This measure, included in the sixty-first additional provision of the PIT Law, primarily aims to reduce the tax burden on the most modest salaries in Spain. The deduction is applied directly to the net tax liability, resulting in significant savings for beneficiaries.
However, not all workers are eligible for this benefit, as the Tax Agency has established specific income limits. To qualify, gross employment income must be less than 18,276 euros annually, and other income (such as rentals, bank interest, or capital gains) cannot exceed 6,500 euros annually, excluding exempt income.
The deduction amount varies depending on the income level. Those with incomes below 16,576 euros will receive the maximum deduction of 340 euros annually. For incomes between 16,576 and 18,276 euros, the 340 euro amount is progressively reduced using a specific mathematical formula.
“"It is important to note that this aid has a cap: the amount of the deduction cannot exceed the portion of the tax liability (state and regional) that proportionally corresponds to that employment income."
Specifically in the Canary Islands, it is crucial for taxpayers to also review other regional deductions, such as those related to habitual home rental, medical expenses, or those aimed at mitigating the impact of rising prices, which traditionally help alleviate tax pressure in the Islands.
