25 Recommendations for personal income tax at the end of the year

 

Dismissals: go to SMAC

1. In the event of dismissal, if the compensation is less than 180,000 euros, it is necessary to go to conciliation, that is, to the Mediation, Arbitration and Conciliation Section (SMAC) so that the compensation can be exempt. If it is higher than this amount, it must be taxed.

Furthermore, if you are in the first case, that is, exempt from paying compensation, having been dismissed, if your employer or another related company wants to hire you before three years have passed since you were dismissed, it is worth doing the math to take into account the fiscal cost of taxing the income that you left exempt. In these cases, you will have to file a supplementary declaration in which the compensation is included.

Bad debt: claiming in 2015

2. Uncollectible credit right (not arising from economic activity): if you are not going to be able to collect it, and you decide to claim it judicially, it is better to do so before the end of the year, so that you can compute the loss next year 2016 in your 2015 personal income tax return.

Agreeing on income in kind: some are not taxed

3. Looking ahead to 2016, the worker may be interested in agreeing with the company the replacement of monetary income from certain income in kind, since there are some that are not taxed, such as transportation cards, restaurant vouchers or medical insurance for the worker, his/her spouse and children.

If the company has to provide you with a vehicle, it is better if it is energy efficient because it could reduce this in-kind income by up to 30%.

Pensions and jobs abroad

4. If you are collecting pensions from a foreign country, do not forget that you have to pay taxes on worldwide income in your personal income tax and, therefore, you will most likely have to include such returns.

5. If you have performed any casual work abroad, an exemption may apply, depending on circumstances such as whether the entity is non-resident or has a permanent establishment, and the country in question.

Deductions in case of rent:

6. It is always a good idea to anticipate the expenses you will have to incur, such as repairs, taking into account that the sum of these types of expenses plus financial expenses is limited to the amount of total income.
7. If you have a large number of rented properties, especially if they are not properties intended for residential use, you should consider whether the leasing can be classified as an economic activity, for which you will need to hire a person with a full-time employment contract to manage the activity.

Recognition of a return on movable capital: better in 2016

8. Apart from the deferral to 2017 that we achieved, the savings scale will be reduced by half a point in each bracket.

Long-term savings plans

    9. If you do it in 2015, you may not pay taxes.If you plan to keep it for at least 5 years, it does not exceed 5,000 euros and the withdrawal is in the form of capital, you will not pay taxes if you do so this year.

If you are the holder of a Systematic Individual Savings Plan (PIAS), and 5 years have passed since the first contribution, you can withdraw it with exemption in 2015.

If you are approaching 65:

Transfer of housing or ownership of assets and rights with latent capital gains: better to wait until they are fulfilled

10. If you are close to turning 65 and are thinking of transferring your habitual residence, and there is an implicit capital gain in it, it may be better for you to wait until you reach that age and, in this way, the capital gains that occur will be exempt. You should not forget that you may have to pay IIVTNU.

If you own assets or rights with latent capital gains and are thinking of selling them to supplement your retirement, wait until you are 65 and sell them. If you create a life annuity of up to 240,000 euros, the capital gain will not be taxed.

Tacit capital gains from an asset or right: it is better to transfer it in 2016

11. If you have an implied capital gain in an asset or right and you plan to transfer it soon, you may It is better to do so at the beginning of 2016 than at the end of 2015 because this will delay the integration of the capital gain by one year and, in addition, will result in tax being paid at a rate half a percentage point lower in each bracket.

Late declaration of assets abroad: better to make the supplementary declaration

12. If you are forced to file your declaration of assets and rights abroad late, consider the possibility of avoiding the corresponding penalty by including, before you are required to do so, the value of the assets and rights declared as unjustified capital gains in the corresponding supplementary income tax return.

Civil companies: in attribution of income if dissolution and extinction within a period of time is not chosen

13. Partners of civil companies with legal personality and commercial purpose who do not wish to pay corporate tax will have to adopt the agreement to dissolve and liquidate the entity before June 30, 2016 and, in the six months following the date of the dissolution of the company, the following will be required: months, to extinguish it. Until this last occurs, the civil society will continue to be under the income attribution regime.

Economic activity in habitual residence: be careful with the expenses to be deducted

14. If you carry out an economic activity in the same flat as your habitual residence, you will have to be careful with the deductibility of certain expenses. Thus, the expenses corresponding to the ownership of the property, such as the IBI, garbage tax or those of the neighborhood community can be distributed according to the square meters used for the activity and those occupied by the home. However, according to the administrative criterion, those of supplies that are not separated, such as electricity, telephone or ADSL, can be deducted, but not only based on the square meters, but also on other variables such as the number of hours of the day dedicated to the activity.

Deduction of expenses for customer and supplier services: 1% maximum

15. If you determine the net income of your economic activity using a direct estimate system and you want to satisfy your clients and suppliers before the end of the year, keep in mind that you can only deduct a maximum of 1% per year from the net amount of your turnover.

Module system: system change or not.

16. Taxpayers who have been applying the modular system to determine the net income from their business activities and who can continue to apply it in 2016, are interested in deciding whether it is better for them to continue with this system or to give it up and move on to determining the income using direct estimation in the next fiscal year.
17. Taxpayers who are in modules in 2015 and leave this system in 2016 due to exceeding the limits on income or purchases in 2015, because their activity can no longer be included in this method or because they have exceeded the number of vehicles –if it is a matter of transporting goods or moving– must decide whether in 2016 they want to be in normal or simplified direct estimation and plan how to comply with the formal obligations required by one or the other system.

If they were also under the simplified VAT regime, they should know that if they are excluded from modules in the personal income tax or renounce said method, they will also pay VAT under the general regime.

Contributions to social security systems: you may be interested in making contributions

18. To reduce the tax bill, as was the case before the reform, you can make contributions to social security systems, although the absolute maximum limit has been lowered from 10,000 or 12,500 euros in 2014 to 8,000 euros/year in 2015, and there is also a relative limit of 30% of the sum of net income from work and net income from economic activities.
19. In the event that your spouse obtains net income from work that, added to those of If your economic activities do not exceed 8,000 euros per year, you may be interested in contributing to a social security system with a maximum limit of 2,500 euros per year in 2015 and thus be able to reduce your base by this amount as well.

Capital gains:

20. If you are thinking of transferring shares in investment funds, in the operation of which capital gains will be generated, you may be interested in reinvesting the proceeds obtained in another fund and not paying taxes now on the capital gains, deferring said taxation until the time when you definitively leave these collective investment institutions.

21. If you had capital gains in 2015 from the transfer of assets (property or shares, for example), you can reduce the cost of personal income tax by transferring other assets in which you have latent losses, even if they are securities acquired less than a year in advance, since these losses will be subtracted from previous gains.
22. If in previous years we had a negative balance arising from the transfer of assets – even when that balance was due to transfers less than one year old – and no more than four years have passed since it was generated, we can realize capital gains before the end of the year and their taxation will be attenuated or cancelled by the offsetting of those negative balances.
23. If there are positive returns that go to the savings part, such as those from interest or dividends, in 2015 they can be reduced by the negative balance of the integration of capital gains and losses arising from transfers, up to a maximum of 10% of those. The remaining negative balance may offset the positive balance of the other compartment in 2016 (limit of 15%), in 2017 (limit of 20%) and in 2018 and 2019 (limit of 25%).

Benefits of economic activities:  

24. If you are going to have profits from your economic activity in 2015, you will be interested in investing them in new elements of tangible fixed assets or in affected real estate investments and, in this way, you will be able to deduct 5% in the quota (2.5% if it is income obtained in Ceuta or Melilla or with the right to a reduction for starting the economic activity).
25. More interestingly, if you had profits in 2014 – and did not invest them in that year – you will make them in 2015 and thus apply the deduction for investment of profits to 10% in general or to 5% in the cases specified in the previous recommendation.