Treasury raises nine taxes this year

The government’s refusal to deflate the income tax rate has allowed Spain to close the year 2024 with a record tax collection, close to €300 billion. This does not prevent the government from proposing new tax increases in 2025. Some have already come into effect on January 1. Others will do so in the coming months:

– Corporate Tax: Multinational companies with a turnover of more than €750 million will pay a minimum rate of 15%. Additionally, deductions are reduced to bring the effective rate closer to the real rate. Measures approved by previous governments that have caused million-euro refunds due to annulment of regulations in courts are also being corrected.

– Bank Tax: This taxes the interest margin and commissions of banks operating in Spain with a progressive rate of 1% to 7%.

– Hydrocarbon VAT: To prevent fraud in sales, controls are being strengthened. This is a measure demanded by large companies.

– Personal Income Tax on Capital Income: Income over €300,000 will be taxed at 30% instead of 28%.

– Personal Income Tax on Labor Income: Deflating the rate would soften the impact of rising prices on workers. This has been a key issue for the PP since the inflation crisis; the government dismisses it.

– Tobacco and Electronic Cigarettes: The goal is to combat the increase in tobacco consumption in all its forms, especially among youth. The Treasury assures that it is not a revenue-generating tool.

– Electricity VAT: The usual rate of 21% is reinstated regardless of user tariffs.

– Food VAT: Essential products return to a super-reduced rate of 4%, including olive oil, which has been taxed at 0%.

– Waste Tax: This new tax will come into effect in April and will be charged by all local entities. It will cover the costs of waste collection, transportation, and treatment, and will include discounts.

– Diesel Tax: The Treasury includes the increase in the hydrocarbon tax on diesel in the tax changes. It would come into effect in April, but the government currently lacks the votes to approve it.

– Energy Tax: The decree approved in December does not have support for validation and will lapse in the coming days.

The Treasury aims to raise about €4.5 billion more per year, as communicated by the government to Brussels in the structural fiscal plan of October. On the first day of the new year, some aids to combat inflation that have been in effect for the past few years have also come to an end, although transport subsidies remain unchanged for another six months. All of this is pending to see if the government presents the General State Budget bill and includes new tax measures in it.

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