Tax Simplification
On January 16, 2025, the government approved 30 measures under the Tax Simplification Agenda.
The aim of these measures is to simplify and remove bureaucracy in various tax processes, with an impact in the areas of IRS, VAT, IRC and IUC, among other taxes.
Most of the measures will come into force as early as 2025, but the more complex ones won’t go ahead until 2026.
Some of the changes are:
IUC (Single Circulation Tax)
IUC will now have a single payment date for all vehicles, which will be in February instead of the month of registration.
It can also be paid in two instalments when its value exceeds 100€.
ISV (Vehicle Tax)
When importing used cars, individuals and operators will now be able to present the Customs Vehicle Declaration (DAV) at the customs office in the area where they are domiciled.
The measure applies to private individuals and registered operators.
IRS (Personal Income Tax)
More information on tax options will be available when taxpayers fill in their personal income tax return, and there will be a warning about the possibility of aggregating income.
Withholding tax will no longer be compulsory for amounts below €25.
VAT (Value Added Tax)
There will be changes to the deadlines for requesting payment in instalments.
The Periodic VAT Return for natural persons without taxable transactions will now have the possibility of automatic submission.
There will be a review of the formalities for the procedure to waive the VAT exemption on property transactions.
IRC (Corporate Income Tax)
The annual declaration (model 22) will now be pre-filled with the deduction of tax losses from previous years.
IRS Model 3 Declaration of Exempt Income
The State Budget for 2024 introduced changes to article 57 of the CIRS, in particular the obligation to report income subject to non-inclusive rates – which the Tax Authority (AT) is already aware of – and income not subject to IRS when it exceeds €500 (annually), as well as assets held in countries, territories or regions with a clearly more favourable tax regime.
This would give rise to various constraints, particularly with regard to identifying and quantifying the income to be taken into account, and a setback for taxpayers who use the Automatic IRS.
