Tax changes in Spain 2023

At the end of December last year, the Spanish government adopted the budget for 2023 and also introduced various tax changes. The fiscal and tax measures apply from the current budget year and therefore do not affect the 2022 tax return, which should be filed in May and June 2023. However, you should take the new regulations into account when planning your taxes from the beginning of this year.
 
One of the most important changes is the tax reduction for earned income and for self-employed persons who determine their income by direct estimation. In addition, the limit for the declaration requirement has been raised from 14,000 to 15,000 euros for those taxpayers whose earned income comes from more than one payer.
 
Another important change is the increase in the percentage of deductible expenses for provisions and hard-to-justify expenses from 5% to 7%. Similarly, the general reduction applicable to the net income of modules in the 2023 tax period has been increased to 10%.
 
Other changes in this law include technical improvements in the regulation of the cap on the reduction of the tax base for contributions to pension plans, the change in the tax rates for savings (increase to 28%) and the requirements for the maternity deduction, which under the new regulations is also available to mothers receiving unemployment benefits.
 
Various measures were also introduced for corporate income tax, which came into effect on 1 January 2023. These include a reduction in the tax rate for small companies by two percentage points from 25% to 23% for companies that had a turnover of less than €1,000,000 in the previous tax period. In addition, accelerated depreciation of new vehicles has been introduced for tax periods starting in 2023, 2024 and 2025.
 
In the Balearic Islands, a special tax regime will also be introduced, applicable to annual periods starting between 01 January 2023 and 31 December 2028. Based mainly on two points: reserve for investments in the Balearic Islands and special regime for industrial, agricultural and fishing companies in the Balearic archipelago.
Important note: the Government of the Balearic Islands has decided to increase the Real Estate Transfer Tax (ITP) from the 1st of January 2023, which taxes the transfer of second-hand properties and whose percentage will be set from this year between a minimum of 8% and a maximum of 13% depending on the value of the property. On the other hand, if the property to be acquired is to be used as a main residence and its value does not exceed 270,151.20 euros, a reduced tax rate of 4% can be applied.
It is important to note that this General State Budget Law for 2023 aims to improve competitiveness and employment and to promote investment and research in Spain. It is important to be aware of all these changes in order to take advantage of the possible tax benefits that you can obtain by reducing taxes and improving your financial and fiscal situation.

Source: Omnia Consulting