The Secretary of State for Finance, Inà © s Bardón, has advanced this wednesday that they will be established “additional requirements” to enjoy the tax benefits of the ‘sicav‘, such as requiring shareholders a minimum participation of 2,500 euros, for which powers will be granted to the Tax Agency to verify said requirement.
This is what he has advanced during his appearance before the Congressional Budget Committee to report on the draft General State Budgets (PGE) of 2021, in which he has detailed that this measure will not be included in the new public accounts, but in other laws aside, which will include other measures such as the minimum rate of 15% for undistributed profits of the ‘Socimis’.
Bardón has explained that the PGE and the forecasts of income and expenses incorporate the uncertainty factor derived from the health and economic crisis generated by the Covid-19 pandemic, and has ensured that an “expansive approach” is adopted to drive the economic recovery.
Likewise, it has detailed that this year non-financial income will reach 223,208 million, 7.3% less. The PGE project of 2021 contemplates that non-tax income will reach 255,631 million, 14.5% more. Tax revenues will add a figure of 222,107 million euros, which represents an increase of 13% compared to the advance of liquidation expected for this year, after falling 7.6% this year due to the economic crisis. THE
HIGH INCOME AND LARGE COMPANIES
Regarding the tax changes and tax increases, has argued that they are aimed at “high incomes and large companies” and are of “limited scope”, without prejudice to the fact that a committee of experts will be in charge of reviewing the figures to undertake a comprehensive tax reform in the future, because ” You can’t have a first-rate welfare state with third-rate income. “
Among the novelties, he explained that an increase of two points in personal income tax is included for earned income of more than 300,000 euros, raising the marginal rate two points to 47%, and three points for capital income of more than 200,000 euros, up to 26%, which will affect a “reduced” number of 36,194 taxpayers (0.17%) so that “those with the highest income contribute to a greater extent”, helping to reduce the deficit and improve progressivity. He has argued that personal income tax measures are aimed at very high incomes and with great savings capacity.
Breathás, deductions from private pension plans will be reduced individual to 2,000 euros the maximum contribution, while the joint limit of reduction (participant and company) is raised from 8,000 to 10,000 euros in business plans, thereby boosting business contributions and correcting the “regressivity” of these benefits. Likewise, the current limits of the autonomous modules regime are extended.
Also The tax for assets over 10 million increases by 1%, up to a rate of 3.5%; and the exemption in Corporation Tax on dividends and capital gains in subsidiaries is limited to 95%, which affects 1,739 companies (0.12%), except for companies with a turnover of less than 40 million during the first three years. According to Bardón, the measure will affect “fundamentally large companies.”
In turn, the tax on insurance premiums is increased from 6% to 8%, although he has remarked that it will continue in the lower part of the EU and that for third-party insurance of a car it will mean 6.20 euros more per year and for home insurance, about 3.98 euros per year. “Insurance is largely contracted by individuals with high purchasing power, since they are in proportion to the premium, “he added.
Breaths, VAT will be raised to 21% of sugary and sweetened beverages as it is a “social commitment to rationalize responsible consumption in the child and youth population” and to combat unhealthy diets. The limits for the application of the simplified and special regime of agriculture, livestock and fishing are also extended in VAT.
In special taxes, the diesel bonus is reduced which causes “the highest emissions of polluting gases”, with an increase of 38 euros per 1,000 liters and a increase in the state rate from 30.7 to 34.5 cents per liter. However, the taxation of diesel for professional use and subsidized diesel remains unchanged.
He has argued, in turn, that the impact of the rise in diesel will be “very moderate” in the middle pocket and is aimed at higher consumption of high-income and large-displacement vehicles, since calculations point to that 50 liters of refueling will mean 1.9 euros on average, while for an average consumer, it will be 3.45 euros per month. Furthermore, the difference between the discount for diesel and gasoline is 93 euros for every 1,000 liters and Spain is urged to approach the European average.
With all these changes, expects to raise 1,862 million in 2021, 0.8% of total income, so the distortion on the economy “is minimal, if not zero”, and 2,135 million are expected in 2022.
To this will be added changes included in other laws, with 4,223 million more tax revenues, such as the ‘Google’ and ‘Tobin’ rates, the new tax on single-use plastic containers and a new one on waste or anti-fraud law and other measures.
About the ‘sicav” Additional requirements will be established to benefit from its special regime, such as requiring shareholders a minimum participation of 2,500 euros and the AEAT is granted competence to verify the requirement. For the ‘socimi’ a 15% tax will be established for undistributed profits. In 2022, the new measures will contribute 50 million.
Has detailed that lThe ‘Google’ and ‘Tobin’ rates will come into effect on January 18 and now the regulations are being developed; the single-use plastics tax is under consultation and the waste tax is “heavily worked out.”
On the latter, he has pointed out that it derives from the modification of a directive that urges that in 2035 only 10% of municipal waste generated ends up in landfills and there is a “problem” in Spain due to the variety of regional taxes and tourism waste, for which a national strategy will be guaranteed in dialogue with the Autonomous Communities on its management and collection.
He has also referred to the new Law to combat tax fraud, which will contribute 828 million, which limits payments in cash, modifies the land to appear on the list of “defaulters”, among others.
TAX REFORM
The Secretary of State for Finance has reiterated the interest in undertaking a “in-depth” tax reform in line with the economic recovery, in parallel to the technical work seeking a multilateral consensus postponed to mid-2021.
At this point, he indicated that in 2019 Spain was 7.2 points from the Eurozone andn ratio of income to GDP and 6.2 percentage points below in fiscal pressure, In addition, the Budget Plan contemplates a pressure of 37.7% of GDP this year and 36.8% in 2021, still far from the rest of the countries.
With the work of experts to be appointed, Bardón has pointed out that a “much fairer” tax system is being sought, focused on “high incomes and large assets” that incorporates the environmental commitment, adapts to the digital economy of the 21st century and encourage healthy lifestyle habits.
When the economic “damage” of this year can be “measured” and the recovery arrives, the rebalancing plan will be considered as it is now “difficult” due to the different effects of the crisis, he added.
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