Spain is amongst the countries with the least competitive tax system in the OECD. This is according to the new edition of the tax competitiveness ranking prepared by the Tax Foundation, in which Spain appears in 34th place out of a total of 38.
This position, which represents a loss of two places compared to the 2021 edition and eight compared to 2020, leaves Spain ahead of only Ireland, Portugal, Italy and France, which repeats in the last position as it did the previous two years.
Specifically, the Tax Foundation gives Spain a score of 56.9 out of 100. Among the weaknesses of its tax system, it highlights that Spain applies the general VAT of 21% to less than half of the potential consumption tax base, and warns that multiple property taxes “distort with separate levies on real estate transfers, net worth, inheritance and financial transactions”.
On the other hand, among its strengths, it highlights that the Spanish tax system has tax treaties with 95 countries and that it has a 95% exemption for income from foreign dividends and capital gains.
By type of tax, Spain ranks 31st in corporate taxation, 25th in personal taxation, 19th in consumption taxes, 18th in cross-border taxation, and second to last in property taxes.
On this last point, it is worth remembering that Spain is the only EU country that currently has a wealth tax. Meanwhile the only other European countries that have one are Switzerland and Norway. Furthermore, if the parliamentary process is completed, the new solidarity tax will come into force in 2023, as well as the extraordinary taxes on banks and energy companies.