400 euro income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. deduction plus aid for companies and jobseekers

Automatic summary, not yet reviewed

1. It creates a deduction of up to 400 euros per year in personal income tax for people earning income from work or business activities, effective January 1, 2008. It applies early through changes in withholdings, without waiting for the tax return.
2. For installment tax payments in 2008, companies and self-employed workers can choose between calculating them based on the previous year's tax bill or on the taxable base for the period, without including the adjustments from the new accounting rules. In addition, the deadline for the April payment is extended to May 5, 2008.
3. It expands the exemptions of the Non-Resident Income Tax for government debt and fixed-income securities, although they will not apply to income coming from tax havens.
4. It broadens the concept of building rehabilitation under VAT and the Canary Islands indirect tax: to calculate whether the work exceeds 25 percent of the value, the proportional part of the land is deducted. This means more works count as rehabilitation and benefit from the reduced rate.
5. It raises to 3,000 million euros the state guarantee funding for securitization bonds under the FTPYME program, which finances small and medium-sized companies, and sets the limit for outstanding guarantees at 7,700 million euros.
6. It authorizes the Government to approve an extraordinary plan for job counseling, training and job placement, with subsidies of 350 euros per month during the job search and aid for travel, moving, housing and childcare costs for unemployed people who find work in another town.

Who it affects

• Employees and self-employed workers: They receive a deduction of up to 400 euros per year in personal income tax, applied through withholdings.
• Companies and self-employed workers making installment tax payments: They can choose how to calculate them in 2008 and get more time in April.
• Construction companies and developers: More works count as rehabilitation and are taxed at the reduced rate.
• Small and medium-sized companies: They have more state guarantees to obtain financing through securitization.
• Unemployed people: They can receive subsidies during the job search and aid if they move to another town to work.

Words worth knowing

IRPF

Impuesto sobre la Renta de las Personas Físicas: the Spanish personal income tax, paid on income from work and business activities.

Pago fraccionado

Installment tax payment: an advance payment of tax that companies and self-employed workers make during the year, before the final settlement.

Titulización

Securitization: an operation in which loans are pooled and bonds backed by them are issued to raise financing.

IPREM

Indicador Público de Renta de Efectos Múltiples: a public income indicator used in Spain to calculate benefits and subsidies.

Aval del Estado

State guarantee: a guarantee under which the State covers a debt if the issuer cannot pay it.

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