The 2021 Income campaign, which starts on April 6, has as one of its main novelties the change of sections of the tax. They become six instead of five, by including a new marginal tax rate of 47% for income of more than 300,000 euros. Now, these are the changes that affect the state part of the tax, which is paid by all residents in Spain. But, facing the Income statement 2021, some taxpayers will notice changes in the regional section of the tax. Specifically they are Andalusia, Valencian Community Y Region of Murcia those that have introduced changes in the regional income tax scale.
The Personal Income Tax (IRPF) is state-owned, however, 50% of its collection is assigned to the autonomous communities. Thus, each region can add or remove sections in the IRPF. Navarra and Euskadi have their own regional regime and therefore do not have a regional section.
For the 2021 financial year, while the Region of Murcia has reduced the rates applicable to all sections and Andalusia has cut them for tax bases from 28,000 euros, the Valencian Community has raised them for very high incomes (above the 140,000 euros of tax base). In the rest of the communities, the tables remain unchanged. Of course, Catalonia, Galicia, Madrid, Andalusia and the Region of Murcia have announced changes for the 2022 declaration that, in general, imply tax reductions, and that will have an effect on the 2022 declaration that will be presented in 2023.
In Andalusia, the regional tax scale applicable to the general income tax base was modified, reducing the corresponding rate from the fourth section. Specifically, the first three tranches remain at 9.50%, 12% and 15% and there are reductions of between 20 and 30 basis points in the following tranches. For 2021, the maximum rate is 23.70% (instead of the previous 24.30%) and will continue to be progressively reduced until it is established at 22.50% next year.
– In the fourth section up to 28,000 euros, the tax goes from 15.90% to 15,60%.
– In the fifth tranche up to 35,000 euros, it is reduced from 18.80% to 18,70%.
– In the sixth tranche up to 50,000 euros, it drops from 19.10% to 18,90%.
– In the seventh tranche up to 60,000 euros, it falls from 23.10% to 22,90%.
– In the eighth tranche above 60,000 euros, it is cut from 24.30% to 23,70%.
Thus, the regional rate for 2021 for taxpayers with tax residence in Andalusia is as follows:
The Valencian Community adds two new sections at the top of the regional scale of the tax with effect from January 1, 2021, both for the highest incomes.
Specifically, the rate applicable to the general payable base is increased by two points from 140,000 euros, which will be 27.50%, and at two additional points, at 29.50%, from 175,000 euros. Last year the maximum margin was 25.5% from 120,000 euros, a rate that is maintained for income from 120,000 to 140,000 euros. The rest of the sections do not register changes.
Thus, the regional scale applicable to the general taxable base in the 2021 financial year would be as follows:
REGION OF MURCIA
The Region of Murcia reduces the rate applicable to all sections of the liquidable base. It regulates a scale of five tranches, with a minimum marginal rate of 9.70% (instead of the previous 9.80%) and a maximum of 22.90% (instead of 23.10%).
In the 2021 tax period, the table looks like this:
– From zero to 12,450 euros, the tax drops to 9,70% from 9.80%.
– From 12,450 euros to 20,200 euros, the rate drops to 11,72% from 11.98%.
– From 20,200 euros to 34,000 euros is passed to 14,18% from 14.62%.
– From 34,000 euros to 60,000 euros falls to 18,54% from 18.86%.
– From 60,000 euros onwards it is cut to 22,90% from 23.10%.
REST OF COMMUNITIES
Madrid: scale of five tranches, with a minimum marginal rate of 9% and a maximum of 21%.
Castilla la Mancha: scale of five tranches, with a minimum marginal rate of 9.5% and a maximum of 22.5%.
Catalonia: scale of seven tranches, with a minimum marginal rate of 12% and a maximum of 25.5%.
Principality of Asturias: scale of eight tranches, with a minimum marginal rate of 10% and a maximum of 25.5%
Cantabria: seven-tranche scale, with a minimum marginal rate of 9.5% and a maximum of 25.5%.
Aragon: regulates a scale of ten tranches, with a minimum marginal rate of 10% and a maximum of 25%
Estremadura: nine-tranche scale, with a minimum marginal rate of 9.5% and a maximum of 25%.
Galicia: seven tranches, with a minimum marginal rate of 9.5% and a maximum of 22.5%.
The Rioja: scale of seven tranches, with a minimum marginal rate of 9% and a maximum of 27%.
Canary Islands: scale of seven tranches, with a minimum marginal rate of 9% and a maximum of 26%
Balearic islands: nine-tranche scale, with a minimum marginal rate of 9.5% and a maximum of 25%.
Castile and Leon: scale of five tranches, with a minimum marginal rate of 9.5% and a maximum of 21.5%.
In addition, in the General State Budgets for the year 2021 a sixth tranche was introduced in the state scale with a tax rate of 47% for income over 300,000 euros.
Year 2022 to declare in 2023
2022 promises to be more active in relation to the changes in the autonomous tax scales of IRPF. Ricardo García-Borregón Tenreiro, a lawyer from the Ashurst Tax Law Department, points out that “while communities such as Andalusia, Galicia or Madrid have already approved reductions in the regional scale of personal income tax in force since January 1, 2022, Catalonia has raised it in some sections, remaining the community with the highest regional rate at the state level (25.50% in the upper section), five points above that applicable in Madrid, thus increasing the differences between territories”.
In the case of Andalusia, the final scale scheduled for 2023 advances its entry into force to 2022. The sections are cut from eight to five and the rates are between a minimum of 9.50% and a maximum of 22.50%.
– From zero to 12,450 euros: 9.50%.
– From 12,450 euros to 20,200 euros: 12%.
– From 20,200 euros to 35,200 euros: 15% (previously up to 28,000 euros).
– From 35,200 euros to 60,000 euros: 18% (previously there were three sections from 15.60% to 22.90%).
– From 60,000 euros onwards: 22.50%. (before 22.90% and the last section of 120,000 euros disappears from now on at 23.70%).
In the Madrid’s community, the new scale that will apply to all tax periods beginning on or after January 1, 2022 reduces each bracket by 0.5 percentage points.
– From zero to 12,450 euros: 8.50% (previously 9%).
– From 12,450 euros to 17,707.20 euros: 10.70% (previously 11.20%).
– From 17,707.20 euros to 33,007.20 euros: 12.80% (before 13.30%).
– From 33,007.20 euros to 53,407.20 euros: 17.40% (before 17.90%).
– From 53,407.20 euros onwards: 20.50% (previously 21%).
In Catalonia, the new personal income tax scheme tries to benefit the lowest incomes, which will see their taxation reduced by 1.5 points, while the intermediate ones will see it increased by 0.7 points on average. A new first leg is created and the second leg is split into two.
– New first tranche from zero to 12,450 euros: 10.50% (before the first tranche reached 17,707.20 euros and was taxed at 12%).
– Between 12,450 euros and 17,707.20 euros, the rate will be 12%.
– From 17,707.20 euros to 21,000 euros: 14% (before the second tranche went from 17,707 to 33,007.20 euros with an associated rate of 14%).
– From 21,000 euros to 33,007.20 euros: 15% (before 14%).
– From 33,007.20 euros to 53,407.20 euros: 18.80% (before 18.50%).
– From 53,407.20 euros to 90,000 euros: 21.50% (remains the same).
– From 90,000 euros to 120,000 euros: 23.50% (remains the same).
– From 120,000 euros to 175,000 euros: 24.50% (remains the same).
– From 175,000 euros onwards: 25.50% (remains the same).
In Galicia, the table is modified as of January 1, 2022 for 90% of taxpayers. The sections of the regional scale applicable to the general taxable base are reduced from seven to five and the percentages of taxation are reduced in all the sections, with the exception of the one corresponding to the last section (from 60,000 euros) which remains at 22 ,fifty%. Thus, the marginal application rates will range between 9.40% and 22.50%, compared to the current 9.50% and 22.50%.
– From zero to 12,450.0 euros: 9.40% (previously 9.50%).
– From 12,450 euros to 20,200 euros: 11.65% (before 11.75%)
– From 20,200 euros to 35,200 euros: 14.90% (before between 20,200 euros and 27,000 euros, 15.50% was paid and from 27,000 euros to 35,200 euros, 17% was taxed).
– From 35,200 euros to 60,000 euros: 18.40% (before from 35,200 euros to 47,600 euros, 18.50% was charged and from 47,600 euros to 60,000 euros, 20.5%).
– From 60,000 euros onwards: 22.50% (remains the same).
In the Region of Murcia, for the 2022 tax period, the tax rates are reduced again in all brackets.
– From zero to 12,450 euros, 9.60% will be paid (previously 9.70%).
– From 12,450 euros to 20,200 euros: 11.46% (previously 11.72%).
– From 20,200 euros to 34,000 euros: 13.74% (previously 14.18%).
– From 34,000 euros to 60,000 euros: 18.22% (before 18.54%).
– From 60,000 euros onwards: 22.70% (previously 22.90%).