Personal income tax will be filed in Spain between April and June of next year
There are still a few months before the personal income tax has to be filed in Spain for the year 2021, but financial experts have already offered some tips and tricks that could lead to substantial savings for taxpayers in the next statement. The annual payment will be due between April and June 2022, but there are still several ways to save a euro or two before the ball falls this year.
Pension plan contributions
In 2021, the maximum contribution that a taxpayer can deduct is 2,000 euros in total, provided that this amount does not exceed 30% of the overall economic income for the year.
Since the tax rate is 30%, the savings in this case would amount to 600 euros, and the more you earn, the more you save.
Until last year, the maximum allowable pension contribution was 8,000 euros and is expected to be further reduced in 2022 to just 1,500 euros. So now is the time to maximize the annual plan.
Invest in start-ups
The government allows a deduction of 30% of the amount invested in shares of newly created companies, up to a limit of 60,000 euros.
Compensate for losses with gains
If you invest in the stock market, mutual funds, or cryptocurrency, the Treasury allows you to offset losses against gains that have been amassed during the year.
It is therefore wise to sell at the end of the year and thus save on the tax rate of 19-26% applied on the net amount of capital gains realized during the year.
Liquidate part of the mortgage payment
For those who bought a house in Spain before January 1, 2013, up to 15% of what was paid on the mortgage in 2021 can be deducted, up to a maximum of 9,040 euros.
Those who have made lower mortgage payments during the year can take advantage of this tax advantage by amortizing part of the loan on a habitual residence.
Sell a habitual residence
In the case of having sold the main residence this year, it will be possible to avoid paying the capital gain tax (tax rate between 19-26%) if the amount obtained is reinvested in whole or in part, within two years, in another house which will be considered as a principal residence.
Donations made to associations allow a deduction of up to 80% on the first 150 euros. The remainder of the donation can be deducted at 35%, unless donations of the same amount have been made within the last two years to the same organization, in which case the amount of the deduction will be increased to 40%.