The Spanish finance minister, María Jesús Montero, has announced all the measures her government will bring into force from 2023 to tackle the economic crisis. The most outstanding is what Montero herself has defined as "beneficial measures for workers and expanding tax benefits for middle and low incomes". Specifically, deductions will be applied on personal income tax for those with gross income up to 21,000 euros per year, whereas until now the deductions were limited to gross incomes up to 18,000 euros.
"The average annual salary in Spain is around 21,000 euros and, therefore, what we are proposing is to extend the tax benefits to 50% of employees." The Pedro Sánchez government affirms that this new measure will benefit exclusively those who need it most, and gave the example of a person with a gross income of 18,000 euros, who will be able to save up to 746 euros per year. Montero, making comparisons for the same income bracket with the recent taxation measures that have been applied by PP-led autonomous governments in the Community of Madrid and Andalusia, asserts that those communities have not made their changes with the most vulnerable in mind, where "currently barely 23 euros are saved".
High incomes
On the other hand, personal income tax will rise by one percent from 26% to 27% for incomes of 200,000 euros and the rates will reach 28% for those of 300,000 euros. In this case, an increase of two percent. In another section, regarding company tax, the ability to compensate a negative taxable income base is postponed, but only for "consolidated groups made up of large companies". Thus, the possibility of obtaining compensation for the losses of subsidiaries in large consolidated groups is limited to 50%. This measure will affect large companies and will also be temporary. It will thus apply to 3,609 companies, 0.2% of total companies making Spanish tax declarations, and will have an impact of 2.4 billion euros between 2023 and 2024.
New asset tax
Also, with regard to those with high asset levels, a new solidarity tax will be created that "will be in the general interest". It will be a temporary tax for the years 2023 and 2024 and will apply to those with a net worth of more than 3 million euros, which will be divided into three tax brackets. This legislation will avoid double taxation and, therefore, "that of the property tax of the autonomous communities will be fully deductible", for those communities that have it, the minister assured. The potential for new tax income for the state is 1.5 billion euros and will affect 0.1% of the total of taxpayers.
Montero has labelled those who have announced other measures in recent days as "fiscal shamans", in clear reference to the regional PP moves. But she also denies that the government has felt pressured to announce these measures since "the treasury cannot let itself respond to the pressure because that would be impossible to work", Montero underlined, concluding that the measures were based on "the model that this government responds to, that of greater social cohesion, and it is common sense that those with more economic capacity can contribute more". As always, all these measures, especially the company tax and income tax, will not affect the Basque Country and Navarra with their own autonomous community regime, although Montero warned that they may be affected by the way asset taxes are managed.