How to lower your IRPF legally: the admitted deductions

You pay IRPF, but maybe more than necessary. The law lets you deduct several things that lower the tax, and many people don't declare them. Here's the map of admitted deductions so you pay what's fair, not a peso more.

How it works (quick)

IRPF is a progressive tax: the more you earn, the higher the rate. But before computing the tax to pay, you can subtract certain admitted deductions. Each one lowers your burden: so it's worth knowing them and declaring all that apply to you.

Dependent children

If you have dependent minor children, there's a deduction per child. Per the DGI:

Per the DGI:

«20 BPC anuales por cada hijo menor de edad a cargo»

In English: 20 BPC a year for each dependent minor child

Your contributions: BPS, FONASA and FRL

What you contribute from your salary to social security is also deducted: personal pension contributions to the BPS, FONASA (health) and the Labour Reconversion Fund (FRL). You don't pay IRPF on that part. We cover this in our payslip post.

The rent credit (8%)

If you're a tenant, you can count a credit of 8% of the rent paid, with a written one-year-or-more contract and identifying the landlord. It's one of the juiciest deductions for renters — we develop it in our tenant-credit post:

Mortgage on your home

If you're paying off your own home, the mortgage instalments also deduct:

On the mortgage (with cap and conditions):

«Montos pagados en el año por cuotas de préstamos hipotecarios destinados a la adquisición de la vivienda única y permanente del contribuyente»

In English: Amounts paid in the year for mortgage-loan instalments for acquiring the taxpayer's single and permanent home

How they're applied

If you're a dependent worker, you declare your deductions on form 3100 (and file a new one on any change, like a child or a new rental). If you're independent, you count them in your annual return. The BPS publishes the current values and brackets:

Most common deductions

In short: you lower your IRPF by declaring children, your contributions, rent (8%) and the mortgage. Don't skip them: update your form 3100 on each change. Verify current amounts and caps with the DGI or your accountant.