With remunerations around 4%, deposits became one of the protagonists of 2023. Now that the Income Tax campaign is approaching, for which the Treasury has already published the calendar for submitting the declaration, the time has come to render accounts with the Tax Agency for that objective benefit.
Interest on deposits is also taxed in the income tax return. Like many investment products, deposits include a 19% personal income tax withholding on the yield.
This Treasury withholding on the deposits serves so that you do not have to pay anything later when making the rent in most cases because the money has already been advanced. However, there are two exceptions that can lead to a scare when making the rent due to deposits.
Returns above 6,000 euros on deposits
The first is when you have earned more than 6,000 euros with your deposits or your investments in general.
Deposits are taxed in personal income tax as a return on movable capital, which is part of savings income. For practical purposes, this translates into paying taxes in an escalation that depends on their profitability. The tables that apply are the following:
Profits up to 6,000 euros are taxed at 19%. Profits between 6,000 and 50,000 euros are taxed at 21%. Profits between 50,000 and 200,000 euros are taxed at 23% Profits between 200,000 and 300,000 euros are taxed at 27% Profits above 300,000 euros are taxed at 28%.
This means that if you have earned more than 6,000 euros with your deposits, the 19% withholding applied by the Treasury will not be enough to cover what you would have to pay in rent.
As an example, with a profit of 10,000 euros through deposits, you will have advanced 1,900 euros to the Treasury via withholdings (19%). However, the taxes on these investments would amount to 2,100 euros because only the first 6,000 euros of profits are taxed at 19%.
In this case, you would have to pay the difference of 200 euros when renting.
This is an extreme case, since with a maximum remuneration of 4%, a deposit of more than 150,000 euros would be required for this case.
Foreign deposits without withholding
The second case where you can get a surprise in your income due to fixed terms is when you have contracted a foreign deposit on platforms like Raisin. The reason is that many of these banks outside Spain do not apply personal income tax withholdings on their deposits (in the case of Raisin, the platform itself specifically reports this).
The fact that withholdings are not applied does not imply that this gain is exempt from tax. Foreign deposits will have to be paid in personal income tax the same as national deposits. The difference is that, since no money has been advanced to the treasury, that amount will be paid when filing the income tax return.
Returning to the previous example. Instead of paying only 200 euros for the difference between what was withheld and the result in income, with a foreign deposit those 2,100 euros will have to be paid in full when filing personal income tax.
What happens with the retention of foreign deposits?
When foreign deposits do include withholding, the section “Deductions for international double taxation, due to income obtained and taxed abroad” must also be complied with and the amount withheld indicated.
The reason is that this personal income tax withholding is not done by the Spanish Tax Agency (AEAT), but by the Treasury of the country where the deposit is contracted and for which the AEAT may not have data.
With this movement, it tells the AEAT what amount they have withheld from you so that it can take it into account and the sum as a withholding that they have already applied to you, so that you do not pay taxes twice, in Spain and in the country of origin of the bank. .
What deposits are included in the 2023 income?
Deposits are always included in the rent. For the 2023 income campaign, which is what we will do in 2024, you only have to pay taxes on the deposits that ended in 2023. That is, those fixed terms that have provided returns throughout 2023.
The reason is that in this personal income tax campaign that we do in 2024, the income for 2023 is accounted for.