Cuts income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. and withholding six months ahead of schedule

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1. The second phase of the personal income tax (IRPF) cut is moved forward to 2015: a new general and savings tax scale is approved, with marginal rates cut by half a point in each bracket, effective January 1, 2015.
2. A new withholding scale applies to paychecks from July 12, 2015, later adjusted to account for amounts withheld since January, so the cut covers the whole year. Self-employed workers' withholding drops to a general 15% rate, and to 7% during the first three years of activity. Savings income withholding falls to 19.5%.
3. Public aid for people at risk of social exclusion, social emergencies, housing, food or schooling needs, up to 1.5 times the annual IPREMIPREM A public income indicator used in Spain as a reference amount to set aid and thresholds., is exempt from IRPF. So is aid for victims of violent crimes and gender violencegender violence Violence a woman suffers from a current or former partner because she is a woman., and aid for the digital dividend switchover.
4. In the Corporate Income Tax and the Non-Resident Income Tax, the withholding rate drops from 20% to 19.5% from July 12, 2015, in line with the IRPF cut.
5. Public aid for people without resources, and aid for victims of violent crimes or gender violence, becomes exempt from seizure, using the same rules that protect wages under the Civil Procedure Law.
6. Capacity payment prices on electricity bills are cut from August 2015, small self-consumers (up to 10 kW) may be exempted from some grid tolls and charges, social aid for coal miners is brought forward and made more flexible, and payments to the European Union for late-payment interest of 3,172,388.46 euros are regularized in the Budget.

Who it affects

• Employees: They pay less IRPF from 2015 and see lower withholding in their paychecks from July 12, 2015.
• Self-employed workers: Their withholding drops to a general 15% rate, and to 7% during the first three years of activity.
• Companies and non-residents with income in Spain: Their withholding drops from 20% to 19.5% from July 12, 2015.
• Recipients of social aid and victims of violent crimes or gender violence: Their aid is exempt from IRPF and cannot be seized.
• Electricity consumers: They pay less in capacity payments on their electricity bills, and small self-consumers are exempted from some tolls and charges.

Words worth knowing

Retención (withholding)

Money the payer (for example, your employer) deducts from your paycheck and pays to the tax agency in advance against your IRPF.

Escala del IRPF (IRPF tax scale)

A table that splits income into brackets and sets the percentage paid for each bracket.

IPREM

A public income indicator used in Spain as a reference amount to set aid and thresholds.

Pagos por capacidad (capacity payments)

Part of the electricity bill consumers pay to fund available power capacity in the system.

Autoconsumo (self-consumption)

Producing your own electricity (for example, with solar panels) and using it in your home or business.

gender violence

Violence a woman suffers from a current or former partner because she is a woman.

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