The archipelago's economy is showing remarkable dynamism, reflected in GDP growth and job creation. These positive economic indicators also translate into increased revenue for the Tax Agency. For the income tax campaign, which began on July 8, an estimated 1.13 million Canarians are expected to file their declarations, a 2.1% increase from the previous year, underscoring the healthy economic situation and the addition of new taxpayers.
A key indicator of this economic prosperity is the 32% surge in declarations resulting in payments due, significantly raising the total amount paid by citizens to Hacienda. Last year, payments due amounted to 765 million euros, whereas this year the figure has climbed to 1.011 million euros. This increase is nearly double the national average of 18.4%, according to data from the Tax Agency.
“"These buying and selling operations are generating a series of capital gains that must be taxed in the Income Tax declaration and result in payments due."
This rise is primarily attributed to the strong performance of the real estate market and the high volume of property transactions. Another significant factor is the difference in withholding tax calculations. Although Canarian companies typically apply the state tax rate, the highest brackets of the regional IRPF in the Canary Islands are higher than the state ones, compelling taxpayers to make adjustments and often pay an additional amount.
While in other regions the maximum regional IRPF rate might reach 20.5% (with an aggregate of 45%), in the Canary Islands, this maximum stands at 26%, reaching 50.5% for the highest incomes. The robust economic health of the islands is also evident in Wealth Tax declarations, with a 14.4% increase in revenue, totaling 63 million euros.
Furthermore, digital investments, such as cryptocurrencies or crowdlending platforms, are also under Hacienda's scrutiny. The administration's enhanced control capabilities require taxpayers to be meticulous when declaring these assets to avoid penalties ranging from 100 to 300 euros per omitted or erroneous data point, in addition to surcharges and interest.
“"Anyone investing digitally and globally must assume they are also a digital and global taxpayer."
Warnings are issued regarding common errors, such as failing to declare digital income, overlooking minor returns, or being unaware of obligations concerning foreign assets. It is crucial to review the draft income tax return and not assume that cryptocurrencies are irrelevant to Hacienda, as every sale or exchange generates capital gains or losses that must be declared. Even modest crowdlending interests must be included in the declaration.
