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This regulation on the change of withholdings in the IRPF, which will involve the increase of the exempt minimum, will be approved in a Council of Ministers. Subsequently, the IRPF regulations will be modified, probably in the General State Budget, PGE, of 2024. It is estimated that the modification introduced to the Personal Tax Regulations could benefit just over 5 ,2 million taxpayers.
The increase in the amount of the interprofessional minimum wage to 15,875 euros per year in fourteen payments by 2024 agreed between the Government and unions has forced a review of the regulation of the Personal Income Tax Regulation to prevent these taxpayers from bearing withholdings or income on account, as indicated in the draft Royal Decree submitted to public information by the Ministry of Finance.
And in addition, in order to avoid the corresponding leap error, the measure is extended to taxpayers with net income from work of up to 19,747.5 euros per year, who will see their withholdings or income on account reduced.
With this regulation, the interprofessional minimum wage would not be subject to withholding since the exempt minimum would be the same annual amount as the SMI. In addition, wages close to this interprofessional minimum wage are also affected by the improvement in the reduction to be practiced for this purpose, since otherwise a "clear jump error" would occur and they would have to pay much higher withholdings.
This increase in the exempt minimum and the reduction in the retention of close wages will have a collection impact in terms of cash of 1,385 million euros, to be distributed between the territorial administrations and the General Administration of the State.
Specific cases
The amendment to the IRPF regulation raises the income without withholding to the SMI, but depending on whether the taxpayer is married or has children, the minimum exempt from withholding is increased. For example, for a married taxpayer, and not legally separated, whose spouse obtains income of more than 1,500 euros, excluding exempt ones, with one child the minimum exempt will be 16,342 euros and with two or more children, 16,867 euros.
The minimum exempt for a single, widowed, divorced or legally separated taxpayer with one child will be 17,644 euros and with two or more children, 18,694 euros.
In the case of a tax payer without children whose spouse does not obtain an annual income of more than 1,500 euros, excluding those exempted, the minimum will be 17,197 euros. If you have one child, the minimum would be 18,130 euros and if you have two or more children it would be 19,262 euros.
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