Income Tax Return 2024: Updates and Deductions for Investors
April brings, as it does every year, a new campaign for filing the Income Tax Return. To file it correctly and avoid delays or potential penalties, it’s essential to know not only the deadlines but also any new developments or updates that may affect us—whether positively or negatively—including the potential for deductions.
This year, the official start of the campaign is April 2, and returns can be filed until June 30, or until June 25 if opting for direct debit of the first payment. Additionally, starting April 29, appointments can be scheduled by phone, and one month later, in-person appointment scheduling will be available.
Key updates for the 2024–2025 income tax return
- Payment via Bizum
In line with increasing digitalization, one of the most significant changes this year is the option to pay your Income Tax Return through Bizum. This joins traditional payment methods and allows for a faster, more convenient process. - Corrective Self-Assessment
Designed to correct errors in the Personal Income Tax (IRPF) return, this new feature becomes the sole system for making modifications. This means there’s no need for the Tax Agency to resolve a prior request, thus speeding up procedures. - Filing Requirement
For 2024–2025, filing is not required if your income does not exceed €22,000 from a single payer or €15,876 (the national minimum wage) if you’ve had multiple payers, provided that additional earnings do not exceed €1,500. However, the return is mandatory for those who received unemployment benefits, regardless of the amount received. - With the new AC7 Directive now in effect, the Tax Agency also requires that sales on second-hand platforms (such as Wallapop, Vinted, or eBay) be declared if they exceed €2,000 annually or involve more than 30 transactions in a year. If either of these thresholds is met, the earnings must be included in the tax return.
- Aid for DANA Victims in Valencia
The Tax Agency has approved several measures to support recovery in areas affected by last October’s disaster. These include exemption from taxation on aid received for material damages, including compensation from the Insurance Compensation Consortium. Additionally, victims won’t have to pay taxes on aid for personal injury or for temporary or permanent relocation from their primary residence or commercial property. - Improvements in Charitable Donation Deductions
Under the update, taxpayers can deduct 80% on the first €250 of donations—€100 more than in previous campaigns. - Deductions for Purchasing an Electric Car
Anyone who purchased and registered an electric vehicle between June 30, 2023, and December 31, 2024, is eligible for a 15% deduction on the purchase value, up to €3,000. An additional 15% deduction is available for installing a charging point, capped at €4,000. - Deductions for Energy Efficiency Renovations
These deductions apply when improvements are made to reduce heating consumption or non-renewable primary energy usage. In the first case, 20% can be deducted, up to €5,000; in the second case, 40%, up to €7,500. A third deduction of up to 60% is available on €5,000 for energy-efficient renovations in residential buildings. This applies only to owners of primary residences or rental properties, provided the property is rented before December 31, 2025. - Other Housing-Related Deductions
New deductions take effect this year for income derived from renting out properties starting January 1, 2024, if the tenant uses the property as their primary residence.
Key tax updates and deductions for startups and fintechs
With the implementation of the Startup Law, the entrepreneurial ecosystem has seen changes that may be fiscally beneficial for both founders and investors. Although some deductions were introduced in the previous campaign, here are updates to consider for the 2024–2025 filing:
- R&D Investment Deductions
Startups engaging in Research, Development, and Technological Innovation (R&D&I) may benefit from deductions of up to nearly 70% on expenses and investments, including costs related to research staff. - Startup Investment Deduction
Investing in newly created or recent startups allows for a Personal Income Tax (IRPF) deduction. Additionally, the maximum base for this deduction increases from €60,000 to €100,000 annually. - Reduced Corporate Tax for New Companies
For their first four years of activity, newly established companies can pay just 15% instead of the standard 25% Corporate Tax (IS). This reduction applies from the year the company starts earning profits and provided the company is not part of a corporate group.
Tips to maximize tax savings
With the new implementation of the Startup Law, the entrepreneurial ecosystem has also undergone changes and adjustments that may be of fiscal interest, both for founders and for those who invest in these companies. Although some of these deductions came into effect during the previous tax campaign, there are new developments to consider for the 2024–2025 tax return:
- Deduction for Investment in Research and Development. Startups engaged in Research, Development, and Technological Innovation (R&D&I) activities can benefit from deductions of up to nearly 70% on related expenses and investments, including costs associated with research personnel.
- Tax Relief for Investment in Startups. Investments made in newly created or recently established companies allow for a deduction in Personal Income Tax (IRPF). Additionally, the maximum deductible base for such investments has been increased from €60,000 to €100,000 per year.
- Corporate Tax Reduction for Newly Created Companies. For the first four years of activity, these companies can pay only 15% Corporate Tax (as opposed to the standard 25%). This reduction applies from the moment the company begins generating profits and provided that it does not belong to any business group or group of companies.
Keys to maximizing tax savings
Planning your Income Tax Return and not automatically accepting the draft version can help you save money by either paying less or receiving a larger refund. Ideally, you should work with a tax advisor to handle the return for you, but if that’s not possible, it’s important to keep the following in mind:
- Know Your Regional Deductions
Each region offers specific deductions that can be checked on the official website of the Spanish Tax Agency. - Pension Plans
Many taxpayers are unaware of the tax benefits that come with pension plans. For example, contributions of up to €1,500 to individual plans or up to €10,000 for employer-sponsored plans can be deducted. - Take Advantage of Flexible Compensation
If your employer offers flexible compensation plans, it’s worth taking advantage of benefits that can be part of your daily life—such as childcare, transportation, or meals—since these amounts are exempt from Personal Income Tax (IRPF) and thus reduce your taxable base. - Consider Whether to File Jointly or Individually
The Tax Agency states that the option to file jointly is only available to married couples, but it is not mandatory. In this regard, it’s important to evaluate your personal situation to determine whether this option is beneficial. Joint filing can lead to savings if one spouse has little or no income or has incurred a capital loss. Another scenario where joint filing is allowed is for unmarried couples with children. However, currently, whether or not you have children no longer significantly affects the choice between joint or individual filing, as the deduction is the same regardless of marital status.