State Budget 2020 - Main Changes

VALUE ADDED TAX (VAT)

Increase in VAT exemption for self-employment income from 10,000 euros to 12,500 euros.

MUNICIPAL TAX ON REAL ESTATE (IMI)

United de facto and legally separated spouses now receive a joint IMI collection note and can benefit from the phased payment.

 

INCOME TAX FOR INDIVIDUALS (IRS)

Amendment to the tax regime for Non-Habitual Residents (RNH), through the application of a 10% tax on income from pensions from foreign sources;
IRS exemption for work earnings earned by young people, up to an annual limit of five times the Social Support Index (IAS), that is, 2,194.05 euros;
Partial exemption for young people during their first three years in the labor market, and in the first year, they only pay IRS on 70% of income; in the second, over 80%; and in the third, over 90%;
Extraordinary increase in pensions, with it being determined that pensions up to 1.5 times the value of the IAS (that is, 658.2 euros per month) will have an increase of ten euros, from the month following the entry into force of the State Budget;
Failure by the self-employed workers to deliver Quarterly Income Statements to Social Security in 2019 will not be subject to fines;
Local accommodation in containment areas is now taxed on a 50% share, compared to the previous 35%.

 

TAX ON INCOME OF COLLECTIVE PERSONS (IRC)

Increase of the maximum limit of reinvested profits that can be deducted from the IRC, from 10 to 12 million;
Expansion of the limit of taxable profit (from 15 to 25 thousand euros) that allows Small and Medium Enterprises (SMEs) to have access to the reduced rate of IRC of 17%.

MUNICIPAL TAX ON TRANSFER ONLY FOR REAL ESTATE (IMT)

Properties with a book value of more than one million euros are now subject to a higher IMT rate, that is, from 6% to 7.5%.