The beginning of a new year is usually marked by the time to evaluate if everything is in order and to anticipate the tax developments expected in 2024. Many questions arise about whether approximately taxes will have to be paid and if there will be changes in assumptions, procedures or deductions.
Everything indicates that we will have to tighten our belts in the face of the economic challenges that arise reduce expenses, try to save and, in some cases, assume greater tax obligations.
The tax developments that will affect both individuals, self-employed workers and companies are the following:
Increase in the exempt minimum
There are new developments in the exempt minimum, so those who must present the Income must consider that it increases from €14,000 to €15,000. In 2024, those who have earned more than €15,000 with two or more payers will be required to file personal income tax, and the second and subsequent payers exceed €1,5000 together.
Increase in payroll tax
The Intergenerational Equity Mechanism (MEI), applied since 2023 to finance pensions, will increase its rate to 0.7% in 2024, divided between company (0,58%) and worker (0,12%). This measure means that the worker will pay a little more per month, affecting both remuneration and prorated extra payments.
Declaration and taxation of digital assets
Starting this year, residents in Spain who own crypto assets abroad valued at more than 50,000 euros must declare them to the Treasury. This measure, included in the legislation to prevent and combat tax fraud, involves the annual presentation of form 721, having an impact on personal income tax and the Wealth and Large Fortunes Tax.
Reduction in tax incentives
The personal income tax deduction for renting homes for residential use will decrease from 60% to 50%. This implies that owners will only be able to deduct up to 50% of the difference between rental income and expenses. However, there are exceptions and bonuses in stressed areas and for certain demographic groups, such as young people between 18 and 35 years old, who will be able to enjoy a 70% reduction in these previously designated areas.
New tax for high wealth and tax on large fortunes in País Vasco
Starting this year, País Vasco will apply the Large Fortunes tax, with a maximum rate of 3.5% for assets exceeding 14.5 million euros. This measure seeks to balance the tax burden between different regions and wealth levels.
In addition, the Wealth Tax is reintroduced in Madrid and Andalucía, which affects fortunes exceeding two million euros. Therefore, residents in Madrid and Andalucía with assets over two million must pay the Wealth Tax starting in 2024. This change seeks to ensure that the collection of this tax benefits regional administrations.
Tax advantages in 2024
Despite these tax adjustments, there are other advantages for this year, such as incentives to improve energy efficiency and deductions for rehabilitation works. The 60% personal income tax deduction for works that improve energy efficiency in residential buildings has been extended until the end of 2024, promoting sustainability in the real estate sector.
In addition, there will be tax benefits for the purchase of electric cars, through deductions in personal income tax. If you purchase an electric car between 2023 and 2024, you can deduct 15% of the purchase value in personal income tax, with a limit of 20,000 euros. This measure includes the expenses and taxes associated with the purchase, although it excludes public subsidies or aid.
Inheritance Tax Exemption in four Autonomous Communities
There will be a benefit for heirs in the Balearic Islands, La Rioja, Aragón, and Valencia. In these regions, the Inheritance and Gift Tax will be significantly reduced or eliminated thanks to bonuses of 99% to 100%, facilitating the transfer of assets between generations.
Tax news for the self-employed
From now on, all self-employed people, regardless of their income, must file their Income Tax return. This change eliminates the previous threshold of €1,000 of income for the obligation to declare.
Adjustments will also be implemented in the module system for the self-employed, eliminating the extraordinary 10% reduction in personal income tax for those who pay taxes under this regime, which will translate into an average increase of €280 per year in their tax burden. However, certain reductions are maintained for specific activities such as agriculture, livestock and areas affected by natural disasters.
Tax news for companies
News in the Tax on non-reusable plastic
Starting in 2024, companies will need a certification issued by accredited entities to not pay taxes on recycled plastics. This change seeks to promote the use of sustainable materials and reduce the environmental impact of plastic.
Minimum tax of 15% for multinationals and large groups
There will be complementary taxation for large-volume companies. That is, multinationals and large groups with a turnover of more than 750 million euros must ensure a minimum taxation of 15%, including their subsidiaries in Spain and abroad.
Taxation of sales on online platforms
A mandatory report of sales operations will be necessary. Digital platforms must inform the Treasury about sales made by users, both professionals and individuals that exceed 30 annual transactions or €2,000 in sales. This measure seeks to improve tax control over electronic commerce.
Tax news in consumption
Regarding consumption, the reduced VAT on food and energy is extended as part of the government plan to confront inflation. It is confirmed that, at least until June, the VAT reduction on basic foodstuffs will be maintained, and an extension of the VAT reduction for electricity and natural gas is expected.
Many people wonder if it will be mandatory to do the Income online, something that especially scares older people. In principle this is the case for 2024, but a resolution of the Supreme Court of July 2023 reverses this claim, so there will be no obligation, but there will be the right to submit the Income Tax Return only by electronic means (art. 96.2 of the General Tax Law).
