Hit to the businesses: corporate income tax’s express increase
The Spanish Government announced a corporate income tax’s increase without concretising it and it is going against the European’s tide.
The Spanish Government announced that the minimum payments on account’s corporate income tax’s interest rate will be rise to the foreign businesses in order to collect 6.000 million of euro more to comply with the new imposed public deficit goal by the European Commission.
This measure has been announced by the Ministry of Economy, Luis de Guindos, who did not detail how much the tax will be increased. In the Spanish journal Cinco Días, it is pointed out that these decision “means to oblige businesses to advance tax payments!” and that “although it is technically a down payment with short-term neutral impact, during the first applying year it means a de facto tax increasing”.
It seems clear that this future corporate income tax rise is an answer to the more likely European Commission’s fine to Spain for not complying the three-per-cent public deficit goal. This fine could be up to 2.160 million euros, adding to 8.000 million euro cut-budget that Madrid compromise itself to apply after breaching the deficit goal.
With this measure, Spain is going against the tide with respect to other European countries. The United Kingdom announced already last March that the corporate tax would be lowered from 20% to 17% and, after the Brexit, it was stated to be lowered even more, to 15%.
This decision is a clear hit to the businesses in a context where markets are not stabilised due to the complex political environment opened in Europe after the Brexit.
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Del Canto Chambers’ Newsroom