Starting in 2025, Hacienda will require the unemployed in Spain to file tax returns, regardless of their income. This new measure, introduced by Hacienda, aims to extend control over taxpayers, especially those receiving unemployment benefits. The government, through a Royal Decree-law, has included this requirement as part of a series of reforms aimed at improving fiscal transparency and fairness in the collection of the Personal Income Tax (IRPF).
Until now, only those earning more than 22,000 euros annually or 15,800 euros with more than one payer were required to declare. However, starting with the next tax season, anyone who has received unemployment benefits during the year will be required to file a tax return. This applies regardless of whether they have found a new job or if their income does not exceed the established thresholds.
Why will the unemployed be required to file tax returns next year?
The measure Hacienda will require the unemployed in Spain to file tax returns stems from the government’s need to adjust the tax system. The goal is to ensure that all incomes, including unemployment benefits, are declared. According to Royal Decree-law 2/2024, which amends Article 299 of the General Social Security Law, this obligation is part of a broader plan. The aim is to simplify access to welfare benefits and improve fiscal control. Requiring unemployed individuals to declare helps enhance oversight of deductions and tax benefits they might be eligible for.
This change also responds to a regulatory adjustment that places the unemployed on the same level as other groups required to file, such as beneficiaries of the Minimum Vital Income or self-employed workers. According to tax experts, this measure not only increases the number of tax returns handled by the Tax Agency but also raises the likelihood of identifying incorrect payments or tax adjustments that might otherwise go unnoticed.
How this measure will affect those receiving unemployment benefits
One of the key points of this new regulation is its impact on taxpayers who receive unemployment benefits and are now required to file tax returns. Although many of these individuals may not exceed the usual thresholds for filing, the obligation to file exposes them to possible tax adjustments.
For instance, a worker who loses their job and receives benefits below the 22,000-euro limit could end up paying more taxes. This happens because the benefits are added to their return, especially if withholdings were insufficient. According to TaxDown estimates, a worker with low withholdings who receives additional benefits could end up paying up to 2,069 euros more in Madrid or 2,344 euros in Catalonia due to regional tax rate differences.
Additionally, this new obligation will affect anyone who has been unemployed at any point during the year, even if they have already found a new job. This could increase the administrative burden for both citizens and the Tax Agency, which will have to manage a significantly larger number of tax returns.
Deductions and fiscal consequences for the newly required filers
While this new regulation might lead to an unexpected tax burden for some unemployed individuals, it will also allow them to access tax deductions they may not have known about before. These include deductions for rent, dependent children, and pension investments, among others, which can help reduce the final tax bill.
However, not all taxpayers will benefit equally. Those without significant deduction rights may find themselves with a higher tax bill than they expected. This is partly due to variations in the withholdings applied by the SEPE (State Public Employment Service). One factor taxpayers should carefully consider when filing is the possibility of planning ahead by adjusting their benefit withholdings or seeking tax advice to optimize their tax return outcome.
What happens if you don’t file a tax return?
Failing to comply with this new obligation will have the same consequences as failing to file a tax return in other cases. If the IRPF return is not filed, penalties can range from interest charges to fines proportional to the delay and the undeclared amount. The Tax Agency has the power to impose penalties of up to 150% of the amount owed if it detects a deliberate omission of income.
Therefore, it is essential for individuals receiving unemployment benefits to be aware of their new obligation and seek professional advice to avoid tax issues. In a context where more and more taxpayers are affected by regulatory changes like this, it is expected that the volume of erroneous or incomplete returns will increase. This could lead to more frequent inspections by the Tax Agency.
Everything you need to know about the new IRPF filing obligation for the unemployed
This measure, which will come into force in November 2024, will mark a significant change in how Hacienda manages the fiscal information of the unemployed. The expansion of the group of taxpayers required to file is aligned with the government’s strategy to increase fiscal control. The aim is to ensure that all incomes, including those from welfare benefits, are reflected in tax returns.
It is crucial for the unemployed and those in vulnerable economic situations to be aware of this new obligation. This will help them avoid penalties and ensure that they meet all fiscal requirements on time. Tax advisory firms, like TaxDown, are already warning their clients about the potential impact of this measure and the importance of planning ahead.
In summary, while Hacienda’s requirement for the unemployed to file tax returns seeks a more equitable system, it also introduces new complications for a segment of the population that may not be accustomed to such procedures. However, staying informed and seeking proper advice will be key to ensuring a smooth transition.