Regulatory developments 2021

Main tax changes introduced by Law 11/2020, on the General State Budget for 2021 (Official State Gazette of 31 December)

de Presupuestos Generales del Estado para el año 2021(BOE, 31-diciembre-2020)

PERSONAL INCOME TAX (IRPF)

General scale of personal income tax

With effect from 1 January 2021, the scale applied to the part of the general taxable base to determine the full state rate is modified, adding a new bracket to the part of the taxable base that exceeds 300,000 euros to which a rate of 24.50% will be applied.

The new general scale applicable is as follows:

(Article 63.1 of the LIRPF is modified by article 58 of the LPGE for 2021).

Savings tax rates in personal income tax

With effect from 1 January 2021, the scale applied to the part of the savings taxable base to determine the full state rate is modified, adding a new bracket to the part of the savings taxable base that exceeds 200,000 euros to which a rate of 13.00% will be applied.

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

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

The scale applicable in this case will be the same one reproduced above.

The scale applied to the savings portion of the taxable base to determine the full state rate is 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. In this case, a new section is added to the part of the taxable base of savings that exceeds 200,000 euros to which a rate of 26.00% will be applied.

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

(Articles 66 and 76 of the LIRPF are modified by article 59 of the LPGE for 2021).

Scale of withholdings and payments on account applicable to recipients of employment income

With effect from 1 January 2021, the scale applicable to determine the withholding percentage to be applied to income from work derived from employment or statutory relationships and pensions and passive assets has been modified. A new section is added to the base part to calculate the withholding rate that exceeds 300,000 euros to which a withholding rate of 47.00% will be applied.

Thus, the scale to apply to determine the type of retention will be as follows:

(Article 101.1 of the LIRPF is modified by article 60 of the LPGE for 2021).

Scales applicable to workers posted to Spanish territory

In the special tax regime provided for in article 93 LIRPF for workers posted to Spanish territory, with effect from January 1, 2021, the applicable rates for determining the full rate are modified. There are two cases:

First, the following scale is applied to the taxable base, except for the part thereof corresponding to dividends, interest or other income obtained from the transfer to third parties of own capital and capital gains that are revealed on the occasion of the transfer of assets:

(Previously, the percentage applicable to the taxable base from 600,000 euros was 45%).

Second, the following scale is applied to the portion of the taxable part that corresponds to dividends, interest or other income obtained from the transfer to third parties of own capital and capital gains that are revealed on the occasion of the transfer of assets:

(A new section is created for the taxable base starting at 200,000 euros, to which a rate of 26% will be applied).

Likewise, in this special regime -with effect from January 1, 2021- the percentage of withholding or payment on account of employment income is modified. Specifically, when the remuneration paid by the same payer of employment income during the calendar year exceeds 600,000 euros, the withholding rate applicable to the excess will be 47 percent (previously it was 45 percent).

(Article 93 of the LIRPF is modified by article 61 of the LPGE for 2021).

Limits on reduction in the tax base of contributions to social security systems

With effect from 1 January 2021, various limits relating to social security systems have been modified.

Private insurance that exclusively covers the risk of severe or high dependency:

The total reductions made by all persons who pay premiums in favour of the same taxpayer, including those of the taxpayer himself, may not exceed 2,000 euros per year (previously the limit was 8,000 euros per year).

Contributions to social security systems in which the taxpayer's spouse is a participant, member or holder:

Taxpayers whose spouse does not earn net income from work or economic activities, or whose income is less than 8,000 euros per year, may reduce the tax base for contributions made to social security systems in which said spouse is a participant, member or holder.

These contributions will have a maximum limit of euros year (previously the limit was 2,500 euros).

Joint maximum limit:

As a joint maximum limit for contributions to social security systems, the lowest of the following amounts shall apply:

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

2. 2,000 euros per year (previously the limit was 8,000 euros)

   From 1 January 2021, this limit will be increased by €8,000, provided that such increase comes from employer contributions.

   The individual entrepreneur's own contributions to employment pension plans or social welfare mutual funds, of which he is in turn the promoter and participant or mutual member, as well as those made to company social welfare plans or collective dependency insurance of which he is in turn the policyholder and insured, will be considered as company contributions, for the purposes of calculating this limit.

   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.

(Articles 51.5 and 7 and 52 of the LIRPF are modified by article 62 of the LPGE for 2021).

Extension of the exclusionary limits of the objective estimation method

The quantitative limits that have been applied in previous years and that delimit the scope of application of the objective estimation method for economic activities included in the scope of application of said method are extended for the 2021 financial year, with the exception of agricultural, livestock and forestry activities, which have their own quantitative limit based on income volume.

Therefore, the general exclusion magnitudes for the year 2021 will be the following: 

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

• Turnover for the set of agricultural, forestry and livestock activities exceeding 250,000 euros.

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

(DT 32 of the LIRPF is modified by article 63 of the LPGE for 2021).