On October 20, 2021, the Official State Gazette published Royal Decree No. 899/2021, amending the Individual Income Tax Regulations, approved by Royal Decree 439/2007, regarding reductions in the taxable base by contributions to social security systems and payments on account.
1. Excess contributions to social security systems
Article 51 is amended, establishing that the participants, mutual or assured members, may request that the amounts contributed that could not have been subject to a reduction in the taxable base be reduced in the following five fiscal years.
The request must be carried out in the Individual Income Tax return corresponding to the fiscal year in which the contributions made could not have been reduced due to insufficient taxable income or exceeding the percentage limit established in Article 52.1 of the Tax Law.
2. Withholding FEES
Paragraph 1 of Article 85 is amended to read as follows:
” The following operations shall be carried out successively to calculate the withholding fee:
1st To the base for calculating the withholding fee referred to in Article 83 of these Regulations shall be applied the tax rates indicated in the following scale:
| Base for calculating the withholding tax rate – Euros included | Withholding fee – Euros | Remaining base to calculate the withholding tax rate – Euros included | Applicable rate – Percentage |
| 0,00 | 0,00 | 12.450,00 | 19,00 |
| 12.450,00 | 2.365,50 | 7.750,00 | 24,00 |
| 20.200,00 | 4.225,50 | 15.000,00 | 30,00 |
| 35.200,00 | 8.725,50 | 24.800,00 | 37,00 |
| 60.000,00 | 17.901,50 | 240.000,00 | 45,00 |
| 300.000,00 | 125.901,50 | onwards | 47,00 |
The resulting amount shall be reduced in the amount derived from applying to the amount of the personal and family minimum to calculate the withholding rate referred to in Article 84 of the Regulations, the scale provided for in number 1 above, without being negative as a result of such reduction”.
3. No increase in the withholding rate
Paragraph 5 of Article 87 is amended, stating that the withholding rate, calculated under the procedure of Article 82 of the Regulation, may not be increased when adjustments are made due to circumstances that exclusively determine a decrease in the positive difference between the base for calculating the withholding rate and the personal and family minimum for calculating the withholding rate or due to the recipient being obliged by judicial decision to pay annuities for child support and the provisions of paragraph 2 of Article 85 of the Regulation is applicable.
4. Excess contributions to social security systems
If contributions have been made by the taxpayer and contributions imputed by the promoter to the social security systems in the tax periods 2016 to 2020 that had not been reduced in the taxable income due to insufficient taxable income or exceeding the percentage limit established in article 52.1 of the Tax Law and are pending reduction as of January 1, 2021, it will be understood that the amounts pending reduction correspond to contributions imputed by the promoter limited to the contributions imputed in said tax periods. The excess over this limit will be understood to correspond to contributions made by the taxpayer.
5. Effective date
The Royal Decree becomes effective on October 21, 2021.
Source: Boletín Oficial del Estado 20/10/21