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Date Published: 03/04/2024

5 ways to save thousands on your 2024 Spanish personal Income Tax return

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The 2024 Income Tax campaign in Spain will run from April until July

5 ways to save thousands on your 2024 Spanish personal Income Tax return

The new fiscal year has arrived, and the Tax Agency is gearing up for the 2024 Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas or IRPF) Campaign. To avoid penalties and fines, Spanish taxpayers should be aware of several key changes, particularly regarding deadlines.

The good news is that this year's tax return period will be one of the longest, starting eight days earlier than usual on April 3 and ending on July 1 instead of the customary June 30.

However, taxpayers who wish to file their domicile declarations must submit them by June 26, which is the final day for such submissions.

Changes at national and regional level

The Ministry of Finance has introduced a package of fiscal measures aimed at promoting social justice and economic efficiency at the national level. As part of these reforms, employees earning between 15,000 and 21,000 euros per year will see a reduction in their taxable income. Moreover, taxpayers with annual incomes below 15,000 euros will no longer be required to declare their income, a change from previous years when the threshold was set at 14,000 euros.

It’s important to note that this measure only applies to salaried employees and not to self-employed workers. Another change this year is that all self-employed people, or autónomos, will have to submit a tax return, regardless of how much or how little they earned.

Additionally, various regions have implemented local changes to personal income tax. Madrid, for instance, has introduced a new deflation measure that is expected to save 153 million euros and impact 3.5 million residents, according to TaxDown. Other regions, including Aragón, the Basque Country and Navarra, have also announced plans to implement similar deflation measures in 2024.

5 Income tax deductions that could save you thousands

According to the Ministry of Finance, the following deductions could end up saving you as much as 4,277 euros if they apply to your circumstances.

Taxpayers can claim a deduction of up to 15% on the purchase price of a new electric car or motorcycle. Additionally, they can deduct 15% of the cost of installing an electric vehicle charging point on a property they own.
Parents can claim a deduction of 1,200 euros for each child under the age of three, regardless of whether they are employed or receiving unemployment benefits.
The maximum contribution to an individual pension plan remains at 1,500 euros, but there is now the option to increase this by a further 8,500 euros for contributions to company pension plans.
Individuals who work for companies abroad will not have to pay taxes on earnings up to 60,100 euros per year in the common territory, provided that the territory where the work is performed applies a tax similar to the level of Spanish personal income tax and is not a tax haven.
Donations to not for profit, non-governmental organisations (NGOs) can be deducted at rates ranging from 10% to 80%, depending on the amount donated. Membership fees for political parties qualify for a 20% deduction, up to a maximum base of 600 euros. Similarly, union and professional association dues can be deducted by up to 20%, with a cap of 500 euros per year.

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