The General Budgets of 2023, made by Governmentinclude important fiscal measures aimed at alleviating the tax burden of low and middle incomes. Among them, and effective as of January 1, are personal income tax (IRPF) reductions. It should be remembered that this is a progressive tax which is levied on the income of all residents of Spain.
What does it mean that this tax is progressive? The higher the income, i.e. the more money earned, the higher the percentage that corresponds to paying to the Treasury, therefore the withholding taxes will be higher. In this way, if less than the amount paid has been withheld during the year, the Income Statement will be paid. If, on the contrary, the withholding taxes have been higher, he will leave to return.
This is why it is one of the most important taxes for workers, who can check how much they keep in their paychecks each month. Here is the first novelty introduced by the Spanish government: if earlier the income tax of 14,000 euros a year was introduced, it has now been extended to 15,000 euros.
This means workers who earn less than 15,000 euros a year They will not be required to present the Income Statement. In the case of employees with two children, the minimum rate ranges from 18,000 to 19,000 euros.
Expansion of the reduction of personal income tax withholdings
Similarly, the General State Budget for 2023 provides for a extension of the reduction of personal income tax withholdings. Therefore, more taxpayers will be able to benefit from this deduction, as they will be able to benefit from it income up to 21,000 euros. Until now, only people with an income of between 15,000 and 18,000 euros could do it.
As explained by the government, it is equivalent to the average salary in Spain, so half of the salaried workers will be able to benefit from this tax measure. Because of this tax cut, a large portion of workers will notice a improvement of your monthly salary, as Treasury withholding taxes will be lower. According to calculations by the Executive, in some cases it can amount to more than 1,000 euros a year.
What happens with incomes between 22,000 and 35,200 euros
As a result of the above adjustments, the Treasury will also a revision of the withholding tax table for 2023 rentals. In this way, workers who earn less than 35,200 euros will have to pay less personal income tax: the withholding tax will have as its maximum limit the result of applying the percentage of 43% to the positive difference between the total compensation amount and that which corresponds according to the your situation,” as it appears in the blotting paper of the taxman.
With this adjustment, it is meant that salaries of less than €35,200 do not have to be paid the same as higher salaries. However, some economic experts warn that since there is no change in tranches, these taxpayers will have to pay more in 2024 for having enjoyed lower withholding taxes than those paid to him during the previous year. This is because the previous limit is applied in the withholding tax calculation, but not in the tax, so it will have to be adjusted in the following year.
