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A woman with a surprised expression and a hand holding a 200 euro bill in front of a government entity logo.
The tax office has given many a big disappointment | Camara Europa Press, Dean Drobot, Getty Images de Vaksmanv, en.e-noticies.cat
ECONOMY

Hacienda's Blow to Thousands of Spaniards: They Didn't Expect It and Will Have to Pay a Fortune

Those taxpayers with certain annual incomes have been greatly disappointed regarding the IRPF declaration.

by

Miguel Cuartas Ortego

The upcoming Income Tax Return will bring an unpleasant surprise for many taxpayers in Spain. If your annual income is between 22,000 and 35,200 euros, you will likely have to return between 400 and 900 euros to Hacienda. This fiscal "blow" is due to changes in the IRPF withholdings that directly affect your paycheck.

Hacienda's Blow to Thousands of Taxpayers: Obliged to Pay

In December 2022, the Government modified the IRPF Regulation. This modification reduced the withholdings applied to the paychecks of those earning up to 35,200 euros annually.

A man with a frustrated expression in front of a laptop, with the Tax Agency logo and a warning icon in the background.
You'll have to pay up | fizkes, Pipat, Agencia Tributaria

As a result, during 2023, many workers saw an increase in their net monthly salary. However, this reduction in withholdings means that less has been paid to Hacienda throughout the year, and now, in the Income Tax Return, it is necessary to settle accounts.

How Does It Affect You?

If your annual salary is between 22,000 and 35,200 euros, you will likely have to return money to Hacienda in the next return. The exact amount will depend on your personal and family situation:

  • Income close to 22,000 euros: If you also have family burdens, such as children or a spouse without income, you may have to return a larger amount, close to 900 euros.
  • Income close to 35,200 euros: If you don't have family burdens, the amount to return could be smaller, around 400 euros.

This adjustment is because, having had lower withholdings during the year, it is necessary to compensate for the difference to meet tax obligations. You must remember that this is a mandatory procedure

A man with an expression of surprise and fear in an office with bright colors in the background and the Treasury logo next to it.
If you earn this salary, expect the worst | Europa Press, Getty Images de bowie15, en.e-noticies.cat

The Tax Agency requires all taxpayers whose income exceeds 22,000 euros annually to file the Income Tax Return. Even if your withholdings were low during the year, you are obliged to regularize your tax situation and pay the corresponding difference.

What Can You Do to Avoid Surprises in the Future?

To avoid this type of situation in future returns, it is advisable to review your withholdings. You can request your company to adjust the withholding percentage on your paycheck to be closer to what you will actually have to pay in taxes. This way, you will avoid having to return large sums in the annual return.

Planning your finances, knowing how withholdings work and how they affect your return will allow you to better manage your income and avoid unpleasant surprises. This adjustment is a consequence of the reductions in IRPF withholdings applied during 2023. To avoid future fiscal "blows," it is advisable to review and adjust the withholdings on your paycheck and adequately plan your finances.

➡️ Economy

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