Deductions in the 2016 Income Tax Return

The Spanish Constitution regulates the obligation of all citizens to contribute to the support of public expenses based on their economic capacity. The contribution is made fundamentally through two taxes: the Tax on Personal Income Tax (IRPF) and Corporate Tax (IS). Today, we will talk about how to save on payments through deductions in the Income Tax Return.

Understanding the regulations of personal income tax is crucial. It is governed by Law 35/2006, of November 28, on Personal Income Tax and partial modification of the laws on Corporate Taxes, on Personal Income. Residents and Heritage.

In Article 1 of the law, personal income tax is defined as a personal and direct tax that taxes, based on the principles of equality, generality and progressivity, the income of natural persons, taking into account personal and family circumstances. This system is designed to be fair and equitable for all. .

One of the aspects that most concern taxpayers when the time to declare income approaches is the amount to pay each year. For this reason, it is necessary to be incredibly attentive to deductions in the income tax return. The main deductions are the following:

Deductions for contributions and contributions to social security systems

The following contributions and contributions to social security systems can be deducted from the Income Tax Return:

The Spanish Constitution regulates the obligation of all citizens to contribute to the support of public expenses based on their economic capacity. The contribution is made fundamentally through two taxes: the Tax on Personal Income Tax (IRPF) and Corporate Tax (IS). Today, we will talk about how to save on payments through deductions in the Income Tax Return.

Understanding the regulations of personal income tax is crucial. It is governed by Law 35/2006, of November 28, on Personal Income Tax and partial modification of the laws on Corporate Taxes, on Personal Income. Residents and Heritage.

In Article 1 of the law, personal income tax is defined as a personal and direct tax that taxes, based on the principles of equality, generality and progressivity, the income of natural persons, taking into account personal and family circumstances. This system is designed to be fair and equitable for all. .
The maximum limit for these deductions is 9,040 euros.

Home rental deduction

As of January 1, 2015, the deduction for renting the primary residence was eliminated. In this way, only taxpayers can deduct the rent for their habitual residence:

• • • That they have formalized a rental contract before January 1, 2015, and have paid amounts for the rent of their habitual residence.
    • That they would have been entitled to a deduction for renting their habitual residence about the amounts paid for the rental of said residence in a tax period accrued before January 1, 2015.

The maximum base of this maximum is 9,040 euros per year.

Deductions for large families

Since January 1, 2015, deductions for large families or dependents with disabilities came into force. These deductions are aimed at the following taxpayers:

• • • Those in a large family.
    • Those who have ascendants or descendants with a disability in their care.
    • Those who are ascendants of single-parent families with two children for whom they have the right to the entire minimum provided for in art. Fifty of the Personal Income Tax Laws are against the right to receive annuities for food.

Deductions for donating to an NGO

Donations to an NGO may also be subject to a personal income tax return deduction. The taxpayer may deduct 50% of the first 150 euros donated and 27% of the rest of the contributions. The deduction percentage can increase to 32.5% if the amount donated to an NGO has not decreased in the last three years and up to 37.5% if it is not a priority patronage activity.

Notwithstanding everything seen in the previous sections, it is necessary to analyze the deductions depending on each Autonomous Community since there are cases where it is possible to deduct expenses for children’s education, for example.