Tax news for this year 2024

Throughout 2023, we have been learning about some new developments and tax measures that have either come into effect this year or will do so in 2024. However, the largest volume of variations was known last Wednesday, December 27, 2023, after the last Council of Ministers meeting.

The following is a breakdown of the main tax changes for 2024 (not exhaustive):

1) Increase in the minimum taxable income for Personal Income Tax 2024:

The first fiscal novelty that we have to comment is that for the 2024 tax year, the minimum to be taxed in the IRPF increases from 14,000 euros to 15,000 euros.

In short, those persons with an income of less than 15,000 euros are not obliged to file an income tax return, subject to compliance with the additional requirements existing in the regulations in force.

2) Payroll tax (MEI):

The payroll tax, officially called MEI (Mechanism for Intergenerational Equity), began to be applied in 2023 to finance the "pension piggy bank".

In its first year (2023), it taxed payroll at 0.6%, of which 0.5% was borne by the company and 0.1% by the employee.

In relation to 2024, the rate rises to 0.7%, so that the company assumes 0.58% and the employee 0.12%.

This tax is levied on the contribution base, i.e., the gross monthly remuneration including prorated bonus payments.

3) Cryptocurrencies abroad and model 721:

Taxpayers with ownership of cryptocurrencies abroad must file form 721, in relation to all cryptoassets they have on December 31,
of each year, and those they have had at any time during the year.
The reporting obligation begins when the value of cryptocurrencies exceeds
amount of 50,000 euros, being obliged both individuals and
legal entities resident in Spain.

4) The Large Fortunes Solidarity Tax (ITSGF) is extended:

The application of the Temporary Solidarity Tax on Large Fortunes is extended.

The application of the minimum exemption of 700,000 euros in the ITSGF is extended to taxpayers under real obligation, i.e. non-resident taxpayers.

5) Personal income tax deduction for rental housing:

In relation to personal income tax and specifically, on real estate capital gains, it should be noted that, in 2024, the reduction in personal income tax on net income on housing that constitutes the tenants' home will be reduced from 60% to 50%.

In summary, the owner of the property will be able to deduct in the rent up to 50% of the difference between the income and the expenses for the rent, with the limitations existing in the regulations in force.

It is important to note that the 50% deduction, previously mentioned, applies only to rental contracts signed as of January 1, 2024, while contracts signed before December 31, 2023 maintain the 60% deduction.

6) Exemption from Inheritance and Gift Tax (ISD in some CCAA):

Taxpayers in the Balearic Islands, Aragon, La Rioja, Andalusia and Valencia will have to pay a minimum ISD.

These regional governments have approved bonuses ranging from 99% to 100%.

7) Self-employed and income from economic activities:

Individuals who are registered in the RETA (Special Regime for Self-Employed Workers) or in the Special Social Security Regime for Sea Workers, must file an income tax return regardless of their income.

Prior to 2024, the self-employed had to file a tax return if they had obtained net income from economic activities/real estate income in excess of 1,000 euros per year.

In short, it will be mandatory to file income tax returns as of 2024, for all self-employed individuals regardless of income.

8) Deduction for energy efficiency works:

The Government has extended to 2024 the deduction in personal income tax of 60% of the amounts invested forrefurbishment works that improve energy efficiency in residential buildings.

This deduction is available for works carried out between October 6, 2021 and December 31, 2024.