Remember that next October ends the deadline to submit VAT, withholdings on account of Income and the fractional payment of Companies and Income, corresponding to the 3rd quarter of 2018.

In the month of October you must make the presentation of VAT, withholdings on account of Income and fractional payment of Companies (of the current year) and Income (in this case for entrepreneurs and professionals in direct and objective estimation).

In particular, the next day October 22 must be presented, and where appropriate proceed to the entry of the 3rd QUARTER 2018 corresponding to the VAT and al instalment payment of the Personal income tax in relation to business and professional activities, as well as to the income from withholdings on the rentals of business premises and on capital income.

In the case of companies,we also remember that on October 22 the deadline to submit the second installment payment of 2018 of Corporation Tax ends.

Those Companies that have the status of large company (with a volume of operations greater than 6,010,121.04 euros during the 12 months prior to the beginning of the tax period on account of which the fractional payments are made), must obligatorily present the form 202,regardless of whether they do not have to make any income in instalments.

This form 202 must be submitted electronically (even if consequently it was “zero quota”), always observing the maximum deadline for submission, which ends on October 22 (unless the payment is domiciled, in which case the deadline for submission ends on October 15).

Important note: calculation of withholdings on income from work that are satisfied or paid as of July 5, 2018

The General State Budget Law 2018 has introduced relevant modifications in relation to the calculation of the percentage of withholding and income on account to be practiced on the income from work that is satisfied or paid as of July 5, 2018.

Concretely:

  • New limits excluding the obligation to withhold, establishing higher amounts and differentiating the limits for the case of the group made up of social security pensioner taxpayers or passive classes or who perceive unemployment benefits or subsidies;
  • For the purposes of determining the withholding base, the amounts of the reduction for obtaining income from work regulated in article 20 of the Personal Income Tax Law for net income from work below 16,825 euros per year are modified upwards; and
  • Finally, it is increased from 50 to 60%, the reduction of the percentage of withholding or income on account on the income from work in the case of taxpayers residing in Ceuta or Melilla and who obtain there income from work that can benefit from the deduction for obtaining income in Ceuta and Melilla.

So, check if, due to these changes, you should regularize the income tax withholding that you are applying to your workforce.

When should this exceptional regularization be practiced?

The type of withholding or deposit on account, in these cases, will be regularized, if applicable, in the first income from work that is satisfied or paid from the entry into force of the LPGE 2018, that is, from July 5.

However, in respect of the workers concerned, the adjustment referred to in the preceding paragraph may be made, at the option of the payer, on the first income from work that is satisfied or paid from 1 August, in which case, the type of withholding or deposit on account to be practiced on the income from work paid prior to this date (that is, until July 31) will be determined taking into account the regulations in force on December 31, 2017.

 

Procedure for carrying out regularization

With respect to workers included in any of the situations indicated above, the regularization of the type of withholding will be carried out as follows, even if none of the relevant variables for this purpose have experienced variation:

  1. A new retention fee is calculated in accordance with the provisions of Article 85 of the Regulation, that is, in general:
    • First determining a new “basis for calculating the withholding rate” and applying the rates that result from applying the withholding scale of article 101.1 of the LIRPF.
    • The resulting amount will be reduced by the amount derived from applying to the amount of the “personal and family minimum to calculate the withholding rate” the previous scale, without the result of this reduction being negative.
  2. A new “withholding rate” will be calculated, multiplying by 100 the quotient obtained from dividing the new withholding fee by the total amount of the remuneration, (Art. 86 of the Regulation).
  3. This new withholding fee will be reduced in the amount of withholdings and income on account made between January 1 and on July 4 (or, as the case may be, and at the option of the payer, until July 31,when the regularization is carried out in the first yields that are paid from the August 1).
  4. The new applicable retention rate from July 5 (or from August 1, at the option of the payer) will be obtained by multiplying by 100 the quotient obtained from dividing the difference resulting from the previous section by the total amount of the remuneration remaining until the end of the year and will be expressed with two decimal places.

 

For this reason, it is convenient that you provide your trusted advisors with all the necessary documentation to be able to make the preparation and presentation of all these declarations.

 

If you have any questions about it, you can contact any of our advisors so we can help you solve it.