3. Tax
  5. Spain: The introduction of the new tax: temporary tax on solidarity of Large Fortunes and Wealth Tax

Spain: The introduction of the new tax: temporary tax on solidarity of Large Fortunes and Wealth Tax

07 Feb 2023    2 minute read

In brief

With effect from 29 December 2022, the Temporary Tax on Solidarity of Large Fortunes (TSLF) enters into force, accruing on 31 December 2022.

Contents

In focus

The approved text does not include changes to the text initially sent by the Congress of Deputies since none of the amendments presented in the Senate have been accepted.

The key points are as follows:

  • It is a complementary tax to the Wealth Tax (WT) that coincides in its main configuration.
  • It will be applicable to the two fiscal years that accrue after the entry into force of the Law.
  • Therefore, the tax will apply in 2022 and 2023.
  • The Family Business exemption and all other exemptions from the WT are maintained.
  • The same joint limit of TSLF and WT is maintained with the PIT quota. The aggregate quota of all of them may not exceed 60% of the personal income tax base (excluding profits with a generation period of more than 1 year), but with a minimum tax limit or floor of 20% of the TSLF quota. Therefore, the minimum effective tax rate for the highest assets will be 0.7% (which, for those taxpayers resident in Autonomous Communities in which the WT was already applied, represents a maximum surcharge of 0.2% compared to the current taxation under this tax).
  • It will be required, in addition to taxpayers resident in Spain (on their worldwide assets) both Non-Resident and Impatriate taxpayers (Beckham Law) for the assets they own in Spain. Additionally, the exempt minimum or the joint limit will not apply to them.
  • The WT fee actually paid to the corresponding Autonomous Community (or, in the case of Non-Residents and Impatriates, to the State) will be deducted from the one that corresponds to pay for this tax.

The approved text also provides for the amendment of the WT Law so that non-resident taxpayers with companies domiciled abroad whose main asset is real estate located in Spain will be taxed for their participation in such companies in both the WT and the TSLF.

Contact Information
Rodrigo Ogea
Partner
Madrid
rodrigo.ogea@bakermckenzie.com
Bruno Dominguez
Partner
Barcelona
bruno.dominguez@bakermckenzie.com

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.

HighQ
Copyright Baker McKenzie 2024 | Disclaimers | Supplemental Privacy Statement