3. Tax
  5. Spain: Temporary solidarity tax on large fortunes

Spain: Temporary solidarity tax on large fortunes

21 Nov 2022    2 minute read

In brief

The Socialist Parliamentary Group and the Confederal Parliamentary Group of Unidas Podemos-En Comú Podem- Galicia en Común have registered in the Congress of Deputies the text of the temporary solidarity tax on large fortunes. This amended the articles of the bill for the establishment of temporary taxes on energy and credit institutions and financial credit establishments.

Contents

Main aspects to consider:

  • It would be effective for the two taxable years following the passing of the law. Therefore, if the bill is approved and enters into force this year, the tax will have effects for fiscal years 2022 and 2023.
  • The Family Business exemption and all other wealth tax exemptions are maintained.
  • The joint limit of wealth tax with the personal income tax is maintained, including this new tax. The aggregated amount of those three taxes may not exceed 60% of the individual income taxable base (excluding gains with a generation period of over one year), but with the minimum taxation limit of 20% of the amount of the new tax. Therefore, the minimum effective tax rate for the highest fortunes will be 0.7% (which, for those taxpayers resident in regions where the wealth tax already applies, represents a maximum surcharge of 0.2% with respect to the current taxation under this tax).
  • Contrary to what was anticipated in previous weeks, the new tax will also be payable, in addition to taxpayers resident in Spain (on their worldwide wealth), by nonresident taxpayers and expats (Beckham Law) on the assets they own in Spain. Additionally, neither the minimum exemption nor the joint limit will be applicable to them.
  • The amount of wealth tax effectively paid to the corresponding region (or, in the case of nonresidents and expats, to the state) will be deducted from the amount payable for this new tax.

Furthermore

Another amendment included in the same bill proposes that nonresident taxpayers with companies resident abroad, whose main assets are real estate located in Spain, should be taxed on their participation in such companies both in the wealth tax and the temporary solidarity tax on large fortunes.

In view of the imminent approval of the new tax, we recommend an urgent assessment of its potential impact and the adoption of all necessary measures to adapt the structures of assets and corporate groups.

Spanish version.

Contact Information
Antonio Zurera
Partner
Madrid
Read my Bio
antonio.zurera@bakermckenzie.com
Bruno Dominguez
Partner
Barcelona
Read my Bio
bruno.dominguez@bakermckenzie.com
Lara Purificacion
Associate
Madrid
lara.purificacion@bakermckenzie.com
Davinia Rogel
Legal Director, Tax
Barcelona
davinia.rogel@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