Extension of tax limits, pensions and minimum wage for 2020

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1. For 2020, the thresholds that let self-employed people and small businesses use the objective estimation method (módulos) for personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. and the simplified VAT scheme are extended. The limits rise to €250,000 and €125,000 depending on the case.
2. A one-month period, starting the day after the rule is published, opens to waive or revoke those methods and special schemes. Waivers filed in December 2019 count as filed on time.
3. The Wealth Tax stays in force during 2020. In addition, from 2021 a 100 percent rebate on the tax bill is set and several articles of its law are repealed.
4. The priority sponsorship activities for 2020 are approved, with deductions raised by five percentage points, along with the 2020 coefficients for updating the cadastral values of urban properties, which affect the local property tax.
5. Pensions and public benefits keep the same amount they had on December 31, 2019, until the budget is passed. The Social Security contribution rules of Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It usually applies from its publication, but the Congreso must validate it within 30 days of its promulgation or it lapses. 28/2018 are also extended, including those for self-employed workers, household employees and farm workers.
6. The 2019 minimum wage is extended until the 2020 one is approved. The rules in force before Law 27/2011 are also extended to 2021 for people who lost their jobs before 2013 at an advanced age.

Who it affects

• Self-employed people and small businesses: They can keep using the módulos method and the simplified VAT schemes in 2020.
• People with wealth: They keep paying the Wealth Tax in 2020.
• Pensioners: Their pensions stay frozen until the update is approved, with effects from January 1, 2020.
• Workers: The 2019 minimum wage stays in place until the 2020 one is set.
• Town councils: They can apply the cadastral value update coefficients, which affect the local property tax.

Words worth knowing

Estimación objetiva (módulos)

A way to calculate personal income tax for small businesses using fixed indexes instead of actual income and expenses.

Valor catastral

The value the Cadastre assigns to a property, used as the base for taxes such as the IBI.

IBI

Impuesto sobre Bienes Inmuebles: the municipal tax paid for owning an apartment or premises.

Mecenazgo

Private support for activities of general interest, such as culture, in exchange for tax deductions.

Prestación patrimonial

A mandatory payment to a public authority for a service received, which is not a tax.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It usually applies from its publication, but the Congreso must validate it within 30 days of its promulgation or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It usually applies from its publication, but the Congreso must validate it within 30 days of its promulgation or it lapses.

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