RD 142/2024 on tax withholdings and payments on account in 10 key points.

BOE no. 33 of 7 February 202 published Royal Decree 142/2024, of 6 February, amending the Personal Income Tax Regulations, approved by Royal Decree 439/2007, of 30 March, on withholdings and payments on account, from which the following key points are summarised for information purposes only:

  1. Decree Objective: The aim is to amend the Personal Income Tax Regulations, particularly regarding withholdings and payments on account, to align them with the current economic reality.
  2. Background: The update is warranted by the recent increase in the minimum wage, aiming to ensure that withholdings more accurately reflect taxpayers’ real incomes.
  3. Main Modifications: Withholding thresholds are adjusted to reflect the minimum wage increase, aiming to relieve the tax burden on lower-income workers.
  4. Work Income: New exemption amounts for withholdings are established, taking into account various personal and family situations, to offer a more equitable tax treatment.
  5. Updated Amounts: Updated income thresholds are introduced for determining the application of withholdings, seeking greater accuracy in their calculation.
  6. Transitional Provisions: Rules for calculating withholdings applicable during the 2024 tax period are specified, allowing a smooth transition to the new rules.
  7. Impact on Taxpayers: The measure directly impacts taxpayers, especially those receiving wages, pensions, and unemployment benefits, aiming to adjust withholdings to their real economic situation.
  8. Legal Procedure: Compliance with current legal regulations is ensured, respecting the principles of legality and proper administration.
  9. Effective Date: The regulation becomes effective immediately upon its publication in the BOE, applying from the start of the tax period in which it is published, to ensure its effectiveness.
  10. Purpose: The decree ultimately aims to reduce administrative burdens for taxpayers and tax obligors, as well as to adapt the withholding system to the current economic circumstances of taxpayers, promoting tax equity.

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