Among the different options offered by the current regulations to optimize the Personal Income Tax liabilities, we will focus on those relating to the integration and offsetting of income under the following scenarios:
November 2023 Tax Newsletter
Table of Contents
-
Editorial
-
2023 Personal Income Tax fiscal closing
-
New developments taxes assigned to autonomous communities
-
Measures Royal Decree-Law 5/2023
-
New Housing Act taxation
-
Family business tax benefits
-
Constitutional Court's ruling on the ISGF
November 2023
Within the scope of wealth tax, we ended the year with a tax that also stood out in the previous year: the Temporary Solidarity Tax on High Net Worth Individuals.
As you will remember, at the end of 2022 a tax was approved marked by its possible unconstitutionality, which led the autonomous communities of Madrid, Andalusia, Galicia and Murcia to file appeals against it. Taxpayers also filed appeals against the tax returns filed in July, with the corresponding request for reimbursement of undue taxes paid.
The appeal filed by the autonomous community of Madrid has been swiftly resolved by the Constitutional Court in its ruling of November 7, declaring the tax constitutional. In spite of the many assessments that can be made regarding this aspect, it could lead to court proceedings in the European Union.
We would also like to mention the amendments made in relation to the taxes transferred by certain autonomous communities since the last autonomous community elections to this day, which have led to new autonomous communities joining the "club" of those whose Inheritance and Gift Tax is subject to a reduction and some autonomous communities eliminating Wealth Tax.
Lastly, let's not forget that, given the dates we are in, it is time to identify those alternatives offered by current legislation that could contribute to improving the taxation of Personal Income Tax (IRPF).
In relation to these, as always, remember the importance of the rules for integrating and offsetting income, which could allow us to make the most of the losses generated during the financial year, whether or not they materialize, as well as those that we may have pending from previous financial years. However, within the scope of Wealth Tax and Solidarity Tax on High Net Worth Individuals, although certain actions could still be implemented to optimize their taxation, the fact is that they should have been identified at the beginning of the fiscal year so they could be implemented throughout the year.
Jesús Muñoz García
Director of Asset Planning
BBVA Private Banking
We are entering the final stretch of the year, a key moment to identify those optimization alternatives that could contribute to improving the taxation of IRPF, corresponding to the 2023 financial year.
The most relevant new developments include the following: the virtual exemption of Inheritance and Gift Tax in the Balearic Islands and the Canary Islands in transfers to relatives of the nearest degree and the elimination of Wealth Tax in Extremadura.
Royal Decree-Law 5/2023 incorporates two new deductions in IRPF, aimed at promoting the purchase of electric vehicles. It also includes a tax incentive in Corporation Tax to promote charging installations.
Act 12/2023, on the right to housing, incorporates tax changes of interest in terms of managing real estate assets, such as changes in the reduction applicable to capital gains or the authorization of City Halls to increase Property Tax (IBI) of empty homes.
Below, we will comment on a recent Decision by the Central Economic-Administrative Court and two Judgments of the Supreme Court in relation to applying tax benefits to donations of shares of family companies.
On November 7, the Constitutional Court issued a press release informing that the plenum of the Court had rejected the constitutional challenge filed by the Government of the Community of Madrid against the Solidarity Tax on High Net Worth Individuals.
Note:
The content in this section is provided for information purposes only and does not comprise tax or legal advice.