The 2016 General State Budget Law (Ley 48/2015 de Presupuestos Generales del Estado para 2016) introduces substantive changes in the field of taxation. It is worth stressing, among others, the new calculation method of the tax incentive known as patent box and the increase of the limits that detemine the exclusion of the application of some VAT and Personal Income Tax regimes.
Corporate Income Tax
For taxpaying periods starting from 1 January 2015 the total income requirement not to file the tax return is raised from EUR 50,000 to EUR 75,000 with respect to some institutions which are partially exempt from this tax.
For taxpaying periods starting from 1 January 2016, the conversion of certain deferred tax assets (known as DTAs) into tax credits enforceable against the Tax Administration is established under certain circumstances. Additionally, new requirements are foreseen so that the DTAs generated after the entry into force of this Act can acquire the right to conversion. Likewise, the DTAs previously generated that do not fulfil the new requirements can maintain the right to conversion, although to do so, a patrimonial provision consisting of 1.5% of the total amount of these assets existing on the last day of the tax period corresponding to Corporation tax must be paid.
Finally, following recommendations of the OECD/BEPS’ project, taking effect from 1 July 2016, the calculation method of the reduction of income from certain intangible assets, a tax incentive regime internationally known as patent box, has been modified, as we explained in detail in our publication regarding the 2016 General State Budget Bill.
Personal Income Tax
With effect from 1 January 2016, the limit of exempt income earned in kind rises from EUR 500 to EUR 1,500 in the case of premiums or contributions paid to the insurance companies for the employee’s healthcare coverage, and that of their spouse or descendant, when the person covered by the insurance policy has a disability.
Moreover, in order to determine the net return by direct estimate, from 1 January 2016, the maximum limit of the deductible expenses for health insurance premiums paid to insurance companies rises to EUR 1,500, when the person who has the coverage is a disabled person.
Finally, on a temporary basis for the fiscal years 2016 and 2017, the limits for the exclusion of the application of the objective assessment method have been modified, i.e. establishing the threshold figure for the income obtained by the totality of the economic activities during the previous year at EUR 250,000, amongst others.
Net Worth Tax
The obligation to pay the net worth tax is further extended to the fiscal year 2016 and the 100% tax relief on the full tax payable postponed until 1 January 2017.
New coefficients to be applied to the cadastral value have been established for 2016. In some cases, some of them are slightly lower than those in force on 31 December 2015. These coefficients are established according to the year of entry into force of the cadastral values which derive from a collective appraisal procedure.
Value Added Tax
With effect from 1 January 2015, the services provided to forwarding and shipping agents acting on behalf of exporters, the recipient of the goods or customs representatives, are also included in the scope of the exemptions planned for the services directly related to exports.
Additionally, from 1 January 2016 an exemption is established for imported goods subject to warehousing other than customs warehousing allocated to duty-free shops in ports and airports under customs supervision. The provision of services directly related to this type of imports is also exempt as from this date.
On a temporary basis for the fiscal years 2016 and 2017, and as commented above in connection with the application of the Personal Income Tax objective assessment method, the limits that determine the exclusion of the simplified special regimes and agriculture, livestock and fishing regimes are increased to EUR 250,000.
Finally, with effect from 1 January 2016, some general partnerships will gain the status of taxpayers for Corporate Income Tax and, therefore, the application of the equivalence surcharge regime will cease to apply to them. Thus, they will be able to deduct the fee resulting from the application to the purchase value of inventoried stock on the termination date of this regime, excluding VAT and the equivalence surcharge, the rates of said tax and surcharge that were in force on the same date. Moreover, these taxpayers must make an inventory of their stocks with reference to the start and end dates of the implementation of the equivalence surcharge regime.
The legal interest rate is set at 3% in 2016 (3.5% in 2015) and the late payment interest at 3.75% (4.375%).
Finally, the Public Indicator of Multiple Effects’ Income (IPREM), which is a reference index for calculating the income threshold for subsidies, grants, benefits and legal aids, remains the same as the last financial year:
- IPREM/day, EUR 17.75
- IPREM/month, EUR 532.51
- IPREM/year, EUR 6,390.13