastly, if the taxpayer had already adjusted these amounts based on a prior ruling, they may call for the self-assessed tax returns filed to be rectified, claiming the refunding of the interest on arrears paid and, if applicable, the modification of the indemnifying interest declared as a gain.　

The new (complementary) declaration will include all the data that must be declared, incorporating, together with those correctly reflected in the original declaration, those that have been newly included or modified.　

Once the differential rate resulting from the new settlement has been determined (Box 620), the amount entered in the original declaration will be subtracted from it, if it was positive (Box 626), or the refund received will be added, if it was a refund (Box 627); The result obtained is the amount that must be entered as a result of the supplementary declaration (Box 630).