The ERC’s deal with the government to equalize wealth tax across the country has reopened – and accelerated – the debate, but the finance ministry has been trying for months to achieve tax harmonization across the country. Spain.
According to the draft budget, the executive of Pedro Sánchez plans to increase the property tax by one percentage point – from 2.5% to 3.5% – at the highest rate, where fortunes are greater to 10 million euros. This tax affects the richest: it taxes the assets of natural persons. For example, apartments, premises, how many streams, jewelry, works of art and antiques, intellectual property rights.
Budgets provide for 2.5% to 3.5% increase in the top wealth tax rate
The government believes that the increase in this tax “will affect the regional funds and improve their level of funding”, because although it is a state tax, it is allocated to the autonomous communities, which are not only responsible for its management and perception. They can also regulate their minimum exemption, rates and deductions. For example, some autonomies like that of Madrid reduce this tax to 100%.
The negotiation of general state budgets has put the fiscal system exercised by the Community of Madrid back on the table. More specifically, ERC accuses the Madrid region of practicing “fiscal dumping” with its policy of low taxation. A situation that intends to change by taking advantage of the need for the government to carry out public accounts with the greatest support.
A three-point increase in personal income tax is envisaged for capital income over 200,000 euros and personal income tax is increased by two points for earned income over of 300,000 euros.
The increase in personal income tax, according to the document provided by the government, would affect 36,194 taxpayers, 0.17% of the total, and would have an impact of 491.4 million euros.
The executive is also considering the possibility of modifying the limits of the reduction in contributions to retirement plans: the joint reduction ceiling (member and company) goes from 8,000 to 10,000 euros and the ceiling of maximum contributions to individual plans increases to 2,000 euros. .
The increase in corporate tax is expected for large corporate groups, limiting exemptions from dividends and capital gains generated by their participation in tax corporations. According to María Jesús Montero, “this is a measure that is already applied in neighboring countries, such as France, Italy or Germany”.
This increase would affect 1,739 companies, which represents 0.12% of the total. Regarding the economic impact, this would mean 1,520 million euros. The aim of the coalition government with this measure is to “protect SMEs”. In this sense, the report provided specifies that “for three years, companies with a turnover of less than 40 million can continue to apply the 100% exemption”.