How does Covid-19 affect income tax returns is a frequent question these days. The Tax Agency campaign is already underway. Here is a guide to the things you should keep in mind this year when submitting your draft to the Treasury:

Telecommuting 

Because of the health crisis, telecommuting or remote work is one of the most important factors for this fiscal year. Since the period of confinement, thousands of people started to work from home, even in an autonomous community other than where the company is located.

This possibility of living far away has tax effects. It is considered that the taxpayer resides in the autonomous community in which he has stayed the longest in the year, and that computation must be reflected in the tax return.

Foreigners in confinement 

If you are a foreigner and you have been in Spain for more than half a year, that is, 183 days, you have tax duties. All the days spent in the country are computed to determine whether a person must pay taxes in Spain, regardless of the confinement period declared by the state of alarm.

The ERTE 

People who do not obtain more than 22,000 € per year, are not obliged to present the tax return. However, the taxpayer must present it if it exceeds 14,000 € in incomes with more than one payer; and the output of the second or remaining payer exceeds 1,500 €.

This means that, if because of an ERTE the worker has received more than 1,500 € from the SEPE (as second payer), and the incomes exceeds 14,000 €, the tax return must be presented, even if it does not reach 22,000 €. It is important to note that filing the tax return does not always mean that the taxpayer must pay.

ERTE and maternity 

Whether the mother’s work contract has been suspended as a result of the ERTE, she will lose the right to the maternity deduction during the extent of the ERTE. The same does not happen in the event of a reduction in working hours, since the right to the benefit is not lost.

The rent 

As with companies and workers, tenants and landlords have reached multiple agreements regarding the payment of rent. Regarding the tax return, it must be considered that if there has been a negotiation in which the rental price is reduced, the amount to be declared by the landlord will be exceptionally agreed, because of the Covid.

If the delay of the rent is agreed, no return on the real estate capital will be reflected for the agreed months. In addition, both in the case of the reduction and the delay of the rent amount, the expenses maintained during the modification or the time that is postponed will be deductible.

What about the second residence? 

Not having been able to move to the second residence or vacation home due to confinement does not exempt the taxpayer from indicating the real estate income corresponding to the period in which it was not possible to benefit from them.

• What about the self-employed people and the Minimum Living Income?
• Is it better to present the income tax return at the beginning or at the end of the calendar?
• Do you have a large family and do not know how the benefits received this year because of Covid affect the tax return?

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This information does not constitute under any circumstances legal advice, serving only for informational purposes. In case you need professional services in Global Immigration and Mobility, please contact us.

* It should be taken into account that the regulations of any of the countries analyzed, as well as the established procedures, may change at any time and without prior notice.

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