Tax breaks for businesses, rental housing and self-employed workers

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1. It creates the business savings account (cuenta ahorro-empresa) in personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.: people saving to start a new company can deduct 15 percent of the deposits, up to 9,000 euros per year. It only works for the first company and the money must be used for that purpose.
2. It raises from five to six million euros the revenue limit for a company to use the tax benefits available to small companies.
3. It sets up a special corporate tax regime for companies whose only business is renting out housing, with rebates of 85 or 97 percent of the tax bill if they meet requirements such as owning at least ten rented homes and offering a purchase option to one third of tenants. These companies can also buy the homes at the super-reduced VAT rate.
4. It improves protection for self-employed workers: it temporarily lowers the contribution base for new workers under 30 and women 45 or older, extends the exemption from contributions to workers 65 or older in the farm and sea regimes, and extends the temporary disability benefit from the fourth day off work (from the day after if caused by a workplace accident or occupational illness).
5. It aligns the contributions of self-employed farm workers with those of other self-employed workers starting in 2004, using transitional coefficients that rise gradually until 2018, and makes it easier for women doing farm work to join the regime by removing a minimum income requirement.
6. It makes changing mortgage terms cheaper: it cuts notary and registry fees for mortgage subrogations and modifications, caps the fee for extending the loan term at 0.1 percent, requires banks to offer interest rate hedging products, and limits the early repayment fee in subrogations.

Who it affects

• People who want to start a company: They can save in a business savings account and deduct 15 percent in personal income tax.
• Rental housing companies: They can get corporate tax rebates of 85 or 97 percent and buy homes at the super-reduced VAT rate.
• Self-employed workers: They get lower contributions when starting out, exemption from contributions from age 65, and a temporary disability benefit from the fourth day off work.
• Self-employed farm workers: They will contribute like other self-employed workers, with a gradual increase until 2018.
• People with a mortgage: Switching banks or terms costs less, and banks must offer products to hedge against rate increases.

Words worth knowing

IRPF

Spanish personal income tax, paid on earnings from work and other income.

Sociedad nueva empresa

A special type of limited liability company designed for entrepreneurs, with simpler procedures and costs.

Base de cotización

The amount on which Social Security contributions are calculated.

Subrogación hipotecaria

Moving a mortgage from one bank to another offering better terms, without taking out a new loan.

Novación

Changing the terms of a mortgage with the same bank, such as the interest rate or the term.

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