Like every year, 2016 also brings important legal developments (we already informed you in our article dedicated to legal reforms)that have an impact on our pockets or our labor rights, among which the tax reduction states in personal income tax and the expansion of the retirement age.

These are the main economic measures that have come into force with the new year, which can affect us for better or worse:

1.- The retirement age is extended a little more. Anyone who retires in 2016 and wants to collect the 100% pension must have met certain conditions, such as having worked for a minimum of 36 years and having turned 65 years and four months. The retirement age will be lengthened little by little until to collect the 100% in 2027 you will need to be at least 67 years old.

2.- ATM commissions rise. Many bank customers were surprised when withdrawing money from ATMs. If the ATM and the card you use do not belong to the bank where your payroll or checking account is deposited, it is already charging you from 0.45 to 1.90 euros for each operation.

4.- Increase in salaries. The minimum wage will rise. The government approved an increase in the 1% minimum wage to 655.08 euros. Public employees will have a 1% increase. In addition, this month they will finish collecting the extra pay that they did not receive in 2012 and that was partially paid in 2015.

5.- Pensions barely rise. The minimum pension increases by a mere 0.25%. The benefits of the unemployed remain frozen.

6.- Lower personal income tax. The personal income tax in the state section drops by 3%. It will mean increasing the monthly payroll of employees by 20 euros. In this way, the rates on the income of individuals will be between 19% and 45%,

In the case of personal income tax, it will be the third time that taxpayers perceive that they pay less taxes, since the Government advanced part of the rate reduction that was planned for 2016 to July 1, 2015. This advance was applied with a intermediate rate which replaced the one that came into force at the beginning of 2015 and which, therefore, took effect between last January and December.

For 2016, the personal income tax rate, up to 12,450 euros of tax base, will be 19%; of that amount up to 20,200 euros, 24%; up to 35,200 euros, the 30%; up to 60,000 euros, the 37%, and from that amount, the 45%. Besides, the new rate for savings returns It will consist of three sections: up to the first 6,000 euros of profits, your taxation will go from 20% to 19%; from 6,000 to 50,000 euros, the applicable rate will decrease from 22% to 21%; and from 50,000 euros, the tax will be reduced from 24% to 23%.

7.- Energy reductions. According to the calculations made by the acting Government, electricity and gas bills have decreased since this month by an average of 0.7% and 3.3%, respectively. Specifically, reducing the regulated part of the electricity bill, which represents slightly less than half of the bill, will allow it to be reduced by an average of 2.8% compared to January 2015 and 0.7% compared to December, since there were an intermediate sale in summer. On the other hand, the drop in gas is explained by the lowering of the energy component, which represents half of the rate, in a scenario of low crude oil prices, while the regulated part remains frozen.

8.- Less corporate tax. The corporate tax goes from 28% to 25%. In the case of SMEs, it remains in 20% and in the case of newly created companies it will remain in 15%.

9.- Lower the capital gains tax. Withholdings on income from movable and real estate capital have been reduced to 19% (they were 19.5% since last July). The same happens with capital gains, image rights, which go from 19.5% to 19%.

10.-Perhaps the least favorable news that the new year brings remains at the end: the rise in the 1% of the social contributions paid by employers and workers to Social Security and that is in line with the increase in the 1% decreed for the SMI. The maximum base is established at 3,642.00 euros per month or 121.40 euros per day, 1% more than that in force during 2015.

If you want more detailed information about a specific matter that may affect you, contact with us and our experts will advise you.