Tax measures approved for the year 2020

It has been approved for the year 2020, the extension of the quantitative limits of invoicing and purchase of goods in the objective regime of the IRPF, as well as the simplified regime and the special regime of agriculture, livestock and fishing, in the VAT. The validity of the Wealth Tax is also extended.

Various tax measures are introduced for the year 2020

With the date of entry into force december 29, 2019, the Council of Ministers (in office) approved a Royal Decree-Law that includes the following measures in tax and cadastral matters:

1. Extensionfor the 2020 tax period of the quantitative limits of invoicing by modules in the Personal Income Tax.

In this way, self-employed workers cannot be taxed by the objective estimation method when all their activities exceed 250,000 euros or when the turnover to other entrepreneurs or professionals exceeds 125,000 euros.

In addition, freelancers who purchase goods and services up to 250,000 euros can be kept in the module system.

Similar to the aforementioned measure, the limits for the application of the simplified regime and the special regime for agriculture, livestock and fishing, in the Value Added Tax,are extended for the 2020 tax period.

The deadline for submitting waivers or revocations to the aforementioned methods and special regimes is one month from December 29, 2019.

2. Extension of the Wealth Tax for the year 2020.

3. During 2020, priority patronage activities are considered those listed in the Budget Law for 2018. The percentages and limits of the deductions provided for in Law 49/2002 art.19 – 21 are raised by five percentage points.

4. Update of the cadastral values of urban real estate for 2020 for the municipalities included in the OM HAC/1257/2019. The update coefficients are fixed according to the following table:

Year of entry into force presentation of values	Update coefficient
1984, 1985, 1986, 1987 and 1988.	1,05
1989, 1990, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002 and 2003.	1,03
2011, 2012 and 2013.	0,97

The rules for the application of the aforementioned coefficients are as follows:

a) In the case of real estate valued according to the data in the Real Estate Cadastre, it is applied to the value assigned to said assets for 2019.

b) In the case of cadastral values notified in the year 2019,obtained from the application of Presentations of partial values approved in the aforementioned year, it is applied on said values.

c) In the case of immovable property that has undergone alterations of its characteristics according to the data contained in the Real Estate Cadastre, without these variations having been effective, the coefficient is applied on the value assigned to such properties, by virtue of the new circumstances, by the General Directorate of the Cadastre, with application of the modules that would have served as the basis for the fixing of the cadastral values of the rest of the real estate of the municipality.

5. Until the royal decree of the minimum interprofessional wage for the year 2020 is approved, it remains in the one set for 2019.

Minimum daily wage: 30,00€
Minimum monthly salary: 900,00€
Annual Minimum Wage: 12.600,00€ (14 payments)
SMI Domestic Employees: 7,04€ per hour
Temporary and temporary SMI: 42,62€ per day

Amendments to the LIVA (ValueAdded Tax Law)

Next, we point out the change that has occurred in this law, effective as of January 1, 2020:

Thirteenth transitional provision. Limits for the application of the simplified regime and the special regime for agriculture, livestock and fisheries in the years 2016, 2017, 2018 , 2019 and 2020.

For the years 2016, 2017, 2018, 2019

and 2020;
the magnitude of 150,000 euros referred to in the first indent of number 2 and number 3 of paragraph two of article 122, and number 6 of paragraph 2 of article 124 of this Law, is set at 250,000 euros.

Modifications in the IP (Wealth Tax)

Royal Decree/Law 13/2011 is amended as follows, as of 1 January 2020:

Single article

(…)
Second. With effect from January 1, 2021 , the following amendments are introduced in Law 19/1991, of 6 June, on Wealth Tax:
Article 33. General bonus of the full quota.
On the full amount of the tax, a 100 per cent bonus will be applied to taxable persons for personal or actual obligation to contribute. ”
Two. Articles 6, 36, 37 and 38 are repealed.

Modifications in the LIRPF (Law on Personal Income Tax)

Law 35/2006 is amended with the wording in force as of January 1, 2020 as follows:

Thirty-second transitionalprovision.

Limitsfor the application of the objective estimation method in the years 2016, 2017, 2018,

2019 and 2020.

For the years 2016, 2017, 2018, 2019 and 2020

, the figures of 150,000 and 75,000 euros referred to in the paragraph (a) of point (a) b) of the 3rd rule of section 1 of article 31 of this Law, are fixed at 250,000 and 125,000 euros, respectively.
Likewise, for these years, the magnitude of 150,000 euros referred to in letter c) of the 3rd rule of section 1 of article 31 of this Law, is set at 250,000 euros.