The Ministry of Finance has announced a series of tax measures, which will be incorporated into the 2023 General State Budget or into legislation enabling their implementation next year. These measures will target large fortunes, large corporations, and key taxes such as Personal Income Tax (IRPF) and Corporate Income Tax.
We would like to inform you that the Ministry of Finance has presented a package of tax measures aimed at social justice and economic efficiency. These measures are intended to be incorporated into the 2023 General State Budget or into legislation that will allow their implementation next year.
To implement these measures, the government intends to reduce VAT on electricity, natural gas, and wood, and eliminate it on certain healthcare products such as supplies, vaccines, and tests. It also plans to tax large fortunes and corporations while simultaneously reducing the tax burden on low-income earners.
Let's look at what these measures are, although it should be noted that they have not yet been approved and changes may occur.
New solidarity tax on large fortunes
Among the measures included to increase contributions from the wealthiest is the announcement of a Solidarity Tax on large fortunes, which will affect net worth exceeding €3 million. To avoiddouble taxation, those subject to the Solidarity Tax will only be taxed on the portion of their wealth not already taxed by their Autonomous Community.
The tax rate will be 1.7% for assets between 3 and 5 million euros; 2.1% for assets between 5 million and 10 million euros ; and 3.5% for assets exceeding 10 million euros .
This is a temporary state tax for the years 2023 and 2024, although a review clause will be included to assess at the end of its term whether it should be maintained or eliminated. The potential number of affected taxpayers is 23,000, representing 0.1% of the total, and the potential revenue impact reaches €1.5 billion.
Personal Income Tax
Measures are also included in the Personal Income Tax (IRPF) to advance the objective of reducing the taxation gap between capital income and labor income.
To this end , the tax rate on capital gains between €200,000 and €300,000 is increased by one percentage point to 27% . Likewise, the tax rate on capital gains exceeding €300,000 is raised to 28%
Similarly, to help taxpayers who need it most, the Government will expand the current reduction for employment income. Currently, this tax benefit applies to gross income up to €18,000, and the reduction will be extended and increased to include taxpayers with a gross employment salary of €21,000.
The reduction for employment income will apply to gross salaries between €15,000 and €21,000. Thus, the minimum taxable income for a single taxpayer with no children rises from €14,000 to €15,000. This guarantees, for example, that a worker currently earning the minimum wage (SMI), set at €14,000, will not pay income tax (IRPF) when the government increases the minimum wage in 2023. In the case of an employee with two children filing a joint tax return, the minimum taxable income increases from €18,000 to €19,000 due to the increased reduction for employment income.
On the other hand, the General State Budget Law for 2023 will include an additional reduction in Personal Income Tax of five percentage points in the net income of modules.
Furthermore, self-employed individuals who pay taxes under the simplified direct estimation method currently benefit from an automatic 5% reduction of their net income, up to a maximum of €2,000 per year. This includes what are known as deductible expenses that are difficult to justify. This reduction percentage will increase to 7% in the next General State Budget.
Furthermore, the current exclusion limits for the simplified tax system will also be extended for another year. This decision means that more taxpayers will be able to continue paying taxes through this system.
Corporate Income Tax
Following this line of thought, it has been announced that a regulatory change will be promoted in the Congress of Deputies that will limit by 50% the possibility of offsetting losses in consolidated groups. This is not a tax increase, but rather a deferral of the possibility of offsetting negative tax bases. It would also be a temporary measure for the years 2023 and 2024 , affecting only 3,609 companies, representing a mere 0.2% of those filing Corporate Income Tax returns.
On the other hand, to also alleviate the situation of small businesses, the nominal rate of Corporate Income Tax will be reduced from 25% to 23% for SMEs with a turnover of up to one million euros, a measure that aims to benefit 407,384 companies.
VAT
A reduction in VAT from 10% to 4% will also be approved for feminine hygiene products (pads, tampons, panty liners), condoms and non-medicinal contraceptives.
CONCLUSIONS
In summary, the following diagram reflects all the new measures that are intended to be implemented.
Increases:
- New solidarity tax on large fortunes.
- Increase in personal income tax on capital gains above 200,000 and 300,000.
- Limiting negative tax bases for large companies.
Sales:
- Income exempt from personal income tax is increased from 14,000 to 15,000.
- Income tax reduction for incomes between 15,000 and 21,000 euros.
- Additional 5% reduction in the net income of modules for the self-employed.
- The reduction for deductible expenses in the direct estimation regime is increased to 7%.
- Reduction of the nominal corporate tax rate from 25% to 23% for SMEs.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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