There are many taxes that exist today. One of the most basic and important for all people the so-called personal income tax. It could be said that its understanding is a civic obligation for all residents of Spain. To help you better understand this tax, we are going to explain what personal income tax is.
If you have any questions about this tax, I recommend that you keep reading. We will explain what personal income tax is, who pays it and how much it is paid.
What is personal income tax and who pays it?
To know what personal income tax is, it is essential that we know what its acronyms mean: Personal Income Tax. And what is a natural person? It is about an individual who can have both rights and obligations. Basically, the natural person is a human being residing in Spain.
To be considered a resident in Spain, the origin or nationality does not matter. If you live most of the time in this country, you are considered a resident. Therefore, those people with Spanish nationality who are abroad most of the time, are not considered residents in Spain, so they do not have to pay this tax. However, there are some exceptions, such as diplomats. On the contrary, foreigners who live in this country do have to pay it, even without having Spanish nationality.
Therefore, personal income tax is a tax imposed on each person who contributes to the maintenance of the State. That is to say: It is the citizens who pay this tax. Later we will explain what factors influence the amount that must be delivered to the State.
Operation in Hacienda
We all know that at the end of the year, there is little left to make the dreaded income statement. In some cases it is necessary to pay more money to the Treasury, and in others it is the Treasury who returns some of the money paid. Throughout the year, people are paying monthly an advance of the tax to the Treasury. All workers with payroll have a withholding on it, that is, they do not collect their full salary since part of it is left by the employer to enter it in the Treasury on behalf of the employee. This is called "payment on account."
Exactly the same thing happens to the self-employed. Whenever someone pays a bill from them, in that same invoice they retain a percentage that is established by law. That part withheld is later entered into the Treasury on your part.
As long as the amounts paid to the Treasury are excessive in terms of what corresponds to the person in question to pay, This can claim the corresponding refund of the money. But be careful, the opposite case can also happen: If we have paid less than our share, the Treasury will claim the rest from us.
How much is paid in personal income tax?
Now that we know what personal income tax is, we are going to explain how much is paid and what factors influence this amount. To pay this tax, the person in question must fill in form 100 prepared by the Tax Agency. Once this form is filled in, the final calculation is made of what you have to pay or what you have to return. The amount that each citizen has to pay It depends mostly on your income, but also on your personal situation. When we talk about income, it is important to know that it is a progressive tax. That is to say: The more you earn, the more you have to pay. In the year 2022 the following sections of personal income tax are established:
- Up to € 12.450 per year: 19% of personal income tax
- € 12.450 to € 19.999 per year: 24% of personal income tax
- € 20.000 to € 35.199 per year: 30% of personal income tax
- € 35.200 to € 59.999 per year: 37% of personal income tax
- € 60.000 to € 299.999 per year: 45% of personal income tax
- From € 300.000 per year: 47% of personal income tax
Factors that influence the amount of personal income tax
When filing income tax returns, individuals generally pay for their earnings for the corresponding year. But nevertheless, Not only income from work is considered, but all are included. This non-labor income can be aid, subsidies, income from financial products, etc. All of them must be declared.
However, only income is not taken into account when making the income statement, if not also the personal situation of each one. There are several factors that can lower the amount to be paid, such as handicaps, having dependents, being over 65 years old, etc. In this way, two people whose income volume is the same, may not pay the same, since their circumstances are different.
Finally, we still have to mention the so-called "deductions." These are expenses that the person in question has made and that reduce the amount that must be paid to the Treasury. These are usually contributions to pension plans, donations, etc.
I hope that with this article it has become clearer to you what personal income tax is.