The Personal Income Tax campaign for the 2022 fiscal year began on 11 April 2023, with a deadline of 30 June for returns with a result payable by direct debit. The AEAT introduced improvements to the Renta Web draft and expanded online consultation and management options.
Key Changes for 2022
Employment Income: The general reduction for employment income was broadened, particularly benefiting taxpayers with low and middle incomes. The reduction limit applicable to taxpayers with net employment income below 19,747.50 euros was increased. This measure, introduced through the 2022 General State Budget, represented an effective tax reduction for salaried workers with moderate earnings.
Capital Gains: Transfers of properties acquired before 1994 continued to benefit from reduction coefficients up to the limit of 400,000 euros in transfer price, with full application of the 2015 reform that introduced this cumulative cap.
Cryptocurrency Taxation: The AEAT incorporated specific sections in the draft to declare gains and losses from cryptocurrency transactions, in anticipation of specific forms to be introduced in subsequent years (Modelo 721 from 2023).
Energy Efficiency Deductions: Royal Decree-Law 19/2021 introduced three tiers of deduction for energy improvement works on primary residences or rental properties: 20% on amounts paid for works that reduce heating and cooling consumption by at least 7%; 40% for works that reduce non-renewable primary energy consumption by at least 30%; and 60% for energy rehabilitation of buildings. Maximum deduction bases ranged between 5,000 and 15,000 euros depending on the type of work.
Filing Recommendations
Before filing, it is advisable to compare the draft result with your own calculation, especially if there have been property transfers, fund redemptions or inheritance receipts. Regional deductions — which vary considerably between autonomous communities — can make significant differences to the final result.
Regional Deductions: an underused opportunity
Regional deductions are one of the least-exploited aspects of Spanish income tax, despite the fact that they can yield meaningful savings in many cases. Each autonomous community has powers to set its own deductions against the regional portion of IRPF, which represents approximately 50% of total tax. The most common include:
Birth and adoption: Many communities offer deductions for the birth or adoption of children, with amounts ranging from 300 to 600 euros per child depending on the number of children and income level.
Primary residence rental: Although the national rental deduction was abolished for contracts signed after 2014, many communities (Madrid, Catalonia, Andalusia and others) maintain their own regional deductions for young people, large families or people with disabilities.
Investment in new businesses: Some communities, such as Madrid, allow a percentage of amounts invested in shares or participations of newly-formed companies to be deducted.
Donations: In addition to the national deduction of 80% on the first 150 euros and 35% on the excess (with improvements for regular donors), several communities add further deductions for donations to regional foundations.
Common mistakes in the income tax campaign
Experience from reviewing tax returns reveals recurring error patterns:
Incorrect reporting of property rental income: The AEAT draft often fails to correctly reflect rental income or associated deductible expenses (mortgage interest, insurance, council tax, community charges, repairs). A detailed review can result in a settlement significantly different from the draft.
Investment funds: Partial redemptions of investment funds generate capital gains or losses that the AEAT calculates using information provided by fund managers, but which should be verified — particularly where transfers between funds or subscriptions with different financial institutions have occurred.
Self-employment income: Taxpayers carrying on business activities under the direct estimation method should review with particular care the allocation of deductible expenses, asset depreciation and the correct integration of quarterly advance payments (Modelo 130) into the final settlement.
Pension plan contributions: Contributions made during 2022 to personal pension plans and to a spouse’s plan (up to a 1,000-euro limit in the latter case) reduce the general taxable base, but the draft does not always correctly incorporate them if contributions were made to institutions other than the payroll provider.
Special transactions: property and inheritances
Capital gains from property transfers merit a specific analysis. The transfer value for IRPF purposes is the effective sale price or the cadastral reference value published by the Cadastral Registry — whichever is higher. Since 2022, Law 11/2021 has introduced the reference value as the minimum taxable base in Transfer Tax and Inheritance and Gift Tax, with implications for IRPF capital gain calculations when the declared price falls below it.
For inheritances and gifts, the acquisition value for calculating future capital gains in IRPF is the value declared in the Inheritance and Gift Tax return, provided it does not exceed market value. Correctly documenting the acquisition value at the time of receiving the inheritance is essential for accurately calculating the capital gain when the inherited asset is subsequently sold.
At BMC we offer personalised review of the draft and assistance with filing the return. See our tax compliance services.
