Opportunity to recover Wealth Tax 2021-2022
Everything indicates that the Constitutional Court will issue a ruling on the constitutionality of the Wealth Tax for the years 2021 and 2022.
In the fiscal year 2021, the Wealth Tax, through the General State Budget Law (“ Ley de Presupuestos Generales del Estado”), suffered an increase in its rate to 3.5% and also acquired the character of indefinite when the 100% rebate approved in Royal Decree-Law 13/201 was repealed.
The General Budget Law for the year 2021 was the object of an appeal by the Popular Party and the Catalan Employers’ Association (Foment del Treball) with regards to the Wealth Tax, with two fundamental arguments, respectively:
- a) The elimination of the 100% rebate meant in practice the establishment of a new tax, which cannot be articulated through General Budget Laws, by virtue of Article 134.7 of our Constitution.
- b) Principle of non-confiscatory nature of the tax, since the maximum rate of 3.5% is above the legal interest rate of money, which rose to 3.25% in 2021 and 2022.
In the event that the courts accept these appeals, the tax would be declared null in the years 2021 and 2022 and, therefore, the Administration would be obliged to refund the amounts paid to the taxpayers, provided that they had been requested.
We do not know the exact date on which the Constitutional Court will issue its decision, although it is expected to be soon. As in the case of the Plusvalía municipal, it is likely that the Court will only leave the ruling in effect for those taxpayers who had requested the refund prior to the date of the ruling, so the filing of appeals is urgent.
In case you would like more information, MDG Advisors will be pleased to advise you and help you to file the challenge.
MDG Advisors team
