IRPF in a subrogation

When there is company subrogation, it is considered that there is a single payer.

Many taxpayers wonder if, when filing their income tax return, they should consider whether business subrogation if there is one or two payers. That is, they question whether, for the purposes of determining the obligation to declare personal income tax, there are one or two payers as a result of it.

It must be remembered that article 44 of the Workers' Statute defines the following:

“The change of ownership of a company, a work center or an autonomous productive unit will not itself terminate the employment relationship, leaving the new employer subrogated in the labor and Social Security rights and obligations of the previous one., including pension commitments, in the terms provided for in its specific regulations, and, in general, any obligations regarding complementary social protection that the transferor has acquired.”

Well, as indicated in article 96 of the Personal Income Tax Law, employed workers are not required to file personal income tax if their entire income comes from a single payer and does not exceed 22,000 euros, but this limit is reduced if they receive income from two or more payers: in that case they must file the declaration if Their full returns exceed 14,000 euros and the returns paid by the second and subsequent payers exceed 1,500 euros.

When the transfer of a business occurs, doubts may arise among employees about whether, for tax purposes, a new payer is considered to exist, since this affects their obligation to file the personal income tax return.

Now, there may be two payers as a result of a business subrogation, but in this case, the limit of 22,000 euros continues to apply. That is, the Treasury considers that the payments from the first company and the surrogate come from a single payer, so the workers are not harmed by the change of company (DGT V1657-21).

This, regardless of whether the new business owner regularizes the withholdings that the previous one was making (for example, because it detects that they were being made incorrectly).

For all of the above, it is important that the worker keeps all the documentation related to surrogacy, to prove, if required by the Tax Agency, that the worker happens from one company to another within the framework of corporate subrogation. As well as inform your tax advisor of said movement between companies.

This situation is also common in business groups, since it is normal for a worker to “change” company and becomes part of another company in the group. In this case, it is also considered that there is a single payer.

Therefore, these changes do not affect:

1. Nor to the employee's obligation to declare
2. Nor to the calculation of withholdings
3. Nor to the amount of severance pay that is considered exempt from personal income tax (which is calculated according to the employee's seniority in the group, and not according to that of the last company) [DGT V1656-21].

The concept of a group of companies is regulated in the Commercial Code, and the Supreme Court has complemented this definition by indicating that a group of companies exists when, among other requirements, there is an integrated or unitary functioning of the work organizations of the different affected companies.