As you probably know, the annual tax form for your 2009 income should be submitted to Hacienda (the tax people) June 30, 2010 without fail.

Many clients have asked our advice, and below we can answer some of your questions.
1. I have a low income, should I send in a tax form?
In some cases the answer is YES: when you have been working for more than one company, and when you earned more that 1.500 € in the second one (in 2009), then you are obliged to fill in the tax forms “modelo 100” or “declaración de la renta”.
In some cases, it will not change anything (total annual incomes of +/- 10.000 €) but in other cases there may be something to be paid (because both companies will have recorded the withholding tax – “retenciones” – as if you had been only working for them, but on a lesser basis. Tax is like a staircase: the more you earn, the more taxes you should pay on the additional penny/euro.
2. Why don't I get a tax refund?
Some customers on low incomes are looking to receive a refund from Hacienda. Unfortunately, this only happens if your employer has been paying your “retenciones”. When the amount is 0,00 €, you will receive NOTHING.
3. I am renting my house/apartment privately: are there any advantages?
YES, this could be very interesting, because there are two deductions, one on a national basis, and one on a regional basis (Canary Islands).
4. Can you advise me how to pay less tax?
You could take out a private medical insurance (limit: 500 €), a pension plan (up to 10.000 €). If you had a baby, you are entitled to receive 2.500 € (and 100 €/monthly up to three years).  Or if you have the opportunity to buy your new home, some of the credit charges could be withdrawn next year.
If your want more advice, please do contact us. Stéphane MERCIER, economist and tax expert. This e-mail address is being protected from spambots. You need JavaScript enabled to view it  Stéphane Mercier, Administrador Expertos de Tenerife S.L. C.C San Eugenio - Local 99, 38660- San Eugenio (Adeje, Tenerife). TLF- 922713851. FAX- 922716386