The final configuration of the solidarity tax on large fortunes will cause the Treasury to collect at least 20% less than was initially estimated, which was 1.5 billion a year, according to initial calculations by tax experts consulted by La Vanguardia.
The ministerial order that sets the settlement criteria, published yesterday in the Official State Gazette (BOE) for payment in July, benefits riches from Madrid, Andalusia and Galicia, where the property tax is fully subsidized or 50%
Tax legislation provides for a limit to prevent a wealth tax from being confiscatory. Property tax and personal income tax quotas cannot exceed 60% of the taxpayer’s income. But the tax on large fortunes has as a limit the share of the tax on the patrimony without bonus. In this way, a taxpayer from the Community of Madrid (where the full share of Patrimony was 1,795 million in 2020), can include the amount in the limit even if he is not currently paying for the tax.
ERC and EH Bildu tried to solve the situation in the Senate through an amendment so that taxes on large fortunes and on patrimony would have a “parallel liquidation route”. They proposed that they only interact “when setting the quota by deducting the liquid quota entered as an asset”.
José Luis López Hermida, director of KPMG’s private client and family business area, explains that the final ministerial order “could entail the application of a reduction in the initial rate of the tax on large fortunes”, the which would have an impact on collection. Eduardo Gracia, head of Ashurst’s tax area, adds, for his part, that it is an “error” that was not resolved due to “the rush” to close the processing of the new tax.
The Council of State, meeting on June 8, unanimously issued an opinion in which it reflected the problems of the new tax in black and white. The advisory body pointed out that, although a ministerial order cannot modify a law, the Government should have taken into account that it was not appropriate to “remove from the full share of the tax on large fortunes the corresponding share of patrimony”.
A spokesman for the Tax Agency points out that the ministerial order “complies with the law”. Regarding the decrease in collection, he adds that “a potential estimate was made, but it must be taken into account that it is a new tax and that it will be necessary to see how it evolves”. Socialist sources explain that the aim was for the tax to enter into force before the end of the year so that it can be settled in 2022.
