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New criteria for tax allowances in the Valencian Community.

Announced by Valenciaplaza.com this week. The article is quite lengthy but worth reading.

On April 3, the 2023-2024 Income Campaign opens , which will last until next July. 

This is the period that all taxpayers have to submit their annual Income Tax Return , a document that is used to make “accounts” with the Treasury and that allows the Administration to:  

  • Know how much taxes each citizen must pay .
  • Have controlled all the income obtained by taxpayers during a year and their updated assets.

Basically, what we do in the Income Tax Return is present the expenses and income that we had in the previous year.

This is the basis for calculating the percentage of taxes that we must pay , although we can also benefit from some advantages depending on our type of work, our financial health or our family situation.

These advantages are known as tax deductions, and may vary depending on each Autonomous Community or region.

Next, we talk about the tax deductions that Valencians can take advantage of starting this year.

What are tax deductions? 

From a “collective” point of view, the Income Tax Declaration is a financial instrument designed so that each taxpayer contributes a certain amount to the State coffers according to their economic, family or individual condition.

This same mechanism also allows you to pay less taxes for contributing to the fulfillment of certain social, environmental or economic objectives .

This is what is known as “tax deductions” , or in other words, a series of discounts that reduce the amount we have to pay in taxes.

Spanish legislation contemplates deductions of a state and regional nature (depending on the autonomous community of habitual residence), and aimed at both individuals, self-employed workers and companies.

Some of the most common tax deductions are those for maternity (aimed at working mothers), large family (for families with three children or more), disability (a degree of disability greater than 30%), donations, patronage or promotion of energy efficiency (purchase of electric cars, improvements to increase the energy rating of homes, etc.).

In addition,  self-employed workers (self-employed workers) can also alleviate the tax burden they have to face with VAT deductions , for office expenses, for travel and transportation, for hiring external services or for personnel expenses.

Regarding companies, they obtain tax reductions associated with the creation of employment programs, investment in R&D, sponsorships or donations to artistic, cultural and sports projects.

The self-employed will pay monthly installments of 225 to 530 euros in 2024 and must present the Income Tax .

New tax deductions in the Valencian Community

Concepts and applicable percentages 

Residents in the Valencian Community will be able to benefit in their Income Tax Return this year from new tax deductions in the Valencian Community  associated with health care and the practice of healthy activities . 

Some of them are:

  • Oral health expenses . Deduction of 30%, up to 150 euros.
  • Expenses for purchasing prescription lenses, contact lenses and cleaning solutions for glasses and contact lenses . Deductions of 30%, up to 100 euros.
  • Expenses related to mental health ( applicable individually and to members of the family unit). Deductions of 30%, up to 150 euros.
  • Expenses generated by highly complex chronic diseases (rare diseases). Deduction of up to 100 euros (150 euros in large or single-parent families).
  • Expenses generated by  members of the family unit diagnosed with acquired brain damage or Alzheimer’s . Deduction of up to 100 euros (150 euros in large or single-parent families).
  • Expenses associated with  sports expenses (for example, going to the gym or joining a federation to practice a sport officially). Deduction of 30%, up to 150 euros.

There will also be tax deductions related to sports and healthy activities , such as the acquisition of mandatory sports equipment for the practice of federated sports, or the hiring of technical services and personal trainers and/or services of traumatologists, dieticians-nutritionists, physiotherapists, podiatrists or senior dietetics technicians.

Increases in telecoms, highway tolls, electricity, gas… and in personal income tax .

Who can benefit from these new tax deductions from the Valencian Community?

 Taxpayers with individual incomes of up to 32,000 euros or joint incomes of up to 48,000 euros will be able to benefit from the new deductions implemented by the regional government .

The deduction limits will apply to taxpayers whose sum of the general taxable base and the savings taxable base is less than 29,000 euros (individual) or 45,000 (joint).

They will also be essential requirements :

  • That medical treatments are provided by health professionals, establishments, centers or services registered in the General Registry of Health Centers, Services and Establishments or in the State Registry of Health Professionals.
  • That the acquisitions of said goods or services can be accredited by means of the corresponding invoice.

In addition, all payments must have proof and be made by transfer or similar (not in cash).

What are the limits of these tax deductions?

As we have already indicated, general deductions are 30% with a maximum limit of 150 euros .

The exceptions are:

  • People over 65 years of age or people with a proven disability equal to or greater than 33% (deduction of 50%, up to 150 euros).
  • People over 75 years of age or people with a proven disability equal to or greater than 65% (100% deduction, up to 150 euros).

High incomes pay more personal income tax in the Community and less in Madrid, according to the Council of Economists .

When do these new tax deductions come into force in the Valencian Community?

Valencians will be able to benefit from these deductions in the next Income campaign , corresponding to the 2023 financial year. 

Furthermore, the new measures are retroactive (they are applicable from January 1, 2023, although they were officially approved in February 2024) and are not exclusive.

This means that the same taxpayer may benefit from several reductions in the same Income Tax Return , as long as they meet the necessary requirements.

Source: https://valenciaplaza.com/nuevas-deducciones-fiscales-en-la-comunitat-valenciana

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