Urgent measures to boost Spain's economy and jobs

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1. A new income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPFIRPF Spanish personal income tax, the tax paid on earnings from work and other income.) deduction of 10% is created for improvement works on a main home, capped at €12,000 per home, for taxpayers with a taxable base under €53,007.20, for works done through December 31, 2012.
2. The reduced VAT rate applies to renovation and repair works on homes through December 31, 2012, and the concept of structural rehabilitation is expanded to include similar and connected works, such as energy rehabilitation.
3. Companies that have requested a voluntary creditor proceeding and reached an agreement can keep their public contracts and subsidies, and their guarantee is refunded if the proceeding is not found to be at fault.
4. Companies can keep using free depreciation with job maintenance in 2011 and 2012, and the requirements to recover VAT on unpaid invoices are relaxed, with shorter deadlines for smaller companies.
5. A direct financing program for small and medium-sized businesses and self-employed workers through the ICO must be running before June 15, 2010, and tax documentation duties for related-party transactions are simplified for small companies.
6. If the sale of a foreclosed main home does not cover the debt, the protected amount that cannot be seized rises by 10% of the minimum wage, plus another 20% for each family member without their own income.
7. Dependency care services provided through allocated places or public tenders pay a super-reduced 4% VAT, and amounts companies pay for employees' public transport are exempt from income tax up to €1,500 a year.
8. In the electricity sector, the law defines energy services companies and system charge managers, who will provide recharging services to promote electric vehicles, and it makes it easier to securitize the electricity tariff deficit.

Who it affects

• People with a mortgage on their main home and family responsibilities: A larger share of their income is protected from seizure if the home sale does not cover the debt.
• Homeowners doing improvement works: They can deduct part of the cost from income tax and pay less VAT on the works.
• Small and medium-sized businesses and self-employed workers: They get direct ICO financing and fewer administrative and tax burdens.
• Companies in general: Their tax burden is lighter (depreciation, VAT on unpaid invoices) and access to public contracts and subsidies is easier if they enter a creditor proceeding.
• People in situations of dependency and their families: Dependency care services pay a lower VAT rate.

Words worth knowing

IRPF

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

IVA

Spanish VAT (value added tax), the tax added to the price of most goods and services.

Base imponible

The taxable base: the amount of income on which the tax is calculated.

Concurso de acreedores

A court proceeding for a company or person that cannot pay its debts, in which terms are negotiated with creditors.

Titulización

Securitization: turning future receivables into financial securities that can be sold to raise money now.

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