General Deduction Rules 2023

✓ verified by Cristina Gómez Torrens Senior International Accountant

Welcome to your comprehensive guide on Spain's tax deductions for the year 2023. As you navigate through your personal income tax return (Renta), it's essential to stay informed about the latest changes and opportunities that can affect your financial planning. This guide delves into various categories of deductions that could significantly reduce your taxable income, ranging from general deductions, investments in real estate and startups, to incentives for business investments and sustainable practices.

Whether you're self-employed, investing in your future, or contributing to charity, understanding these updates and how they apply to you can lead to substantial tax savings. The Spanish tax system offers a variety of deductions under specific conditions, including enhancements in childcare expenses, changes affecting the self-employed, and incentives for investing in new companies or economic activities.

This guide aims to provide you with clear, actionable information to help you make the most of the tax benefits available in 2023. Stay ahead by leveraging these deductions to optimize your tax returns effectively.

General deductions → 

- Investment in Main Residence (Transitional Regime →

- Investment in New or Recently Established Companies →

- Incentives and Stimuli for Business Investment in Direct Estimation Economic Activities →

- Donations and Other Contributions →

- By Income Earned in Ceuta and Melilla →

- Residence on the Island of La Palma during 2023 →

- Rental of Main Residence (Transitional Regime) → 

- Energy Efficiency → 

- Households by Fiscal Residents in EU or EEA Member States → 

- Plug-In Electric Vehicles and Charging Points →

Regional deductions → 

General Deductions

Updates for the 2023 Personal income tax return (Renta) regarding general deductions:

For 2024, there is a new development regarding the maternity deduction and increased childcare expenses. The Supreme Court has approved an additional €1,000 for childcare expenses, despite the tax authority considering them unlicensed centers.

Furthermore, the minimum of €1,000, which allowed self-employed individuals to avoid filing a tax return under the new contribution system, has been eliminated. Regardless of their income, self-employed individuals must now compulsorily file a tax return.

Investment in Main Residence (Transitional Regime)

This deduction is under a transitional regime, meaning it will phase out over time as the current legislation has changed, excluding this deduction. Thus, only taxpayers who meet certain requirements on specific dates can apply it. Specifically, it's available to those who purchased or made payments towards building their main residence before January 1, 2013; if payments were made for construction, the construction must have been completed before 2017, otherwise, this deduction cannot be applied.

Investment in New or Recently Established Companies

You can claim a 50% deduction on investments made in newly established companies, based on a maximum annual base of €100,000. The entities you've invested in, along with the acquired shares and/or participations, must meet the following criteria:

• They must be incorporated as Public Limited Companies (S.A.), Limited Liability Companies (S.R.L, S.R.L.L.), or Worker-Owned Companies (S.A.L.), and they must not be listed on any organized market (a condition that must be maintained throughout the ownership period).
• They must conduct an economic activity.
• The total equity must not exceed €400,000.
• Shares must be acquired either at the time of incorporation or through a capital increase and must be retained for a period of more than three years but less than twelve years.
• You cannot hold a direct or indirect stake exceeding 40%.
• These requirements must be verified by a certification issued by the entity.

Incentives and Stimuli for Business Investment in Direct Estimation Economic Activities

If you are engaged in an economic activity on a direct estimation basis, you can generally apply the incentives and stimuli for business investment established or to be established in the Corporate Tax legislation (with some exceptions depending on the activity).

Basically, the applicable deduction in this case is the deduction for investment in new fixed assets or real estate investments related to the economic activity. Specifically, you may deduct a percentage of the amounts invested in fixed assets and/or acquisition of real estate related to your activity in the following proportions:

• Generally, 5% of the amount invested.
• In certain cases, 2.5% of the amount invested, which are as follows:
• If you apply the 20% reduction for starting an activity.
• If you earned income in Ceuta and Melilla and therefore applied the deduction for obtaining these.

Donations and Other Contributions

You can deduct a specific percentage when making donations and other contributions, depending on whether they are:

• For the first €150, an 80% deduction is applicable.
• For any amount above this, a 35% deduction applies. 
• If donations are made over several different years, you can increase the deduction by an additional 40% due to repetition.

• For the first €150, you can deduct 85% of what you paid. 
• For any amount above this, a 40% deduction applies. 
• If donations are made over several different years, you can increase the deduction by an additional 45% due to repetition.

By Income Earned in Ceuta and Melilla

If you have earned any type of income from Ceuta and Melilla, you can deduct up to 60% of the total state and regional tax quota, subject to certain prerequisites reviewed by the regulations.

Residence on the Island of La Palma during 2023

If you resided on the island of La Palma during 2023, you could benefit from a deduction of up to 60% of the total state and regional tax quota, subject to certain prerequisites reviewed by the regulations.

Actions for the Protection and Dissemination of the Spanish Historical Heritage

You can deduct 15% of the investments or expenses incurred when:

You have acquired goods considered part of the Spanish Historical Heritage.

You have incurred expenses for conservation, repair, rehabilitation, maintenance, and/or exhibition of goods declared of cultural interest.

Rental of Main Residence (Transitional Regime)

This deduction is also under a transitional regime; if you have a rental contract for your main residence dating before January 1, 2015, you can benefit from this deduction. It is not necessary to have applied this deduction previously, but you must have been entitled to apply it.

The amount of the deduction is 10.05% of the amounts paid for rent, provided that your taxable income is less than €24,107.20.

Energy Efficiency

These deductions were introduced by the Law to Promote Building Rehabilitation and are related to amounts invested in rehabilitation works that improve the energy efficiency of the main residence or rented property and in residential buildings. The period for performing these works and making payments started on October 6, 2021, and will end on December 31, 2024, except for the deduction for energy rehabilitation of buildings, which has a longer period ending on December 31, 2025. To apply for the deduction, you must have an energy efficiency certificate with a series of requirements established by the corresponding regulations.

There are three types of deductions based on the purpose of the works:

1. Works that reduce heating and cooling demand: As a general rule, 20% of the amounts paid are deducted.

2. Works that reduce non-renewable energy consumption: As a general rule, 40% of the amounts paid are deducted.

3. Energy rehabilitation works for buildings: As a general rule, 60% of the amounts paid are deducted.

Households by Fiscal Residents in EU or EEA Member States

If one of your household members is a resident in another EU or EEA member state, you can apply a deduction to equalize the resulting tax amount as they are prevented from filing a joint declaration; thus, this deduction equalizes the amount as if the entire household were fiscal residents in Spain.

There are certain conditions for the application of this deduction that will need to be analyzed in each case, but one of them is that if any member of the family unit has opted to be taxed under the special regime for displaced workers (Beckham Law), this deduction will not apply.

Deduction for Acquisition of Plug-In Electric Vehicles and Charging Points

If you have acquired a new vehicle between June 30, 2020, and December 31, 2024, you will receive a 15% deduction on the purchase value of the vehicle, up to a maximum of €20,000. Regarding the charging point, it will be 15% based on a maximum base of €4,000, provided it is installed in a property owned by the taxpayer and not used for an economic activity.

Discover how Xolo can simplify your tax planning and maximize your deductions. Explore Xolo today and take the first step towards smarter financial management!

Deductions per region for Renta 2023

Andalusia regional deductions → 

Aragón regional deductions → 

Asturias regional deductions → 

Baleares regional deductions → 

Cantabria regional deductions → 

Catalonia regional deductions → 

Madrid regional deductions → 

Valencia regional deductions → 

Take the hassle out of tax season with Xolo

At this point, you have a couple of options: 

1. Memorize all the information we've provided and file your tax return on your own, hoping everything goes smoothly. 
2. Gather your invoices for all of your deductible expenses as a freelancer, upload them to Xolo, and let our team of experts handle your VAT and income tax returns like the pros we are. 

Sign up to Xolo and let us help take the hassle out of tax season.