Spanish taxation

The Spanish Government has started working on a series of tax measures aimed at social justice and economic efficiency, which are expected to come into force over the next two years.
According to the Spanish Finance Ministry, these are considered surgical measures to improve the welfare state and focused on a major contribution of wealthy individuals and big seized companies and used selectively, on reducing taxation to those who have the least.

Today we highlight the measures that will enter into force aimed at increasing tax collection.

✔ It is envisaged that the so-called Solidarity tax on large fortunes will apply temporarily only in fiscal years 2023 and 2024 for individuals whose wealth exceeds 3 million euros.

Progressive rates shall apply on tranches ranging from 3 to 5 million euros (that will be subject to a 1.7% tax), from 5 to 10 million (at 2.1%), and exceeding 10 million (that will be subject to tax at a rate of 3.5%).

Those taxpayers already subject to Wealth tax (let us remind you that it is not applied in all Spanish regions) will deduct this tax from the Solidarity tax quote.

The Spanish Government estimates that this measure may affect 23,000 taxpayers and that the tax collection will be 1,500 euros.

✔ In the area of Personal income tax, it is expected to increase the tax rates for capital income with two new tranches:

  • Increase of one percentage point, up to 27% for income between 200,000 and 300,000 euros.
  • Increase of two percentage points, up to 28% for income from 300,000 euros.

This measure aims to reduce the difference between tax rates applying to employment and capital income. It is expected to affect 17,814 taxpayers, with an estimated collection in 2024 of 204 million euros.

✔ In the area of Corporate income tax, the possibility of offsetting tax losses from subsidiaries in tax consolidation groups shall be reduced by 50%.

Although it is expected to affect only 0.2% of the Corporate income tax taxpayers, it will imply collecting 2,439 million euros between 2023 and 2024.

✔ How these measures will finally be implemented will need to be closely monitored as they will imply an increase in the tax burden for many individuals and companies.

Publicado el 10-2022 por PBS