The Government is not considering the abolition of the tax reduction for joint taxation in the income statement, nor does this measure appear in the component dedicated to the tax reforms of the Recovery, Transformation and Resilience Plan that has been sent to Brussels, they have confirmed sources of the Ministry of Finance.
As they have explained, what appears in Annex IV of the Recovery Plan is that, according to the study carried out by the Independent Authority for Fiscal Responsibility (AIReF) in July 2020, it was concluded that this reduction, in its current configuration, it generated a “disincentive to the labor participation of the second income earners (mainly women with low incomes), which accentuates the problems of the gender gap in the Spanish economy”.
They have added that, likewise, AIReF proposed “to accelerate its gradual disappearance by establishing a transitional regime.”
Based on the foregoing, they have ensured that what the Executive will do is evaluate the institution’s recommendations and analyze the effectiveness and efficiency of the current tax incentives, as expressly indicated in the section dedicated to tax reforms of the Recovery Plan. .
To do this, they have indicated that a group of experts has also been created that will issue its report in February 2022 and that it will be at that time when it will consider what fiscal measures are most appropriate to adapt the tax system to the 21st century and boost growth. and job creation.
Therefore, they have emphasized that the only thing the Government is going to study, with the technical advice of experts, is how to prevent this tax reduction from accentuating the existing gender gap in the labor market. All this, without, in any case, this possible tax reform going to mean an increase in the tax burden on families.
Two million households
This measure benefits two million households and its cost amounts, according to the latest General State Budgets (PGE), to about 1,000 million euros a year.
Last year the Tax Authority (Airef) prepared a report on the tax benefits of the Spanish tax system in which it precisely reviewed the advantages and disadvantages of this reduction in personal income tax.
And it estimates that the cost to the public coffers of this initiative amounts to 2,293 million, and the beneficiaries are 4.2 million people, 2.1 million households , 18% of taxpayers and 17% of families. The agency maintains that the tax benefit is distributed evenly and does not alter inequality.
Up to 3,400 euros of deduction
Currently, the reduction by joint taxation of personal income tax depends on the type of family unit in question.
In the case of joint returns of family units made up of both spouses not legally separated and, if any, minor children living together, as well as legally disabled adults subject to extended or rehabilitated parental authority, the tax base will be reduced by 3,400 euros per year.
In joint declarations of single-parent family units , that is, those formed, in cases of legal separation or when there is no marriage bond, by the father or the mother and all the minor or adult children legally incapacitated subject to extended parental authority or rehabilitated living with one or the other, the tax base will be reduced by 2,150 euros per year.
In this case, this reduction will not be applied when the taxpayer lives with the father or mother of any of the children who are part of their family unit. And the reduction that comes from those mentioned will be applied, first, to the general tax base, without it being negative as a consequence of such reduction. The remainder, if any, will reduce the tax base of the savings, which may not be negative either.
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