New regulations for 2023

Main tax changes introduced by Law 31/2022, of December 23, on the General State Budget for the year 2023

de Presupuestos Generales del Estado para el año 2023.(BOE, 24-diciembre-2022)

PERSONAL INCOME TAX (IRPF)

With effects from January 1, 2023 and indefinite validity, the following modifications are introduced in Law 35/2006, of November 28, of the Personal Income Tax (LIRPF):

• Reduction for obtaining work income

  article 20 of the LIRPF is modified by section One of article 59 of Law 31/2022, on General State Budgets for the year 2023 (LPGE for 2023), so,

  The amounts that will reduce the net income from work are increased, also increasing the amount below which this reduction will be applied.

  This reduction will apply to taxpayers with net income from work less than 19,747.50 euros as long as they do not have income, excluding exempt income, other than income from work, greater than 6,500 euros.

  The new amounts of the reduction are as follows:

  1. Taxpayers with net income from work equal to or less than 14,047.50 euros : 6,498 euros annually.

  2. Taxpayers with net income from work between between 14,047.50 and 19,747.50 euros : 6,498 euros less the result of multiplying by 1.14 the difference between work performance and 14,047.50 euros annually.

• Obligation to report

  section 3 of article 96 of the LIRPF is modified by section two of article 59 of the LPGE by 2023, so,

  The exclusive limit of the obligation to declare in the case of receiving the work income provided for in article 96.3 of the LIRPF (those that come from more than one payer with the exceptions indicated in said article; spousal alimony or non-exempt alimony annuities; in cases where the payer is not obliged to withhold or when the income is subject to a fixed withholding rate) is raised to 15,000 euros (previously the limit was 14,000 euros).

• Determination of the type of withholding

  the forty-seventh Additional Provision of the LIRPF is modified by section Three and Four of article 59 of the LPGE by 2023, so,

  To determine the type of withholding or payment on account of work income, two are distinguished:

  • To the income from work that is satisfied or paid during the month of January 2023 and to which the general withholding procedure applies (arts. . 80.1.1 and 82 of the RIRPF ) the regulations in force as of December 31, 2022 will apply.

  • To the income from work that is satisfied or paid as of February 1, 2023 , provided that it is not income corresponding to the month of January, the payer must calculate the withholding rate in accordance with the regulations in force as of January 1, 2023 , regularizing it if appropriate in the first returns from the work that satisfies or compost

• Reduction for entrepreneurs or professionals who determine their net income by the direct estimation method

  letter a) of number 1 of section 2 of article 32 of the LIRPF is modified by section One of article 60 of the LPGE by 2023, so,

  The amounts that will reduce the net returns from economic activities are increased when the requirements set forth in number 32.2.2 of the LIRPF are met, also increasing the amount below which will be applied this reduction.

  This reduction will apply to taxpayers with net income from economic activities less than 19,747.50 euros provided that they do not have income, excluding exempt income, other than from economic activities, greater than 6,500 euros .

  The new amounts of the reduction are as follows:

  1. Taxpayers with net income from economic activities equal to or less than 14,047.50 euros : 6,498 euros annually.

  2. Taxpayers with net income from economic activities between between 14,047.50 and 19,747.50 euros : 6,498 euros less the result of multiplying by 1.14 the difference between work performance and 14,047.50 euros annually.

• Reduction for entrepreneurs or professionals who determine their net income by the simplified direct estimation method

  A Fifty-sixth Additional Provision is added to the LIRPF by section two of article 60 of the LPGE by 2023, under which,

  The deduction percentage for all the deductible provisions and expenses that are difficult to justify for taxpayers who determine their net income by the simplified direct estimation method will be 7 percent during fiscal year 2023.

• Reduction to entrepreneurs determining their net performance by the objective estimation method

  A Fifty-fourth Additional Provision is added to the LIRPF by section One of article 61 of the LPGE by 2023, under which,

  Taxpayers who determine the net return of their economic activities by the objective estimation method may reduce the net return of modules obtained in 2023 by a 10 per 100 .

• Extension of the exclusionary limits of the objective estimation method

  thirty-second transitional provision of the LIRPF is modified by section two of article 61 of the LPGE by 2023, so,

  The quantitative limits that have been applied in previous years and that delimit the scope of application of the objective estimation method for the economic activities included in the scope of application of said method, with the exception of agricultural and livestock activities, are extended for the year 2023. and forestry, which have their own quantitative limit by volume of income.

  Therefore, the exclusive general magnitudes will be the following for the year 2023:

  • Volume of income in the immediately preceding year greater than 250,000 euros for all economic activities, except agricultural, livestock and forestry activities. All the operations shall be taken into account, irrespective of whether there is a duty to issue an invoice. The operations in which there is an obligation to issue an invoice when the recipient is a businessman, may not exceed 125,000 euros .

  • Volume of income for all agricultural, forestry and livestock activities greater than 250,000 euros .

  • Volume of purchases of goods and services in the immediately preceding year, excluding acquisitions of fixed assets, exceeding 250,000 euros .

  Additionally, by the sixth Transitional Provision of the LPGE for 2023, a new deadline is established to renounce or revoke the renunciation of the objective estimation regime from the following the date of publication from the General State Budget Law for 2023 until January 31, 2023.

  Resignations and revocations presented for the year 2023 during the month of December 2022, prior to the new deadline, will be deemed to have been presented during the business period.

• Reduction limits in the tax base of business contributions and contributions to social security systems

  section 1 of article 52 of the LIRPF is modified by section one of article 62 of the LPGE by 2023, so,

  The maximum contributions that the worker can make to the same social security instrument to which business contributions would have been made :

  Joint maximum limit

  As a joint maximum limit for contributions to social security systems, the lowest of the following amounts will be applied:

  1. 30% of the sum of net earnings from work and economic activities received individually during the fiscal year.

  2. 1,500 euros.

     This limit will be increased

     1. In 8,500 euros, provided that such increase comes from employer contributions, or from worker contributions to the same social security instrument (same pension plan, corporate social security plan, mutual social security , etc.) to which business contributions have been made , for an amount equal to or less than the amounts resulting from the following table based on the annual amount of the business contribution :

        Annual contribution amount	Maximum contribution of the worker
        Equal or less than 500 euros	The result of multiplying the business contribution by 2.5
        Between 500.01 and 1,500 euros	1,250 euros, plus the result of multiplying by 0.25 the difference between the business contribution and 500 euros
        More than 1,500 euros	The result of multiplying the business contribution by 1

        However, in any case the multiplier 1 will be applied when the worker obtains full income from work in the year exceeding 60,000 euros from the company that makes the contribution .

        The amounts contributed by the company that arise from a decision of the worker will be considered contributions by the worker.

     2. At 4,250, whenever such increase comes from :

        • Contributions to sectoral pension plans made by self-employed or self-employed workers who join said plans due to their activity.

        • Contributions to the simplified employment pension plans of self-employed or self-employed workers .

        • Own contributions that the individual entrepreneur or professional makes to employment pension plans, of which he is a promoter and, in addition, a participant, or to Social Security Mutual Funds of which he is a mutual member, as well as those made to corporate social security plans or collective dependency insurance of which, in turn, he is the policyholder and insured.

        In addition, the limit of 5,000 euros per year for premiums for collective dependency insurance paid by the company, which already existed previously, is maintained.

• Savings tax rate in Personal Income Tax

  article 66 of the LIRPF is modified by section One of article 63 of the LPGE for 2023 , so that,

  The scale that is applied to the part of the taxable savings base to determine the full state fee is modified.

  The new scale applicable to the taxable base of savings is the following:

  Liquidable base of savings - Up to euros	Total tax liability - Euros	Remainder tax base of savings - Up to euros	Applicable rate - Percentage
  0	0	6,000	9.5
  6,000.00	570	44,000	10.5
  50,000.00	5,190	150,000	11.5
  200,000.00	22,440	100,000	13.5
  300,000.00	35,940	From there on	14

  Likewise, the scale applicable to the taxable base of savings to determine the full regional quota is also modified in the same terms indicated.

  article 76 of the LIRPF is modified by section two of article 63 of the LPGE for 2023 , so that,

  The scale that is applied to the part of the taxable savings base to determine the full state fee is also modified in the case of those taxpayers who have their habitual residence abroad due to any of the circumstances indicated in articles 8.2 and 10.1 of the LIRPF .

  Thus, in this case, the scale applicable to the taxable base of savings will be the following:

  Liquidable base of savings - Up to euros	Total tax liability - Euros	Remainder tax base of savings - Up to euros	Applicable rate - Percentage
  0	0	6,000	19
  6,000.00	1,140	44,000	21
  50,000.00	10,380	150,000	23
  200,000.00	44,880	100,000	27
  300,000.00	71,880	From there on	28

• Scale applicable to workers posted to Spanish territory

  number 2 of letter e) of section 2 of article 93 of the LIRPF is modified by section three of article 63 of the LPGE by 2023.

  In the special tax regime provided for in article 93 LIRPF for workers posted to Spanish territory, the applicable rates are modified to determine the full quota that corresponds to the part of the liquidable part that corresponds a dividends, interest or other income obtained from the transfer to third parties of own capital and capital gains that become evident on the occasion of the transfer of assets to which the following scale will be applied :

  Liquidable base of savings - Up to euros	Total tax liability - Euros	Remainder tax base of savings - Up to euros	Applicable rate - Percentage
  0	0	6,000	19
  6,000.00	1,140	44,000	21
  50,000.00	10,380	150,000	23
  200,000.00	44,880	100,000	27
  300,000.00	71,880	From there on	28

• Deduction for maternity

  article 81 LIRPF is modified by article 64 of the LPGE for 2023.

  The requirements to be able to apply the maternity deduction are modified:

  Women with children under three years of age who are entitled to apply the minimum for descendants can reduce the differential quota by up to 1,200 euros per year for each child under three years of age until the child reaches three years of age always that meet any of the following requirements :

  • At the moment of the child's birth they receive contributory or assistance benefits from the unemployment protection system .

  • At the moment of the birth of the minor or at any subsequent time they are registered in the corresponding Social Security or mutual insurance scheme with a minimum period, in the latter case, of 30 days of contributions .

  The amount of this deduction may be increased by up to an additional 1,000 euros when the taxpayer who is entitled to it has paid custody expenses for a child under three years of age in authorized daycare centers or early childhood education centers during the tax period.

  Once any of the above requirements are met, the right to continue receiving this deduction is maintained until the child reaches three years of age .

  This deduction will be calculated proportionally to the number of months of the tax period after the moment in which the requirements are met, in which the woman is entitled to the minimum for descendants for that child under three years of age. , provided that during said months neither of the parents in relation to said descendant receives the child support supplement provided for in Law 19/2021, of December 20, by which establishes the minimum vital income, ^(*) unless they were receiving it prior to January 1, 2023.

  ^(*)New thirty-seventh transitional provision of the LIRPF introduced by article 73 of Royal Decree-Law 20/2022, of December 27.

  When you have the right to the deduction for having registered with Social Security or mutual insurance after the birth of the minor , The deduction corresponding to the month in which the 30-day contribution period expires will increase by 150 euros per year .

  The increase in the deduction for childcare expenses in authorized daycare centers or early childhood education centers will be calculated in proportion to the number of months in which the requirements are met simultaneously and will be limited to the total amount of the actual non-subsidized expense paid in said period in relation to that child.

  You may request advance payment of the amount of the maternity deduction (not the increase in it for expenses in daycare centers or authorized early childhood education centers).

• Withholding on income from intellectual property

  section 3 of article 101 of the LIRPF is modified by section one of article 65 of the LPGE by 2023.

  The withholding percentage on the income derived from the production of literary, artistic or scientific works (which, in general, is 15 percent) will be 7 percent when the volume of such full income corresponding to the immediately preceding financial year is less than 15,000 euros and represents more than 75 percent of the sum of the full income from economic activities and work obtained by the taxpayer in said exercise.

  These percentages will be reduced by 60 percent when the income obtained by the recipient is entitled to the deduction in the quota provided for in article 68.4 of the Personal Income Tax Law (deduction for income obtained in Ceuta and Melilla) and, for the 2023 financial year, also in the case of income obtained by taxpayers with habitual and effective residence on the Island of La Palma ( DA 57 LIRPF introduced by LPGE by 2023).

  section 9 of article 101 of the LIRPF is modified by section two of article 65 of the LPGE by 2023.

  The withholding percentage on the income from intellectual property, regardless of its classification, will be 15 percent.

  However, 7 percent will apply:

  • When the volume of such full income corresponding to the immediately preceding financial year is less than 15,000 euros and represents more than 75 percent of the sum of the full income from economic activities and of work obtained by the taxpayer in said year.

  • When it comes to income from professional activities established by regulation .

  • In the case of advances on account derived from the assignment of the exploitation of copyrights that will accrue over several years .

• Real estate income allocation

  A Fifty-fifth Additional Provision is added to the LIRPF by article 66 of the LPGE for 2023.

  The imputation percentage of 1.1 provided for in article 85 of the LIRPF will be applicable in the case of properties located in municipalities in which the cadastral values have been reviewed, modified or determined through a general collective valuation procedure, provided that they have come into force as of January 1, 2012 .

• Deduction for habitual and effective residence on the island of La Palma during the 2022 and 2023 tax periods

  A Fifty-seventh Additional Provision is added to the LIRPF by article 67 of the LPGE for 2023.

  For the tax periods 2022 and 2023 , the deduction provided for in number 1 of section 68 of the LIRPF (deduction for obtaining income in Ceuta and Melilla) will be applicable to taxpayers with habitual and effective residence on the island of La Palma .

• Special tax regime of the Balearic Islands

  The Seventieth Additional Provision of the LPGE for 2023 introduces the Special tax regime of the Balearic Islands with effect for tax periods beginning between January 1, 2023 and December 31, 2028 .

  This regime may be applicable to taxpayers of the Personal Income Tax who determine the net return of their economic activity through the method of direct estimation .

  This novelty is developed in the Corporate Tax section.