Have you already reported to the Tax Authority the amount paid to domestic workers?

Until the next February 28, the declaration with the amount paid to domestic workers during 2024 must be submitted to the Tax Authority.

What does this communication consist of, and until when must it be carried out?

This communication consists of submitting to the Tax Authority a declaration proving the amount paid to domestic workers in the year 2024, in order to promote the formal hiring of these professionals, providing more guarantees for those who perform this type of service and promoting contributions to public finances.

Generally, the communication must be made by February 10 of the following year. However, given the novelty of the deduction regime, it has been extended until February 28, 2025.

Is there any tax benefit associated with this communication?

Similar to health or education expenses, the State Budget for 2024 introduced a deduction for the provision of domestic work. That said, the deduction will apply in the present year, 2025, referring to the IRS for 2024.

Employers of domestic workers can deduct 5% of the amount paid, up to a limit of €200.00.

Is it necessary to meet additional requirements?

Only domestic workers duly declared to Social Security are considered. Social Security communicates the remuneration amount to the Tax Authority, so it is important that there is an employment contract framed within the legal regime of the domestic service contract.

What activities fall under domestic service?

Domestic service work is considered to be the provision of a set of activities related to meeting the needs of the employer’s household. Activities included are: supervision and assistance to children, the sick, and the elderly; meal preparation; laundry care; cleaning and tidying; supervision and care of domestic animals; gardening; sewing.

How should the communication be made to take advantage of the deduction?

The employer must submit, through the Tax Authority’s portal, the Model 10 declaration, with the amounts paid to the worker in the previous year and the value of the contributions made to Social Security.

For incomes above the national minimum wage, with withholding tax for IRS purposes, where the employer must submit the monthly income declaration on the Tax Authority’s portal, the submission of Model 10 is waived.

What is the consequence of not submitting this declaration? And of failing to register the worker with Social Security?

If the employer does not submit this declaration by the legally established deadline, they will not benefit from the IRS deduction and may also incur fines. On the other hand, failure to fulfill the obligation to register with Social Security may lead to prison sentences of up to three years or fines of up to 360 days, with a value that can reach €180,000.