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Renta 2022-2023: Guide to tax innovations in your personal income tax return

The 2022-2023 income tax campaign is still underway and many taxpayers have not yet complied with their annual appointment with the Treasury. Thedeadline to file your Income Tax Return 2022 began last April 11 and will be extended until June 30. If you have to file your IRPF and you are not clear about the new features in the IRPF 2022, we have prepared a Guide to the new features in the IRPF that will be very useful for you.

Our recommendation is that you put yourself in the hands of professionals when filing your tax returns, especially if you have different sources of income or if you are not clear about which benefits you are eligible for. Consult our team of specialists in Tax in the Valencian Community.

Guide to tax innovations in Personal Income Tax 2022

Each income tax campaign usually brings new developments that are important to evaluate in order to avoid mistakes that may result in penalties and fines, but also to make the most of the tax policy of the State or the autonomous regions at any given time.

So that you can take advantage of all of them and avoid any possible failure, take note of what are the most important new features in the IRPF 2022:

Beware of interest on late payment: now they are taxed

The Supreme Court has changed its criteria regarding the taxation of late payment interest paid by the Tax Authorities in the event of a refund of undue income in favor of the taxpayer. If until a few months ago this income should not be included in the income tax return (precisely because it originated from an undue collection), now the High Court considers that it should be taxed and included in the general base, as a capital gain.

In addition, you will not be able to deduct the lawyer’s or attorney’s fees necessary in the process for which these amounts are returned to you in the form of interest.

This criterion, detrimental to the taxpayer, is extrapolated to any payment of interest by any Public Administration: be careful because, as we have seen in the daily practice of our office, if the interest comes from an administration other than the Tax Agency, it will not appear in the tax data.

  • Virtual currencies: impossible requirements

The duty to taxation of gains and losses related to the purchase and sale of virtual currencies in the savings tax base was one of the great tax innovations in the area of Personal Income Tax in recent years and, as a result of this novelty, we have an increasing number of binding consultations resolved by the Directorate General of Taxes (DGT) that help us to outline its taxation.

In them we are instructed to declare all the movements made, that is, all purchases and sales and all the movements carried out. In addition, we must indicate both the purchase value and the sale value, all in euros and at the time the transaction takes place, since this type of securities fluctuates very quickly.

These movements must be included even if the money has not been withdrawn from the virtual wallet, since it is considered to be part of the taxpayer’s assets.

This obligation can be difficult to comply with, since not all platforms provide data on each of the movements made. In practice, it becomes practically impossible to obtain all this documentation.

Also, new in 2023, please note that you will have to distinguish between the types of virtual currency you have.

To make things easier, the Tax Agency is working on obtaining information from all platforms that allow trading with virtual currencies, so that, once they have the data, they can make the appropriate requirements.

Capital gains and losses: use of benchmark value

The year 2022 is the first year in which we must consider how to use the valuation of real estate based on the famous ‘reference value’ for personal income tax purposes. This value is determined by the General Directorate of Cadastre as a result of the analysis of the prices of all real estate sales and purchases made before a notary, and as of January 1, 2022, it constitutes the taxable base for taxes such as the Transfer Tax (ITP) or the Inheritance and Gift Tax (ISD).

We already have a criterion on how to use the cadastral reference value for income tax purposes but, as is always the case in tax matters, we must be aware of possible changes in criteria.

We explain the keys for this year’s income tax return:

  • We will use the reference value whenever the transfer of a property is for profit (i.e., without economic consideration or free of charge), since the rules of the Inheritance and Gift Tax apply.
  • However, when the transfer is for valuable consideration (i.e., with economic consideration), we will not use the reference value to assess the capital gain or loss in that transfer.

The current criterion is that the reference value is not a value verified by the Administration, so the Tax Agency cannot consider it as a market value.

However, we will have to be on the lookout for future changes in criteria. And why do we insist on this? Because the Supreme Court has already indicated that there must be unicity of values between public administrations. In other words, all administrations must use the same criteria for property valuation, ensuring legal certainty for citizens.

Therefore, this criterion that applies to the 2022 income taxbreaks with the reasoning of the Supreme Court, so we will be waiting to see how this mess is resolved.

Deduction for maternity: also applicable in case of ERTE or termination of activity.

Another new feature for the 2022 Income Tax is that you will be able to claim the full maternity deduction even if part of the year you have been in a situation of ERTE or cessation of activity.

This criterion is also applied retroactively: if you did not add it in the 2020 or 2021 income tax return, you can add it in the 2022 income tax return without the need to make a corrective income tax return for the corresponding year.

In principle, this information should appear in your tax data, but if it does not, do not forget that it is part of your tax rights.

Delayed retirement: now with tax benefits

In addition to the above novelties, in fiscal year 2022 a 30 percent reduction is applied to what is collected for delaying the retirement pension, both when it is collected as capital and when it is collected little by little.

Contributions to mutual funds between January 1, 1967 and December 31, 1978: tax benefits

A new Supreme Court ruling indicates that the part of the pension corresponding to contributions to the mutual fund made between 1967 and 1978 has a 25 percent exemption. Thanks to this ruling, it is also possible to request corrective tax returns for years for which the tax statute of limitations has not expired (i.e. up to four years ago) .

If you are a pensioner and you are affected by this new ruling, we offer advice on how to proceed.

Private pension plans: new ceilings for deductions

Another important new feature of the Personal Income Tax for 2022 consists of the changes in the ceilings relating to deductions for contributions to private pension plans . Individual contributions with the right to deduction go to a maximum of 1,500 euros per year, as opposed to the previous 2,000 euros. In the case of maximum contributions to company plans, it increases from 8,000 to 8,500 euros per year.

News in the Valencian Community: new minimums

In the case of taxpayers in the Valencian Community, for the 2022 tax year, the exempt minimum per taxpayer has been regulated for the first time, as well as the minimums for descendants, ascendants or disability (personal and family minimum).

Specifically, the personal and family exemption minimum is raised, increasing by 10 percent, the legal maximum allowed, from 5,550 euros to 6,105 euros in the general rate. A 10 percent increase is also applied to the minimum exemptions for those over 65 and 75 years of age, the disabled, children or ascendants.

In addition, in 2022, a new personal income tax rate will be applied in the regional bracket, more beneficial for taxpayers whose taxable income does not exceed 60,000 euros.

Another specific measure for the Valencian Community consists of raising the deductions, as a general rule, by 10 percent, as well as the limits for taking advantage of them (from 25,000 to 30,000 euros of taxable income in individual taxation, and from 40,000 to 47,000 in joint taxation, including unmarried couples living together).

The objective of these measures is to reduce the burden of inflation borne by lower incomes.

If you need help in your Renta 2022 tax return or when complying with any other tax obligation, contact our team of specialists in Tax Law in the Valencian Community.We will help you to comply with the regulations and to take advantage of the range of tax benefits available to you.