MADRID | As reported by the daily newspaper Expansión in Tuesday’s edition, the reactivation of the property tax will be added to the increase of the personal income tax in Catalonia and in the autonomous region of Asturias creating a joint effect of more than 60%. Experts warn that these regions are susceptible to relocation and capital flight.
The increase in personal income tax has placed Spain among the countries that most levy on labour income in the world. The top marginal rate (52%) is the third highest in the European Union after Sweden and Belgium, and third in the world, following Aruba. In addition, any Spaniard will pay more income tax than any citizen of any of the major countries.
Only Sweden rises above Spain in this classification. If one adds the autonomous region rates that some regions have added to the upper tax tier, one can see that the top marginal rate of Catalonia has gone up to 56%; Asturias’ and Andalusia’s have reached 55.5%, while Extremadura’s and Cantrabria’s have gone up to 55%. This
“converts them into the regions with the highest marginal rate in Europe, with Sweden as the sole exception (56.6%),” says a report by the Instituto Juan de Mariana that Expansión has advanced.
However, most of the regions have reactivated the property tax. The only regions that have not done so are Madrid, Valencia and the Balearic Islands. Thus, the reactivation of this tax must be added to the increase in income tax since these produce a joint effect that in the case of Catalonia and Asturias could exceed 60%. That is to say: the tax payers who have a higher income and have property in these two autonomies could have to pay the equivalent of 60% of their total return; in other words, for every 100 euros generated, these citizens would have to pay 60 in taxes.