Main fiscal news at the end of the year

The new legislation at the end of the year has led to the modification of certain tax regulations, so we will now mention the most relevant ones:

Corporate Income Tax

• Deduction for producers who commission a foreign production of feature films or audiovisual works: Royal Decree-Law 26/2018 provides for the possibility of establishing, by regulation, the necessary requirements for the application of this deduction.
• Variations in value as a result of the application of the fair value criterion: Royal Decree-Law 27/2018 amends the article relating to these variations in value, having tax effects both on the profit and loss account (as up to now) and on the reserve account, for financial years commencing in 2018.

In addition, the same standard adds a transitional provision to the Law so that it adapts the standard to credit institutions as a result of the changes to two new IFRSs, 9 and 15.

Value Added Tax

• Simplified system: Royal Decree-Law 27/2018 maintains the limits on the volume of income in the previous year for all business or professional activities, excluding agriculture, forestry or fishing, so that the amounts remain at 250,000 euros to apply the simplified system in 2019.

The same limit will apply to the special regime for agriculture, livestock and fisheries for the acquisition of goods and services.

This means that a new period of time will be given to waive these regimes, which can be waived until 29 January 2019.

• Multipurpose bonds: the resolution of the DGT of 28 December 2018 on the treatment of multipurpose bonds seeks to harmonise VAT taxation in all the Member States of the European Union. VAT is levied on vouchers where the actual supply of goods or services has taken place in exchange for the voucher.
• Royal Decree 1512/2018, of 28 December, which amends the VAT, Tax Invoicing and Excise Regulations, introduces new legal references and changes that have been made to the related legal texts.

The main modifications would be the following:

• It will be possible to choose to pay tax in TAI for certain supplies and services that are not located in TAI, even if these operations have not exceeded the threshold of 10,000 euros that existed until now.
• The Regulation is adapted to the application of reverse charge in cases where the recipient is entitled to full or partial deduction.
• The option to apply the SII can be made throughout the year, not as it has been until now, which was limited to the month of November. However, if it is registered on a date different from the first day of the calendar year, they will be obliged to send the invoicing records of the period prior to that date corresponding to the same calendar year, identifying that they are operations prior to the inclusion in the SII.

Personal Income Tax (IRPF)

• Withholdings on capital gains from intellectual property, when the taxpayer is not the author: Royal Decree-Law 26/2018 regulates that from January 1 the percentage of withholding and payments on account is reduced to 19% and 15%, respectively.
• Maternity and paternity benefits: Royal Decree-Law 27/2018 establishes that these are exempt from taxation, in application of the Supreme Court ruling, both for 2018 and for previous years that have not expired.
• This same rule maintains the limits of exclusion of the objective estimate so that the amounts continue to be 250,000 Euros and 125,000 Euros for the volume of total income in the previous year. This also means that a new deadline is given for renouncing the way in which the net yield is determined, which can be renounced until 29 January 2019.
• Royal Decree 1461/2018, of 21 December, amends the Personal Income Tax Regulations, updating the rule in accordance with the changes introduced regarding the deduction for maternity, large family, dependent disability and the limits on the obligation to file an income tax return, among others.

In relation to the above, we would like to remind you that the deduction for maternity was increased by 1,000 euros for childcare expenses, and with effect from 5 July 2018, the deduction for large families was increased by 600 euros per year for each child that is part of the large family and that exceeds the minimum number of children required to acquire this condition, and the deduction for disabled dependents was established at 1,200 euros per year for taxpayers with a spouse, not legally separated, who is disabled and whose income does not exceed 8,000 euros.

Wealth Tax

For the umpteenth consecutive year, the validity of the Wealth Tax has been extended again for 2019, by means of Royal Decree-Law 27/2018.

In addition to the above developments, changes are also made to various declarations of an informative nature and others of a formal nature.