Spain's 2018 state budget: spending, taxes, pensions and jobs

Automatic summary, not yet reviewed

1. The 2018 spending of the State and its agencies is approved, with credits of over 368 billion euros. The largest item is pensions, at over 144 billion euros.
2. Public sector salaries can rise by at most 1.5% in 2018. If 2017 GDP grows by 3.1% or more, an extra 0.25% is added from July 2018.
3. Pensions rise by 0.25% in general terms, plus an additional 1.35% increase in 2018. Minimum pension amounts rise by an additional 2.75%.
4. The reduction for employment income under personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. is improved, so workers with lower salaries start paying the tax later.
5. The maternity deduction rises by up to 1,000 extra euros if childcare costs are paid. Deductions for large families and for a spouse with a disability are also expanded.
6. VAT on movie theater tickets drops from 21% to 10%. VAT rules for digital and telecommunications services are also adjusted, effective from 2019.
7. The general working week in the public sector is set at an average of 37.5 hours. Each administration can adjust it if it meets the budget stability targets.
8. A new allowance is created for young people in the National Youth Guarantee System with low qualifications who sign a training and apprenticeship contract. The allowance equals 80% of the monthly IPREMIPREM Indicador Público de Renta de Efectos Múltiples: a reference amount used to calculate benefits and allowances..

Who it affects

• Public employees and pensioners: Their salaries and pensions rise within limits set by the law (1.5% for salaries; 0.25% plus 1.35% for pensions).
• Lower-paid workers and families: They pay less personal income tax thanks to the improved employment income reduction and the deductions for maternity, large families and disability.
• Young unemployed people with low qualifications: They can receive an allowance if they register with the Youth Guarantee System and sign a training and apprenticeship contract.
• Local governments and autonomous communities: They receive detailed rules on how state funds are distributed to them and how their resources can be withheld if they have debts.
• Businesses and self-employed workers: Tax rates (cinema, gambling, hydrocarbons), fees and Social Security contribution bonuses change in certain cases.

Words worth knowing

IRPF

Impuesto sobre la Renta de las Personas Físicas: Spain's personal income tax, paid on salaries and other income.

IPREM

Indicador Público de Renta de Efectos Múltiples: a reference amount used to calculate benefits and allowances.

Tasa de reposición

Replacement rate: the limit on new public sector positions an administration can offer, based on the previous year's departures.

Clases Pasivas

The pension system for State civil servants, separate from the general Social Security system.

Presupuesto limitativo

Limitative budget: a budget where the approved credit is the maximum that can be spent, with no overspending allowed.

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