Income tax reduction for disabilities
Following an article we wrote in a previous edition of this newspaper, regarding certain deductions of Income Tax, one requires a certification issued by the Generalitat Valenciana which will state the degree of disabilities, which can then be used to calculate any deductions that one may be entitled to.
In order to obtain this certification, one has to complete a form which has to be accompanied with all the medical reports that prove the disabilities, together with the Padrón certificate that states that one is a resident in the Valencian Community.
These documents have to be presented to the Consellería de Bienestar Social (these offices are situated in Alicante, Valencia and Castellón). This presentation has to be done personally or by a representative, together with the Passport and NIE and residence documents.
Once this has been done, the Consellería will summon the person in question, with a time of day, date and address where one will have to undergo a medical examination.
After this, the medical team of the Consellería will determine degree of incapacity issuing the certificate stating the percentage of disability, and according to his percentage, the corresponding deductions will be applied to the income tax.
Government Service Pensions
Pensions paid to persons for services rendered to the government, such as civil servants, doctors, teachers, police etc, paid to those who are tax residents in Spain, are tax exempt in Spain.
However, the Spanish tax authorities take them into account when completing the annual income tax form, which increases the percentage of tax due.
The UK interprets the Double Taxation agreement differently, as a Spanish person in receipt of one of these pensions, as a tax resident in the UK, is tax free.
It is important to give the right information to your tax consultant when preparing your annual income tax forms. Some tax consultants do not ask the right questions or there is a language barrier.
The amount that has to be declared is your worldwide income for the whole of the calendar year of 2018, from the 1st of January until the 31st of December. The source of the income is important, as this may be taxed differently, depending on its source. Any tax that has been paid in the country where the income originates is important, as there may be a double taxation treaty in place between both countries, which may reduce your final liability in Spain.
The Spanish Tax authorities can (and often do) find out if you are not declaring your whole worldwide income, as it is quite simple nowadays with the exchange of information that most countries have subscribed to.
Our advice would be for you to take your diary out and make an appointment with your tax consultant as soon as possible. Many people seem to prefer to wait until the last minute, which may cause problems in filing the tax forms correctly completed due to pressure (caused by the late minute syndrome) and perhaps lack of correct information.