B Law & Tax
22 June 2023

Tax advisor: The mechanism for the compensation of the Local Real Estate Tax exemption of rustic nature defined

The Resolution of June 9, 2023, issued by the General Secretariat of Autonomous and Local Financing, has been published in the BOE of June 14, 2023. This resolution establishes the procedure for the compensation of the exemption in the Rustic Real Estate Tax for the year 2023, as indicated in article 12 of Royal Decree-Law 4/2023, of May 11. The entry into force of said Resolution will be June 15, 2023.

The published Resolution establishes the requirements and the procedure to grant the exemption mentioned in article 12 of Royal Decree-Law 4/2023, dated May 11. This exemption refers to the installments of the Local Property Tax (IBI) of rustic nature corresponding to the fiscal year 2023. The exemption applies to real estate owned by the owners of agricultural or livestock farms and intended for the development of such activities. In order to benefit from the exemption, taxpayers must have experienced a specific reduction in the net income from agricultural or livestock farming activities during that fiscal year. In addition, the aforementioned Article 12 also contemplates the possibility of refunding IBI installments already paid by taxpayers.

Royal Decree-Law 4/2023, dated May 11, establishes that the reduction of income in local taxes due to Real Estate Tax (IBI) quotas declared exempt in accordance with Article 12 of said decree will be compensated using funds from the General State Budget, as established in Article 9 of the Revised Text of the Law Regulating Local Treasuries. On the other hand, Article 112 of the General State Budget Law (LPGE) 2023 grants the General Secretariat of Autonomous and Local Financing the authority to issue the corresponding resolution, which will establish the models with the necessary information and will regulate the procedure to submit the documentation telematically and sign it electronically. In this sense, the Resolution of June 9, 2023 regulates the request for compensation to the State for tax benefits granted by city councils, island councils and cabildos, provincial councils and autonomous communities.

In this context, the Resolution establishes that local entities must submit a request for compensation, which must be electronically signed by the mayor or by the person responsible for the body in charge of IBI tax management. In the request, the amount of the compensation requested must be explicitly indicated. Likewise, it is required to attach the documents mentioned in the third article of the Resolution, which must be electronically signed by the comptroller or the secretary-comptroller of the local entity, or by an equivalent position of the body responsible for the management of the tax. Once the necessary verifications have been carried out, the General Secretariat of Autonomous and Local Financing will issue a resolution in which the amount corresponding to the appropriate compensation will be determined.

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