The Technicians of the Ministry of Finance (Gestha) propose ten tips with which taxpayers can save on average up to 2,893 euros in the next income statement, without forgetting that this year the incentive for individual pension plans has decreased and, in exchange , business pension plans are favored.
The greater tax advantages benefit taxpayers with higher salaries and assets, the technicians recall, so while people with incomes greater than 600,000 euros a year may lower their tax bill to 72,733 euros, for people with lower annual returns at 21,000 euros the tax benefits do not reach 1,390 euros.
1.- Main novelty, the maximum contribution to the pension plan is lowered to 2,000 euros
Usually, in the last months of the year, it is convenient to make contributions to pension plans or insured pension plans to achieve tax savings in the income statement for the next year.
However, Gestha argues that the Government is discouraging contributions to individual pension plans and betting on employment plans, in which the employer contributes. Thus, the maximum contribution to individual plans fell from 8,000 euros applicable until 2020 to 2,000 euros in 2021, which will reduce the impact on the quota by 580 million euros. Meanwhile, the General State Budget Bill for 2022 plans to reduce this limit to 1,500 euros.
In this way, the Treasury technicians recommend taking advantage of the final stretch of the year to reduce the taxable income of personal income tax until the limit is exhausted with an individual pension plan, provided that these contributions do not exceed 30% of income from work and economic activities.
Taking into account the news for the future, in case it is planned to make contributions to an individual plan in the CCAA of common regime, Gestha sees preferable contribute up to a maximum of 2,000 euros before December 31, anticipating the lowering of the limit to 1,500 euros.
In view of how the advantage of the Pension Plans has been reduced, the technicians explain that it is only necessary to invest in this month another 151 euros on average to reach the new limit of these contributions to achieve an average tax saving of 45 additional euros , depending on the amount of income and the autonomous community of residence.
Likewise, they point out that this advantage is traditionally used by half of the taxpayers who enter more than 60,000 euros, whose savings account for almost half of the contribution to the Pension Plan.
In addition, they add that, for equal amounts invested in pension plans, the tax advantage for the highest incomes has increased by increasing marginal rates by 2 points in 2021 for incomes of more than 300,000 euros, so that their tax savings are 150% higher than those of average incomes, and almost 250% higher than those of the most modest incomes.
In any case, to taxpayers who have retired or suffered some kind of disability in 2021, Gestha warns of the dangers of rescuing the Pension Plan in the form of capital, since currently the 40% reduction in this type is not maintained redemption, except in relation to contributions prior to December 31, 2006, so they recommend analyzing your taxation to see what suits you. If there is no reduction, the tax will always be lower, rescuing the plan in the form of income.
2.- Apply the deduction for home purchase and renovation
The technicians ensure that those who bought their main home or made a payment for its construction before January 1, 2013 will continue to enjoy the relief, as long as they have had deductions for said home in 2012 or previous years.
In this way, these taxpayers can be deducted up to 15% of the amounts invested, with an investment limit of 9,040 euros. Taking into account this ceiling, it may be interesting to make an additional payment – of 4,840 euros on average – to pay off the mortgage before the end of the year to reduce the tax bill by 726 euros.
In this framework, Gestha recalls the new regional deductions of 10% in habitual residence in rural areas at risk of depopulation in Asturias; 15% of the investment in habitual residence in projects of model villages in Galicia; 40% in facilities for self-consumption of electric energy or use of certain renewable energy sources in habitual residence or second private residence in the Valencian Community; 15 to 25% for habitual residence in rural areas, 15% for acquisition or rehabilitation of habitual residence in rural areas, or 500 euros for transfer of habitual residence to a municipality in sparsely populated areas in Castilla-La Mancha.
Finally, the deductions will be respected, with effect from October 1, 2021, in the autonomous full tax payment of personal income tax for the amounts paid in investment in the usual homes destroyed after the eruption of the La Palma volcano, including energy rehabilitation works or those of adaptation due to disability.
3.- Neutralize the taxation of profits from the sale of a habitual residence
For those who sold their house this year, the profits obtained will be taxed in the next Income statement, depending on their amount, between 19% and the new rate of 26% for savings income and earnings above 200,000 euros, which entered in force in 2021. However, the technicians point out that if the amount is totally or partially reinvested in another habitual home, it will be possible to neutralize this payment.
4.- Attention, over 65s
The profits obtained from the sale of the habitual residence by taxpayers over 65 years of age and also by severe dependents or large dependents are exempt. In the same way, Gestha clarifies that the gains obtained by those over 65 years from the sale of any property are exempt, up to a maximum limit of 240,000 euros, provided that with the total amount an insured life annuity is constituted within a period of six months.
5.- Compensate losses with gains
Being an investor in the stock market can not only bring profits, but also losses. For this reason, Gestha warns that the end of the year is a good time to do the math and offset the losses generated in an investment fund, shares or financial derivatives with the capital gains obtained. Here it is important to remember that those same or similar securities cannot be acquired in the two months before or after the sale. Also, positive returns on movable capital (interest on securities, sale of bonds or bonds, dividends, etc.) can be offset by negative returns.
On the other hand, it is possible to offset negative or positive returns on movable capital with capital gains and losses with the limit of 25% of the positive balance; that is, the balance of capital losses, once the gains have been offset, is allowed with positive returns on movable capital and vice versa. Therefore, if there were a positive return on movable capital, it would be advisable, except in the Basque Country, materialize losses for the sale of shares and other equity products. And if there were capital gains, offset them with negative returns on movable capital.
6.- Plan the sale of shares
Taxpayers who foresee that their net income from work will be less than 16,825 euros should monitor, as far as possible, that there is no income of any other type, such as capital gains from the sale of shares or income from real estate rentals, higher to 6,500 euros, since in that case they would lose a reduction in income from work that can reach up to 5,565 euros.
Also the sales of shares can force many taxpayers to declare that they would not have the obligation to declare that they have only work income of less than 14,000 euros with several payers, or up to 22,000 euros with a single payor or if the other payers do not reach 1,500 euros in total.
7.- Exempt up to 60,100 euros if working abroad
The technicians recall that the returns that have been obtained for the work carried out for companies based abroad are exempt from taxation with a maximum limit of 60,100 euros per year in the common territory.
Of course, the technicians clarify that this deduction may be applied as long as in the territory in which the work is carried out a tax of an identical or analogous nature to that of personal income tax is applied and it is not a country or territory qualified by regulation as tax haven. In addition, this exemption is only intended for temporary displacements, since if the taxpayer is a resident of another country, they would no longer be taxed in Spain.
8-. Award aid to La Palma …
Gestha recalls that the Government of the Canary Islands approved a 100% discount on cash donations to those who have lost their homes due to the lava from the volcano to buy or start the construction of another property on the island of La Palma.
Within this framework, it maintains that personal injury aid is exempt from personal income tax, which is why it does not include the aid provided for damage or destruction of the habitual residence or common elements of a community of owners.
However, to prevent affected citizens from having a capital gain in the general tax base of public aid, which they could not compensate with the capital loss in the tax base of the savings for their destroyed home, the Treasury technicians point out that the 2022 General State Budget Bill provides that public aid to repair the destruction caused by the volcanic eruption is not included in the income tax base.
Beyond La Palma, in this final stretch of the year Gestha recommends requesting the certificate with the identification data, date and amount donated to solidarity entities, to take advantage of the increase in the deduction for donations, approved by the Government in 2020, up to 80% of the first 150 euros donated and 35% of the rest donated, which increased to 40% if the amount donated to the same NGO does not decrease in each of the last three years, with the limit being 10% of the taxable base .
9.- … and ideology
Likewise, membership fees and contributions to political parties can bring the taxpayer some additional benefit, since they involve a deduction of 20%, limited to a maximum base of 600 euros.
In parallel, union and professional association fees are deducted from work income -although the latter with a limit of 500 euros-, as well as the costs of legal defense of disputes in the employment relationship with a limit of 300 euros per year.
10.- Incentives for the ‘angels’ of entrepreneurs
The deduction for third-degree friends and relatives of the entrepreneurs is 30% of the investment in the state income tax quota when subscribing the shares or participations of the company, with the maximum deduction base being 60,000 euros per year, limited to a participation, together with their spouse and relatives up to the second degree included, never exceeding 40% of the capital of the entity and whose own funds may not exceed 400,000 euros at the beginning of the entity’s period in which the investor acquires the shares. Likewise, the total exemption of capital gains is set when leaving the company, as long as it is reinvested in another newly or recently created entity.
Currently, the technicians note that this deduction is the most powerful of personal income tax, allowing an additional 1,274 euros to be deducted on average for those who finance a recent company, although it is necessary to invest another 4,246 euros.
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