Spanish corporate tax will grow

Spanish corporate tax will grow up to more than 20%

The Spanish government still has not specified a figure but assures it will be up to 20%. The public deficit’s compliance with Brussels it is an uthopy.

The Spanish caretaker government has notified to the Fiscal Responsability Indepedent Authority (AIReF) that the new corporate tax’s fractioned payment’s rate will permanently be up to 20%.

This new increase had been announced weeks ago but the government had not specified how much. Although it has not given a precise figure by now, it does recognise that, at the very least, will be up to 20%. With this measure, the government are trying to collect 6.000 million euro more in order to comply with the agreed public deficit’s goal with Brussels, which it will not likely have complied due to the corporate tax’s raising drop.

In this regard, AIReF is pointing out that with this measure it is going to get avoid that collection’s lowering even if this new fractioned payment’s rate application is advanced in December.

AIReF is also noticing that the Public Administration’s deficit could be increased up to 4.7% of Spanish GDP if this new fractioned payment is not applied but, even doing it, the deficit will not be lowered less than 4.1%. In other words, it wll be impossible to comply with the agreed public deficit’s goal with the European Union.

Among the factors that have cause this government’s decision are the negative inflation and the tax reform’s impact. In the first one, as the price levels are not recovered yet, the State have collected less amount of money for the raised taxes, while in the second one, these taken steps in the tax reform field have provoked a collecting lowering in both corporate tax and income tax (IRPF).

In any case, this corporate tax’s fractioned payment’s raising application cannot be established until there will be a new government because the current caretaker one has no competence for it.

Applying such a drastic increase in the corporate tax’s fractioned payments rate not only represents a de facto corporate tax’s upload but it could slow the Spanish growth’s perspectives down that, even though they have been important (3.2% in 2015), they are still not consolidated. Bad news, for instance, for taxpayers.

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Del Canto Chambers’ Newsroom

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