Its time to hand in your tax returns to Spain’s Hacienda as the April tax deadline quickly approaches
April is here, and with it comes the crucial deadline of April 11 for submitting tax returns to the agency. While accountants are likely prepared for this deadline, there may be many self-employed workers who are unaware of its significance in their financial operations.
Unfortunately, self-employed workers are often considered one of the most vulnerable groups in the social system. Despite their significant contributions, they often receive very little in return.
The new year has ushered in the implementation of the new real income contribution system, which requires all self-employed individuals to declare their income regardless of the amount. However, the impact of this change will only be felt during next year’s declaration in 2024.
Many people are unsure if they are obligated to comply with the Treasury if their income has been very low. The Tax Agency has clarified that those who had a net income of over 1,000 euros last year must file their taxes.
The Tax Agency has also outlined some requirements for expenses to be deductible. Firstly, expenses must be properly justified and related to the economic activity of the self-employed individual. Additionally, the expense must be accurately recorded in the accounting or mandatory record that must be maintained. Once documentation, relationship, and registration are verified, it is possible to consult the twenty available variables to potentially save on personal income tax.
The list of concepts that can be deducted in the Treasury is extensive, including salaries, extra payments, payments in kind, and workforce contributions to Social Security. Other deductible expenses include employee expenses for travel and insurance policies, staff expenses for training or gifts, royalties and leases, consumption of gas, water, electricity or telephony used in the workplace, machinery repairs, and financial expenses like surcharges or interest.
Contributions of the self-employed or corporations, associations, or chambers and commissions for subcontracted work are also included in the possible deductions. Compensation resulting from dismissals or early retirement, raw materials acquisition, workers’ insurance contributions, taxes like the IAE, IBI, and fees that do not have a sanctioning nature, as well as expenses for advisers, the management or lawyers, amortization of tangible or intangible assets, and real estate investments, professional publications or expenses for attending conferences, congresses or courses are also deductible.
Filing taxes might seem complicated, which is why it is important to enlist the help of a trustworthy and reliable accountant. The deadline for submission is a little over a week away, so it’s important to act quickly.