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Once again, the tax return filing season is upon us, and Assessorament i Consell is dedicating this edition to explaining the most important points to bear in mind when completing your annual tax return. Within the scope of employment advice, we examine the income derived from work that must be taken into account.
per diems:
per diems and allowances for travel, subsistence and accommodation expenses paid by the company to the employee are exempt from tax, provided that expenses are substantiated by invoice or receipt where the employee uses public transport, and that the reality of the journey is evidenced where private transport is used.
Mileage must be calculated at €0.17 per kilometre. The tax-exempt limit for overnight accommodation and daily subsistence is €52.29 within Spain and €91.35 abroad. Where no overnight stay is involved, daily subsistence allowances are €26.14 within Spain and €48.08 abroad.
BENEFITS IN KIND:
Tax liability also arises on any benefit received by the employee consisting of the use, consumption or acquisition of goods, rights or services for personal purposes, either free of charge or at below-market value, even where no actual cost is incurred by the party granting them. The main categories of benefit in kind are as follows:
1) Housing: This is taxable regardless of whether the property is rented or owned by the company:
· Valued at 10% of the cadastral value (discussed in the previous article)
· 5% of the revised or updated cadastral value that came into force on or after 01/01/1994.
· 5% of 50% of the property's value for Wealth Tax purposes, in cases where no cadastral value has been assigned or where it had not been notified to the titleholder as at the tax accrual date.
The benefit in kind is capped at 10% of the remaining employment remuneration.
2) Use of motor vehicles: Where the vehicle is owned by the company, it is valued at 20% of the total acquisition cost. Where it is owned by a third party (under a leasing, renting or similar arrangement), the value is 20% per annum of the market value the vehicle would have if new.
3) Transfer of ownership of motor vehicles: Where the vehicle has not previously been used by the employee, it is valued at the acquisition cost to the employer, including taxes. Where it has been previously used, the value is determined by taking into account the depreciation resulting from prior use.
4. Loans: Where loans are granted at an interest rate below the statutory rate, the benefit is valued at the difference between the interest actually paid and the statutory interest rate applicable during the relevant period.
5. Benefits in kind covering meals, accommodation, travel and similar items not exempt from tax: valued at the cost to the payer, including any taxes paid by the payer.
6. Premiums or contributions paid by the company by virtue of insurance contracts or similar arrangements not exempt from tax: valued at the cost to the payer, including any taxes paid by the payer.
7. Contributions made by sponsoring employers to Pension Plans: valued at the amount paid by the sponsoring employer.
8. Study and maintenance expenses for the taxpayer or relatives up to and including the fourth degree of kinship (including those related by affinity), not exempt from tax: valued at the cost to the payer, including any taxes applicable to the transaction.
9. Transfer of shares or equity interests in a company or group company to employees, whether free of charge or at below-market price, not exempt from tax: valued at their normal market value.
10. Supply of products at reduced prices through company canteens, staff restaurants or social cooperatives, including meal vouchers or restaurant tickets, not exempt from tax: valued at their normal market value.
