B Law & Tax
29 December 2023

Tax Advisor: Tax Updates: Extension of the Wealth Solidarity Tax on High Fortunes in Spain

The government has extended the Wealth Solidarity Tax on High Fortunes until a “review of wealth taxation” is carried out in the autonomous communities, linking it to the reform of the regional financing system.

According to the statement from the Ministry of Finance and Public Function after the approval by the Council of Ministers of a decree-law extending various measures to address inflation, this extension includes the temporary tax that overlaps with the wealth tax collected by the autonomous communities.

In this way, the government introduces an element of pressure in negotiations on the reform of the regional financing system by extending this levy until an agreement is reached in this area, despite objections from some regions.

 

Characteristics of theWealth Solidarity Tax on High Fortunes

The wealth solidarity tax applies to fortunes exceeding 3 million euros, with a minimum exemption of 700,000 euros and deductions similar to the wealth tax. It is deductible in the regional wealth tax, especially relevant in regions with bonuses. It conforms to the economic agreements of the Basque Country and Navarra. The accrual is on December 31st each year, impacting the wealth in 2022 (paid in 2023) and 2023 (paid in 2024), extending to 2024 (payable in 2025). The percentages vary: 1.7% for wealth between 3 and 5.4 million, 2.1% between 5.4 and 10.7 million, and 3.5% for over 10.7 million.

 

The Government extends the exemption from thE Wealth Solidarity Tax on High Fortunes to non-residents.

The Government has decided to extend the application of the Temporary Tax on High Fortunes until a review of wealth taxation is carried out in the autonomous communities, linking it to the reform of the regional financing system.

According to recent data, the collection in 2023 was 623 million euros, mainly in Madrid. A total of 12,010 high fortunes, 0.1% of taxpayers in Spain, paid this tax, complementary to the wealth tax, with an average fee of 52,000 euros. To avoid double taxation, a deduction is applied in the solidarity tax equivalent to the amount paid in the Wealth Tax.

 

In summary:

The government has extended the Temporary Tax on High Fortunes until a review of wealth taxation in autonomous communities, linking it to the reform of the regional financing system. The decision puts pressure on negotiations. The tax applies to fortunes over 3 million euros, with deductions similar to the wealth tax and is deductible in regional taxes. It conforms to economic agreements in the Basque Country and Navarra. The accrual is annual on December 31st, extending until 2024. The collection in 2023 was 623 million euros, with 12,010 contributors. Additionally, the government extends the exemption from the tax on high fortunes to non-residents.

 

 

 

 

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