Extension of 2011 budget and measures to cut the public deficit

Automatic summary, not yet reviewed

1. Since the 2012 budget was not passed, the 2011 budget is extended from January 1, 2012, adapting the classification of budget credits to the administrative structure in force on that date.
2. Public sector employee and senior official pay is frozen for 2012, public sector hiring is frozen with exceptions (education, health, security, anti-fraud work), and the ordinary workweek averages at least 37 hours and 30 minutes.
3. Contributive pensions and State civil service pensions rise 1% in 2012, ending the 2011 freeze. Minimum, non-contributive and SOVI pensions rise 1% on amounts already updated by 2.9%, and those who received minimum top-ups in 2011 will get a one-off compensatory payment before April 1, 2012.
4. The corporate tax installment payment percentage is set at 18% for 2012, and municipalities may temporarily and exceptionally raise the urban property tax rate in 2012 and 2013 depending on the age of their valuation report (10%, 6% or 4%), with exclusions for lower-value homes and municipalities with valuations from 2005 to 2007.
5. The fee for reserved radio spectrum is regulated with a formula and detailed coefficients per service, and the general operators' fee is set at one per thousand of gross operating income.
6. Maximum Social Security contribution bases rise 1% from 2011, with special rules for self-employed workers depending on their age, and contribution rates for passive rights and the MUFACE, ISFAS and MUGEJU mutual funds are set for 2012.
7. A supplementary tax on personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF) is created for 2012 and 2013, with rates from 0.75% to 7% on the general taxable base and 2% to 6% on the savings base, and withholding in the corporate tax and non-resident income tax rises from 19% to 21%.
8. The equitable compensation for private copying is abolished and replaced by a payment from the State budget, and the youth basic emancipation allowance is repealed, although those who already had the right recognized keep receiving it.

Who it affects

• Public employees and senior officials: Their pay is frozen in 2012 and the ordinary workweek rises to an average of 37 hours and 30 minutes.
• Retirees and pensioners: Their pensions rise 1% in 2012, with compensatory payments for those receiving minimum top-ups.
• Self-employed workers: The Social Security contribution bases they may choose are set depending on their age.
• Income tax payers and companies: They pay a supplementary tax on personal income tax in 2012 and 2013 and face 21% withholding in corporate and non-resident taxes.
• Young renters: The youth basic emancipation allowance is repealed, though those already granted it keep receiving it.

Words worth knowing

Pago fraccionado

Advance payments that companies make on corporate income tax during the year, before the final return.

Ponencia de valores

A study setting the cadastral value of properties in a municipality, used to calculate the property tax.

Compensación equitativa por copia privada

The amount paid for private copies of works (the so-called digital levy), now replaced by a payment from the State.

Renta básica de emancipación

A state payment given to young people to help pay rent on their home.

Clases Pasivas

The pension scheme for older civil servants, before the Social Security system.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries