Do you know who will benefit from the tax new Simplified Trust Regime?

Tax Do you know who will benefit from the new Simplified Trust Regime? The SAT makes available the Simplified Trust Regime, a simple alternative for compliance with tax obligations.

Simplified Trust Regime

With the entry into force of the new tax provisions for the year 2022.

The Tax Administration Service makes the new Simplified Trust Regime available to the taxpayer.

A simpler alternative for complying with tax obligations.

What is the Simplified Trust Regime?

It is administrative facilitation so that the payment of the income tax (ISR) is carried out in a simple, fast, and efficient way.

It will use invoiced and collected income as a basis.

Which will allow the taxpayer’s accounting work to be reduced without requiring the support of third parties. 

The SAT, as it does annually, will do the calculations and offer the preloaded annual return that will be practically ready.

only to be compared and paid.

The proposal is aimed at individual taxpayers who receive an annual income of fewer than 3.5 million pesos billed according to their economic activity.

Belonging to one of the four tax relief regimes that make up the Simplified Trust Regime:

1. Business and professional activities

2. Tax Incorporation Regime

3. Use or enjoyment of real estate (lease)

4. Agricultural, Livestock, Fishing, and Forestry Activities

According to economic censuses, almost all establishments in the country are micro, small, and medium-sized enterprises.

Business and professional activities

The SAT has a registered registry of 2.1 million micro and small businesses whose gross income per year does not exceed 35 million pesos.

Which represents 96% of the total number of legal entities that will benefit from joining this new regime.

Due to these small ISR payment rates, taxpayers will not be able to deduct any type of expense. 

This is because, even with the deduction possibilities.

The effective ISR rate for individuals was 25.4% in 2020, which represents ten times more than the maximum rate of the Simplified Trust Regime.

If you still have doubts regarding the new Simplified Trust Regime.

Visit the minisite here where we will help you clarify them.

Can I deduct health insurance?

In other words: are health insurance deductible

The good news is that there are numerous exceptions to the rule, so health insurance can add one more to its many advantages, in this case economic.

Provided that a series of circumstances occur.

It is possible to have the tax benefit of the deduction of medical insurance both in the case of self-employed workers.

The self-employed, and those who work for others and have medical insurance provided by their company.

And so can companies that take out a collective medical policy for their employees.

In this sense, the Ministry of Finance makes a clear distinction between self-employed workers and salaried workers.

whose economic circumstances and obligations are different.

What tax benefits does health insurance have?

Self-Employed Health Insurance Deduction

Is the self-employment health insurance deduction possible?

The legislation states that the health policy is a deductible expense in the Personal Income Tax (IRPF) declaration.

So the self-employed who have health insurance can take advantage of important tax benefits.

Limits and conditions

Self-employed workers have two options to deduct health insurance in the personal income tax return:

in a single payment or in several installments, through form 130.

If you want to know how much the medical insurance deducts, the deduction limit is 500 euros for each person in the family.

Although it rises to 1,500 in the event that one of them has a disability.

Can I deduct health insurance as an employee?

Not only to him but to his spouse and his children under 25 years of age -under the conditions that we explained before-. 

Example of the tax benefit for the employee

Suppose an employee earns 18,000 euros per year, of which 450 comes in the form of health insurance payments.

In the income statement, the income from work will be 17,550.

so the Tax Agency will take this figure into account when applying the corresponding taxes.

As an individual, can I deduct health insurance from personal income tax?

No, in no case can an individual deduct private medical insurance in the Personal Income Tax

In the event that we can do so, we must also consider the existing differences in each autonomous community with respect to tax regulation and relief from medical insurance, so if you have any doubts.

We recommend you consult the Tax Agency or an agent to inform us about the prevailing law in our region.

What other insurance can be deducted from income?

Health insurance deductions are not the only ones that you can deduct in the Individual Tax.

Knowing the tax advantages of our insurance and knowing how to make them effective when making the income statement is a wise practice.

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