B Law & Tax
21 August 2023

Tax advisor: Madrid is supportive in financing despite having lower taxes

According to a report published by the Foundation for Applied Economics Studies (Fedea), the Community of Madrid leads in both tax collection and contributions to the regional financing system. The Minister of Economy, Finance and Employment, Rocío Albert, emphasized that, despite having the lowest taxes, Madrid is the most supportive autonomous community in Spain.

The financing system operates on the basis of redistribution, allowing regions with lower income levels to receive additional resources that exceed their tax revenues by nearly 20,000 million euros. The Central State contributes around 11 billion euros, while the regions with higher per capita income, such as Madrid, Catalonia and the Balearic Islands, together contribute 9 billion euros.

According to data from the Fundación de Estudios de Economía Aplicada, the Community considers the Catalan model as the most appropriate for financing services, since it allocates 8% of its tax revenues to this approach.

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