“Spain’s large fortunes will have to contribute more to alleviate the energy and inflation crisis”
Will the application of the Solidarity Tax on Large Fortunes really be effective?
- The object of the tax and its temporal scope
The regulation of this tax is aimed at directly improving the country’s economic position. Introduced on 10 November of this year, it is intended to be temporary and applicable for two financial years.
As for the validity of this tax, the reader should note that it will be in force from this very financial year if the law itself is published. In this case, the first self-assessment would be set between May and June 2023. We should not fail to mention the taxable event of this tax, which, in this case, is the ownership by individuals of a net worth of more than €3,000,000, being a direct, personal and complementary tax to the Wealth Tax. It is payable on 31 December of each year.
Without wishing to go much further into this issue, it should be noted that the tax base of the tax is made up of the taxpayer’s net worth. Likewise, the final objective is to increase tax collection and to harmonise the regulations of the autonomous regions.
- Subjects affected by this tax and basic questions
Fundamentally, the tax to which we are referring in this article will have a greater impact on those individuals resident in the autonomous communities whose IP is subsidised. Taxpayers who are tax residents in Spain will be able to reduce their taxable base by the minimum exempt amount of €700,000. Another of the basic issues introduced as a result of this is that, when the sum of the total personal income tax, wealth tax and Solidarity Tax payments is greater than 60% of the personal income tax base, the Solidarity Tax payment will be reduced until it reaches this limit.
This tax also affects foreign companies, which will be subject to the new tax. The last of the taxes to which we will refer in this document is the Wealth Tax, which directly affects the Solidarity Tax.
- Measures to reduce their impact
The purpose of this section is simply to inform the reader about some of the questions to be asked. As this tax depends on personal circumstances, we can ask some questions such as: what is the structure of your income? or who are the members of the family group? In order to answer these questions, an exhaustive analysis of the particular situation of each taxpayer must be carried out, as this tax is direct and personal.