The extension to 2020 of the billing limits of the taxation by modules for the self-employed, the maintenance of the validity of the Wealth Tax, and measures in reference to the SMI, among the measures that it contemplates.
The BOE published on December 27 a Royal Decree-Law approved by the Government with tax, cadastral and Social Security measures, in which, among other measures, the billing limits of the taxation by modules for the self-employed are extended to 2020, and the validity of the Wealth Tax is maintained, a tribute whose collection is assigned to the autonomous communities.
Likewise, the cadastral values are updated, upwards or downwards, of the municipalities that have requested it and the amount of the 2019 minimum interprofessional wage is extended until the royal decree that sets the SMI for the year 2020 is approved.
On the other hand, the revaluation of pensions will take place when the new Government is constituted and the increase of 0.9% can be applied retroactively from January 1.
All these measures were approved by the Council of Ministers, through a Royal Decree-Law that includes measures in tax, cadastral and Social Security matters. The Government uses this legal instrument as it has not been able to process these issues through the ordinary parliamentary channel when it is in office and, therefore, with limited powers. The need to approve these measures derives from the fact that, in the event of not doing so, some of them would cease to be in force at the end of the year.
In tax matters, the Royal Decree-Law extends for the 2020 tax period the quantitative limits of billing by modules in Personal Income Tax.
The legislation in force until now included that for next year the thresholds from which a self-employed person cannot pay taxes by the objective estimation method would be reduced. The Royal Decree-Law approved today modifies this scenario and maintains the current exclusion limits unchanged.
In this way, self-employed workers will not be able to pay taxes by the objective estimation method when the set of their activities exceeds 250,000 euros or when the billing to other businessmen or professionals exceeds 125,000 euros. If this Royal Decree-Law had not been approved, the previous limits would be established at 150,000 euros and 75,000 euros, respectively.
In addition, the self-employed who purchase goods and services up to 250,000 euros may remain in the module system. This limit was scheduled to be reduced to 150,000 euros in 2020.
Similar to the aforementioned measure, the limits for the application of the simplified regime and the special regime for agriculture, livestock and fishing, in the Value Added Tax, are extended for the 2020 tax period.
Extension of the Wealth Tax
The decree also contemplates the extension of the Wealth Tax for the year 2020, a tax whose yield is assigned in its entirety to the Autonomous Communities, which have broad jurisdiction over it.
The validity of the wealth tax has been extended annually since 2013.
Update of cadastral values
The Royal Decree-Law also includes the approval of the updating coefficients -upward or downward- of the cadastral values of urban real estate for 2020 under the terms of article 32.2 of the Real Estate Cadastre Law.
This measure is a consequence of the budget extension, so it is necessary for the coefficients to be updated before January 1, 2020 by decree, as has been the case in the last three years.
This measure contributes to reinforcing municipal financing, fiscal consolidation and the budgetary stability of local entities.
Likewise, the Ministry of Finance has approved an Order, which will be published shortly in the Official State Gazette (BOE), with the list of municipalities in which the upward or downward updating coefficients may apply.
This measure only affects urban properties and is adopted under the terms established by the Real Estate Cadastre Law and which requires that there be a previous municipal request. Prior to the publication of this Order, compliance with the technical requirements demanded by the Law has been evaluated, which, in essence, consists of the fact that at least five years have elapsed since the entry into force of the last collective evaluation procedure of a general nature, and that there are substantial and homogeneous differences between the market values and those that served as the basis for the determination of the current cadastral values.
In total, up to 1,092 municipalities benefit from this update, the application of which will be effective from January 1, 2020. The global average increases and decreases together reach 3%, respectively. The maximum increment does not exceed 5%.
Measures in employment and Social Security
The Royal Decree Law also includes the extension of the term of validity of Royal Decree 1462/2018 of December 21, which set the minimum interprofessional wage for 2019. Given that the aforementioned Royal Decree will cease to take effect on December 31, there are extraordinary reasons and urgent need that make it unavoidable to maintain its validity as of January 1, until the royal decree of the interprofessional minimum wage for the year 2020 is approved within the framework of social dialogue and in accordance with the provisions of article 27 of the revised text of the Workers' Statute Law.
On the other hand, the suspension of article 58 of the consolidated text of the General Social Security Law (LGSS) is included, which includes an increase of 0.25%, since the Government plans to apply, as soon as possible, a revaluation of pensions of 0.9%, with retroactive effects from January 1, 2020, as stated in the Budgetary Plan for the next year sent to the European Commission.
If this article were not suspended, there would be two revaluations (from 0.25% first and up to 0.9% later), which would double the computer applications and multiply by two the cost of communication to pension beneficiaries.
On the other hand, the regulatory text published today guarantees during 2020 the maintenance of the regulations prior to Law 27/2011, of August 1, on updating, adaptation and modernization of the Social Security system, for certain groups that saw their employment terminated. employment relationship before 2013. In view of the fact that the extension of this provision -the so-called "safeguard clause"- until December 31, 2019 included in RDL 28/2018 has not been sufficient to alleviate the effects that the new regulation would cause those workers who left the labor market at an advanced age without having been able to resume their professional career and with the consequent direct impact on their contributions and benefits, it is necessary for reasons of legal security and preservation of equality its extension until the end of 2020.
The text also extends some of the measures adopted in Royal Decree-Law 28/2018 regarding the bases and types of Social Security contributions, which guarantee their applicability as of January 1, 2020, given the temporary nature that had this standard, circumscribed to the year 2019.