On 29 September, Spain’s Minister of Finance announced a series of tax measures, some of which have already been included in the General State Budget Bill for 2023. The multidisciplinary nature of the proposed measures makes it necessary to explain the key points of interest for each tax in order to unravel their future implications.

“Solidarity” Wealth Tax

No legislative texts have yet been published and we can only tell you what the Minister of Finance publicly announced.  

• A temporary tax for years 2023 and 2024 (to be reviewed before the end of 2024).  
• To be paid by individuals with net assets (i.e. total assets minus total liabilities) worth at least EUR 3 million.
• A rate of 1.7% will be applied to those holding net assets worth between EUR 3 and 5 million, 2.1% to those holding between EUR 5 and 10 million, and 3.5% to those with more than EUR 10 million.
• As the autonomous regions apply the current Wealth Tax to their residents, in order to avoid double taxation, the amount paid for the current regional Wealth Tax will be deductible from the new “Solidarity” Wealth Tax.
• The government forecasts that this new tax will be imposed on approximately 23,000 taxpayers and the expected revenue will be around EUR 1.5 billion.
• Although it is still uncertain, we understand that non-Spanish residents who own assets in Spain (for example, real estate property) will also be subject to this new tax on their local assets. This same conclusion should apply to tax resident individuals who are subject to the so-called Beckham Regime.
• This announcement has already raised public debate regarding the possibility that the “Solidarity” Wealth Tax may not be compatible with the Spanish Constitution and the legislation that grants the autonomous regions authority to legislate and charge Wealth Tax in their territories. In fact, some parliamentary groups have already announced their intention to challenge the constitutionality of the new tax.

Personal Income Tax (“PIT”)

• PIT rates to savings income (which is applied to income derived from interest, dividends and capital gains) will increase from 26% to 27% for individuals who earn more than EUR 200,000 per year. The rate for annual incomes of over EUR 300,000 will increase by two percentage points to 28%.
• PIT will apply to salaries of EUR 15,000 and over, instead of the current EUR 14,000 and over.
• Also, PIT effective rates will be reduced for wages ranging between EUR 18,000 and 21,000.

Corporate Income Tax (“CIT”)

• For tax periods 2023 and 2024, the offsetting of tax losses of entities belonging to a consolidated tax group will be limited to 50% of their amount. These tax credits will not be lost, but the option to offset them will be postponed for two years.
• The CIT rate for SMEs with a turnover of up to EUR 1 million will be reduced from 25% to 23%.

The time has now come to follow very closely both the publication of the legislative texts and the evolution of the parliamentary process, in order to be able to analyse the implications of this reform and help the taxpayers understand how they could be affected.