Among the newspaper headlines dealing with items such as inflation, recession and war, an important news item was published on 21 September 2022 on the subject of tax amendments in the Autonomous Community of Andalusia.

More specifically, the Official Gazette of the Regional Government of Andalusia published Legislative Decree 7/2022 of 20 September, which introduced important modifications in the area of tax obligations that benefit, in particular, personal income tax and wealth tax payers in Andalusia.

  1. Changes in Personal Income Tax

With effect from 1 January 2022:

  • The regional scale applicable to the general tax base is modified with an increase in the amounts of the first three tranches (which is defined as deflating the income tax brackets). The following rates now apply:

As we can see in the comparative tables below, on the left (pink table) we see the former rates, while on the right (green table) we see the current rates, with the figures increasing in the first three tranches to 13,000 euros, 8,100 euros and 21,100 euros, respectively.

  • The personal and family minimum is increased
      1. The general minimum taxpayer threshold is increased to 5,790 euros per year (previously 5,550 euros). If the taxpayer is over 65 years of age, this minimum will be increased by a further 1,200 euros per year (previously 1,150 euros), and finally, if the taxpayer is over 75 years of age, it will be increased by an additional 1,460 euros (previously 1,400 euros).
      2. For descendants who are under the age of 25 or disabled (whatever their age), provided that they live with the taxpayer and do not have an annual income of more than 8,000 euros, the threshold will be:
      • 2,510 euros for the1st descendant (previously 2,400 euros).
      • 2,820 euros for the 2nd descendant (previously 2,700 euros)
      • 4,170 euros for the 3rd descendant (previously 4,000 euros)
      • 4,700 euros, for the 4th and subsequent descendants (previously 4,500 euros).

3. For forebears the threshold will be 1,200 euros per year (previously 1,150 euros) for each forebear over 65 years of age or with a disability (whatever the age) who lives with the taxpayer and does not have an annual income (excluding exempt earnings) of more than 8,000 euros. When the forebear is over 75 years of age, the amount will be increased by 1,460 euros per year (previously 1,400 euros).

      1. For people with disabilities the threshold will be 3,130 euros per year in general (previously 3,000 euros per year), and 9,390 euros per year if the taxpayer provides evidence of a degree of disability equal to or greater than 65% (previously 9,000 euros per year).


2. Amendment in the field of Wealth Taxation

With effect from the current fiscal year 2022, a regional rebate of 100% of tax due will be applied if it the amount positive.

The rationale for this important tax measure is explained in the explanatory memorandum of Legislative Decree 7/2022 itself: “With the abolition of the effective payment of Wealth Tax, it is intended that individuals will establish their tax residence in Andalusia”.

In conclusion, it can be said that these measures are very positive for the Andalusian personal income taxpayer, since, like several European countries, they bring personal income tax into line with inflation. On the other hand, the total rebate on Wealth Tax in Andalusia (100%) will provide relief to the aforementioned taxpayers, while the Andalusian Treasury will be able to collect more revenues from Personal Income Tax. Finally, in our opinion, the formal obligation for Andalusian taxpayers to declare taxable wealth remains when the amount of their assets and rights exceeds 2 million euros.

At Ventura Garcés we offer our tax and asset advisory services for the preparation and presentation of Personal Income Tax and Wealth Tax returns for tax years that are not yet time-barred.