The Government will eliminate the tax reduction for the taxation of personal income tax jointly in the income statement. The measure, which aims to encourage the incorporation of women into work, is included in the Recovery, Transformation and Resilience Plan sent to Brussels, as reported by El País.
This reduction benefits two million households and its cost amounts, according to the latest General State Budgets (PGE), to about 1,000 million euros a year. Last year the Tax Authority (Airef) prepared a report on the tax benefits of the Spanish tax system in which it reviewed the advantages and disadvantages of reducing joint taxation in personal income tax. It was calculated that the cost to the public coffers of this initiative amounts to 2,293 million, and the beneficiaries are 4.2 million people, 2.1 million households, 18% of taxpayers and 17% of families. The organism maintains that the fiscal benefit is distributed in a homogeneous way and does not alter the inequality.
"The gradual disappearance of the reduction by joint taxation through the establishment of a transitory regime is included, because it generates a disincentive to the labor participation of the second income earner (mainly women)", indicates the document. As defended by the Plan, in an analysis of gender equality aspects, "a modern tax system should not serve exclusively to procure income that finances public spending, but should directly contribute to enhancing the impact of public policies, serving as catalyst to achieve transformations in areas such as gender equality, attention to disability, conservation of the environment or protection of health ". "There is considerable consensus that this measure discourages the entry of women into the labor market," indicates the Ministry of Finance.
Up to 3,400 euros of deduction
Currently, the reduction by joint taxation of personal income tax depends on the type of family unit in question. In the case of joint returns of family units made up of both spouses not legally separated and, if any, minor children living together, as well as legally disabled adults subject to extended or rehabilitated parental authority, the tax base will be reduced by 3,400 euros per year.
In joint declarations of single-parent family units, that is, those formed, in cases of legal separation or when there is no marriage bond, by the father or the mother and all the minor or adult children legally incapacitated subject to extended parental authority or rehabilitated living with one or the other, the tax base will be reduced by 2,150 euros per year.
In this case, this reduction will not be applied when the taxpayer lives with the father or mother of any of the children who are part of their family unit. And the reduction that comes from those mentioned will be applied, first, to the general tax base, without it being negative as a consequence of such reduction. The remainder, if any, will reduce the tax base of the savings, which may not be negative either.