The regional half of income tax
IRPF, the Spanish personal income tax, is a shared tax. Two scales are applied to the general taxable base: the state scale and the regional one, and each autonomous community approves its own, with its own bands and its own rates. The community that applies to you is not chosen: it is the one where you had your habitual residence during the year, under the residence and connection rules laid down in the statute on devolved taxes.
The same holds for the personal and family allowances, which the communities may modify, and for the deductions. We are not going to give you a rate or an amount here: those figures move from one year to the next and what counts is the rule in force for the year you are declaring. What is worth knowing is that they exist and that they are lost by not looking.
The deductions that go unclaimed
Asturias has regional deductions of its own, and most of them are not applied by the draft return on its own: they have to be entered, and some require the condition to be evidenced. They tend to turn on personal and family circumstances, on renting a home, on the rural environment and on certain investments. Each has its own income limit and its own paperwork.
The pattern we see most is not an aggressive claim that was refused. It is a modest one that was never made, repeated year after year because the draft return was confirmed each spring exactly as it arrived. Going through the list once, against the rule for the year, is usually a short piece of work whose result then repeats in your favour.
The draft carries what the administration knows about you: payslips, pensions, interest. It does not carry what only you know, which is exactly where the deductions are. Confirming it without looking is the quietest way there is of paying too much, and it is put right by applying to rectify the self-assessment, for which there are four years.
The pension, the withholding and the second payer
A pension is employment income and its payer withholds according to the personal circumstances you have notified. If that information is out of date — a change in the family, a recognised disability, a second pension — the withholding does not adjust itself.
And there is a rule that catches people every year: where there is more than one payer, the income threshold above which you are obliged to file drops, and it drops considerably. Somebody drawing two pensions, or a pension and a supplement from another body, can become obliged to file having never been obliged before, and the return comes out payable because each payer withheld looking only at its own part. Nobody has made a mistake: that is how the system works.
Inheritance in Asturias
Inheritance tax is devolved, and Asturias has a scale of its own and reductions of its own, with different treatment according to the degree of kinship. The amounts are revised, so the rule in force at the date of death is checked, because that is the one that governs. The deadline is six months from the death, extendable if the extension is applied for within the first five, and the base is determined by reference to the value that the tax rules fix for each property, not to what the family thinks it is worth. It is in inheritance and gift tax.
Who writes to us from Oviedo
| Who | What ends up being reviewed |
|---|---|
| A pensioner with two payers | Whether they are obliged to file and why the return comes out payable |
| A family that has never looked at the regional deductions | Which ones fit and whether earlier years can be recovered |
| A public employee with an activity of their own | Census registration, compatibility and interim payments |
| Heirs to a flat in the city | The Asturian rule at the date of death and the six-month deadline |
| Somebody moving to another region mid-year | Which regional scale applies to them that year |
How we work with clients in Oviedo
By looking at the return before it is filed rather than afterwards. In most cases from here there is no large problem: there are three or four boxes nobody has ever reviewed and which have been repeating themselves identically for years.
Where it turns out that too much was paid in earlier years, a rectification can be applied for within the four-year limitation period. We will tell you frankly whether the amount makes it worth doing or whether the work costs more than what comes back, and we will not tell you a refund is certain: that is decided by whoever reads the file, not by us.
An Oviedo civil servant who signs technical appraisal reports on the side
An engineer working for the regional administration, on a salary of 32,000 €, obtains the compatibility authorisation that Spanish public employees need for any second activity and starts writing technical appraisal reports for insurers and law firms. He registers with the tax agency and in the self-employed Social Security scheme, at the flat rate. His first year of activity:
| Item | Amount |
|---|---|
| Fees invoiced | 9,000 € |
| VAT charged (21 %), paid in through Modelo 303 | 1,890 € |
| Withholding by his clients, at 7 % because it is his starting year | 630 € |
| Self-employed contribution at the flat rate (86 € × 12) | −1,032 € |
| Professional association and professional liability insurance | −468 € |
| Net income from the activity | 7,500 € |
Those 7,500 € are added to the salary and taxed at the marginal rate of someone already earning 32,000 €, on the state scale and the Asturian one, which is far above the 7 % withheld. Result: in June the return shows tax to pay, after years of showing a refund. Nobody made a mistake; the employer knows nothing about the reports and the clients withhold the minimum. How the two fit together is in salary and self-employment at the same time.
The calendar of the Oviedo employee with a side activity
| When | What |
|---|---|
| Before the first invoice | Compatibility granted, tax registration and self-employed Social Security registration |
| 1 to 20 April, July and October; the fourth quarter until 30 January | Modelo 303 with the VAT on the reports; no Modelo 130 as long as at least 70 % of income carries withholding |
| January | Annual VAT summary |
| April to the end of June | A single income tax return with the salary and the activity |
There is also a cash-flow problem peculiar to technical appraisal reports: VAT falls due when the service is supplied, not when it is paid, and a report for court proceedings or an insurer can take months to be paid. Meanwhile, the VAT on that invoice has already been paid in. There is a special cash-accounting VAT scheme that delays payment until collection, with a time limit, normally opted into in December for the following year. It also affects what can be deducted on purchases, so it is decided with a full year's figures in front of you.
And if in some year the reports grow into something like a second salary, the self-employed contribution stops being the flat rate: once that ends, contributions are paid by brackets according to expected net income, and adjusted when the real figures are known. Someone who also contributes through their salary may be entitled to recover part of what was overpaid if the two contributions together exceed the cap Social Security sets each year; it is checked every year, with both bases in front of you.
Someone who knows the activity will leave tax to pay can ask their employer in writing for a higher withholding rate than the one that applies. In a public administration this is usually done on the same employee data form. It does not change the final tax, but it spreads it over twelve months instead of concentrating it in a single payment. And if in some year the reports are for private individuals and the share with withholding drops below 70 %, Modelo 130 appears the following year. Registration starts with the self-employed registration form.