Catalonia reduces the effect of ERTE on income with a tax deduction

Catalonia will reduce the ERTE tax bill in this income statement to about 250,000 Catalans, having introduced an autonomous deduction in personal income tax that avoids a penalty for having two or more payers.

Specifically, some 250,000 Catalans who received a maximum of 22,000 euros gross per year in 2020 and who had more than one payer, due to circumstances such as having been in ERTE, will be entitled in the current income campaign to this regional deduction.

It is a deduction that the Government approved last November but that will be applied now, on the occasion of the income campaign, which started on April 7, and that will mean a reduction in income of 16.3 million for the Generalitat.

This regional personal income tax deduction aims to prevent people with low incomes who have been affected by a temporary ERE or have been unemployed from being penalized when paying this tax simply for having received from more than one payer .

Current personal income tax regulations establish that those who have received less than 22,000 euros gross per year from the same payer are not required to file an income tax return.

On the other hand, if there are two or more payers – such as a company and the State Public Employment Service (SEPE) – the declaration must be presented from 14,000 euros gross per year, provided that the amount received from the second or other payers is over 1,500 euros.

The deduction created by the Generalitat is therefore equivalent to the difference between the full Catalan tax and the full state tax, provided it is positive.

Ultimately, the Generalitat will stop charging this differential to prevent these workers from being penalized when making the income statement for the 2020 fiscal year.

As an example, if a taxpayer without dependent descendants or ascendants received 20,000 euros last year from a company and another person in the same situation received the same amount but from two payers (a company and the SEPE, for example), to the first There are tax withholdings of 2,340 euros for personal income tax and a total of 2,513 euros for the second.

Those 173 euros of difference between one person and another are what avoids this tax deduction of the Generalitat that is released now.

However, the Catalan Tax Agency advises on its website that this deduction does not appear automatically in the draft of the return, so it must be the same taxpayer who must apply it to take effect in the total calculation, and for this reason the ATC reminds that box 0824 must be checked.

However, this deduction does not guarantee that the result of the return will be returned, since the final result will depend on the withholdings made during the year. In fact, if there have been no withholdings or these have been very low, the result will be to pay, underlines the ATC.


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