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03-01-2023

General State Budget 2023

On 24-12-2022, the General State Budget Law for 2023 (L 31/2022) was published in the Official State Gazette (BOE).

Below are the main changes in the tax, labour and Social Security fields, with effect from 1-1-2023.

TAX

In the area of taxation, the following novelties, among others, are included:

IRPF

  • Reduction for obtaining earned income. The application of the reduction is extended to taxpayers whose net earned income is less than 19,747.5 euros, provided that they do not have income, excluding exempt income, other than earned income of more than 6,500 euros.
  • Withholdings and payments on account on earned income in 2023. The withholding or payment on account by the general procedure on income from work paid in January 2023 will be made in accordance with the regulations in force on 31-12-2022.
  • Reduction of the net income from economic activities in direct estimation, provided that they do not have income, excluding exempt income, other than that from economic activities in excess of 6,500 euros:
    • Net income equal to or less than €14,047.5: €6498/year.
    • Net income between €14,047.5 and €19,747.5: €6,498 minus the result of multiplying the difference between the income from economic activities and €14,047.5/year by 1.14.
  • Savings tax rates. The scale of taxation of savings is modified, adding a new bracket for the savings taxable base from 300,000 euros, which is taxed at a rate of 28%.
  • Deduction for maternity. It is extended to women with children under the age of 3 who are receiving unemployment benefits at the time of the child’s birth.
  • Withholding on income from intellectual property. A withholding and payment on account percentage of 15% is applied to income from intellectual property, whatever its classification. Also, under certain circumstances, a withholding and payment on account rate of 7% is allowed for such income and for income from work derived from the production of literary, artistic or scientific works.
  • Imputation of real estate income during the 2023 tax period. The imputation percentage of 1.1% applies in the case of properties located in municipalities in which the cadastral values have been revised, modified or determined by means of a general collective valuation procedure, in accordance.
  • Deduction for habitual and effective residence on the island of La Palma. In the 2022 and 2023 tax periods, taxpayers who are habitually and effectively resident on the island of La Palma will be entitled to a deduction on the same terms as the deduction for income obtained in Ceuta and Melilla for taxpayers resident in these territories is regulated in the tax regulations.

IS

  • Tax rate. A new tax rate of 23% is established for entities whose net turnover in the immediately preceding tax period is less than 1 million euros.
  • Accelerated depreciation. With effect for tax periods commencing on or after 1-1-2023, investments in certain electric vehicles may be depreciated by applying double the maximum coefficient provided for in the depreciation table.

VAT

  • Assumptions of reversal of the taxable person:
    • Its application is extended to supplies of plastic and textile waste and scrap.
    • The rules concerning the taxable person are amended so that the reverse charge rule applies to supplies of such waste and recovery materials.
    • Supplies of property leasing services subject to and not exempt from VAT, which are carried out by persons or entities not established in the territory of application of the tax, and supplies of property leasing intermediation services carried out by non-established entrepreneurs or professionals, are excluded from the application of this rule.
  • Uncollectible credits:
    • The minimum amount of the taxable base of the transaction is reduced when the defaulting recipient is a final consumer.
    • The period for recovering VAT is extended to 6 months from the date on which the credit is declared uncollectible.
  • Simplified system:
    • The increase from €150,000 to €250,000 in the magnitude excluding the simplified tax regime included in LIVA art.122.Dos.2º and 3º, and 124.Dos.6º is extended for the year 2023.
    • It is established that renunciation of the simplified regime, as well as the revocation of these, may be made from 25-12-2022 to 31-1-2023.

ITP and AJD

The scale of taxation of noble titles and grandeur is updated by 2%.

Local taxes:

  • IAE. Various modifications have been made to the IAE rates.
  • IBI. The deadline for approval of the total value assessments and the rate of taxation of the tax by local councils affected by general collective valuation procedures is modified.
  • IIVTNU. For the determination of the tax base, the amounts of the maximum coefficients to be applied to the value of the land are updated according to the period of generation of the increase in value.

LABOUR AND SOCIAL SECURITY

The main social innovations contained in the LGPE 2023 are as follows:

Pensions:

  • Average revaluation of pensions equal to the increase in the CPI between December 2021 and November 2022, which will not be able to exceed the maximum limit set for 2022 (€2,819.18/month) increased by the same percentage as the CPI between December 2021 and November 202). The income limit for receiving minimum supplements is set at €7,939.00/year, increased by the same percentage as the CPI between December 2021 and November 2022.
  • Contributory pensions: the amount is increased by the same percentage as the CPI between December 2021 and November 2022.
  • Non-contributory retirement and non-contributory disability pensions are increased by the same percentage as the CPI between December 2021 and November 2022. The housing allowance is set at 525 euros/year for pensioners who can prove that they do not own their own home and have rented accommodation as their habitual residence (art.44).
  • Orphan’s benefits caused by violence against women, will experience in 2023 an increase equal to that approved for the SMI for that year.
  • SOVI pensions not concurrent with other public pensions. The amount is fixed on an annual basis at the amount resulting from applying to 6,470.80 euros the same percentage increase experienced by the CPI between the months of December 2021 and November 2022. When they coincide with widow’s or widower’s pensions from any of the Social Security system schemes, the amount of the pension is 6,280.40 euros, increased by the same percentage increase as the CPI between December 2021 and November 2022.

RGSS contribution:

Maximum base 2023: 4,495.50 euros per month.
Minimum bases 2023: they will increase by the same percentage as the increase in the SMI.
Contribution rates: those currently in force will remain unchanged.
Contracts for training and apprenticeship and alternating training contracts. The single contributions for each day worked, applicable as of 1-1-2023, will be those for 2022 increased in the same proportion as the SMI for 2023.
Household employees. In 2023, the monthly remuneration and contribution bases for common and professional contingencies will be those contained in the following scale, the amounts of which will be updated in the same proportion as the SMI for the year 2023.

RGSS contribution:

  • Maximum base 2023: 4,495.50 euros per month.
  • Minimum bases 2023: they will increase by the same percentage as the increase in the SMI.
  • Contribution rates: those currently in force will remain unchanged.
    Contracts for training and apprenticeship and alternating training contracts. The single contributions for each day worked, applicable as of 1-1-2023, will be those for 2022 increased in the same proportion as the SMI for 2023.
  • Household employees: In 2023, the monthly remuneration and contribution bases for common and professional contingencies will be those contained in the following scale, the amounts of which will be updated in the same proportion as the SMI for the year 2023.

Bonuses and reductions

  • The suspension of the system for reducing contributions for occupational contingencies due to a reduction in the number of accidents at work (prevention bonus) is maintained for contributions generated during the year 2023. This suspension will be extended until the regulatory regulation is reformed.
  • A 50% reduction (60% in 2022) and a 7.50% reduction in the employer’s contribution to the contribution for common contingencies is envisaged for the Special System for handling and packaging fresh tomatoes for export.
  • Incentives are established for the exercise of an employed or self-employed activity in the provinces of Cuenca, Soria and Teruel.

Unemployment benefit

The amount of unemployment benefit from day 181 is increased to 60% of the regulatory base (previously 50%); this percentage will also apply to those who were already receiving unemployment benefit on 1-1-2023.

OTHER ISSUES

  • Legal interest rate: 3.25%.
  • Interest for late payment: 4.0625%.
  • IPREM: the following amounts are established for the year 2023:
    • Daily: 20 euros.
    • Monthly: 600 euros.
    • Annual: 8,400 euros or 7,200 euros if extra payments are expressly excluded.
  • Pension plans: changes are introduced in the limits on contributions to pension plans in the event that the company contribution is between 500.01 and 1,500 euros. In this case, the worker’s maximum contribution will be 1,250 euros, plus the result of multiplying the difference between the company contribution and 500 euros by 0.25

If you have any doubts about this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.