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Source: Juan Gomez - Vice President and Member of Training AEAFyT 16 May 2011

Tax deductions on income for educational expenses incurred in 2010 and 2011 in Madrid

Law 10/2009, (BOCM 29/12/2009) Fiscal and Administrative Measures for the Community of Madrid in 2010

DEDUCTIONS IN THE INCOME TAX FOR EDUCATIONAL EXPENSES MADE IN 2010 IN MADRID

Law 10/2009, (BOCM 29/12/2009) Fiscal and Administrative Measures for the Community of Madrid in 2010, maintains the legislated for 2009 on the deduction in the Income Tax of Individuals schooling expenses mandatory satisfied, additional expenses and language training, and having entered into force on 01.01.2010 be taken into account in the personal income tax returns, which these days are making up for residents in that community. Consequence that I have made several inquiries about it, I have to clarify it:

1. SCOPE OF THE DEDUCTION.
Parents, guardians or grandparents with grandchildren in their care, may be deducted from the whole amount of income tax autonomous, 10% of the following charges:

             
a) Compulsory education of children in the compulsory levels, ie primary and second.

             
b) Costume for the exclusive use school (uniforms), children enrolled in primary and second.

             
c) Language teaching, whether this is taught as an extracurricular activity as having the character education scheme.

Are not, therefore, the fees for schooling from early childhood and high school.

         
It is understood that, in the case of language teaching, being an unregulated activity, not confined to the children studying primary and second, it applies to all children and descendants by the taxpayer.

         
It should be noted the incongruity of calling "extracurricular activity" to teaching languages, when Article 3 of Royal Decree 1694/1995, does not allow the "extracurricular activities" sensu stricto may have curricular content. It is understood that the designation of "extracurricular activities" are included and any other complementary activities, such as assistance to off-site activities arranged, the leases to other entities holding centers, etc.

2 -. MAXIMUM AMOUNT OF DEDUCTION.

         
The maximum amount of the deduction amounts to 500 Euros per year for each child residing with the taxpayer.

         
In the event that the children live with both parents, each of them may be deducted half the amount, if they make the income statement on an individual basis.

3 -. LIMITATIONS ON DEDUCTION.

         
To apply the deduction is necessary that the taxable amount of income tax, coupled with the general base and saving does not exceed the amount of $ 10,000 multiplied by each member of the family unit.

         
Therefore, not all families can avail of this deduction, since it excludes those who obtain income over the amount of tax bases above.

4 -. FORMAL REQUIREMENTS TO JUSTIFY THE DEDUCTION.

         
To carry out the deduction is necessary documentary justification, ie be in possession of receipts evidencing payments made.

         
Therefore, the Department must provide documentary justification for the expenses can be deducted. Language centers providing complementary activities and / or school will have to issue a receipt, and if they are sold uniforms must provide parents the required bills.

The above deductions are reduced by the amount of grants and aid received from the Community of Madrid or any other Civil Service to cover all or part of the expenses mentioned.

For the year 2011, there are changes including that there is no single percentage deduction, which reduces the maximum amount that can be applied as follows:

DEDUCTIONS IN THE INCOME TAX FOR EDUCATIONAL EXPENSES MADE IN 2011 IN MADRID

Law 9 / 2010 of 23 December on Fiscal, Administrative and Public Sector Rationalization (BOCM 29/12/2010), amending the scope of the relief of school fees, which for the year 2011 to present in 2012 ):

 
The deduction rates applicable are as follows:
15% of school fees.
10% of the cost of language training.
5% of the purchase of costumes for school use only.
      
2, The amount of deduction shall not exceed 400 euros, in 2009 and 2010 was 500 euros for each of the children or descendants that generate the deductible.

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