Tax Updates 2024

For 2024, no major tax changes are expected either. However, as several measures are still awaiting final government approval, we have put together a brief summary of what we consider the most significant changes — those that will have the most direct impact on all taxpayers:

• the mandatory introduction of electronic invoicing,
• the VAT exemption scheme for self-employed workers
• global minimum taxation for large taxpayers.

Already approved and in force, we have:

• Order HFP/886/2023 of 26 July has formally approved Form 721: once the applicable thresholds are met, cryptocurrencies held abroad must be declared from 2024 onwards. The order also introduces Form 172 (an informational return on virtual currency balances) and Form 173 (an informational return on transactions involving virtual currencies), which must be filed by individuals and entities resident in Spain that provide services to safeguard private cryptographic keys on behalf of third parties, for the purpose of holding, storing and transferring virtual currencies.
• Act 12/2023 of 24 May on the right to housing reduces the Personal Income Tax (IRPF) deduction on net rental income from 60% to 50% as of 2024. In practical terms, the property owner will be able to deduct up to 50% of the difference between rental income and associated expenses.
  This 50% deduction applies only to rental agreements entered into from 1 January 2024 onwards; contracts signed before 31 December 2023 retain the 60% deduction.
  The deduction may be increased to up to 90% where new residential tenancy agreements are entered into in designated stressed residential market areas, provided the new rent represents a reduction of at least 5% compared to the previous contract.
  A 60% deduction may also be applied where the property has been refurbished within the two years preceding the commencement of the tenancy.

At corporate level, a new tax rate is being introduced for Corporate Income Tax: a reduced rate of 23%. This rate will apply to entities with a turnover of less than one million euros.

With regard to VAT, the Government has confirmed that it will extend — currently only until June 2024 — the reduced VAT rate on food, and will progressively phase out the VAT reduction on electricity.

We hope you find this information useful.

If you require any tax or accounting assistance, please do not hesitate to contact us: