New Solidarity Wealth Tax for high net worth individualsLeave a Comment
At the end of September, Spain announced a package of new measures to be included in the General State Budget Bill for 2023.
One such measure was the Solidarity Wealth Tax.
“Solidarity” Wealth Tax
This will be a temporary tax and will apply for 2023 and 2024 at the end of which it’s success will be reviewed.
The tax will be levied on individuals with net assets valued at over €3m.
The rate of tax will be:
|In excess of €10m||3.5%|
As you may be aware, the autonomous regions already apply a Wealth Tax to their residents. As such, n order to avoid double taxation, the amount paid under the existing Wealth Tax regime will be credited against the new “Solidarity” Wealth Tax.
It is anticipated that this new tax will be paid by around 23,000 taxpayers. The expected revenue to be raised from these new measures is around €1.5b.
Although not yet confirmed, it is understood that non-Spanish residents who own assets in Spain will also be subject to this new tax on those assets.
It should be noted that some parliamentary groups have already announced their intention to challenge the constitutionality of the new tax.
Other tax announcements
- Personal Income Tax (“PIT”) rates on savings income will increase from 26% to 27% for individuals who earn more than €200k per year. In addition, the rate for annual incomes of over €300k will increase to 28%.PIT will apply to salaries of EUR 15,000 and over, instead of the current EUR 14,000 and over.
- Also, the effective rate of PIT will be reduced for wages between EU€18-21k.
- There will also be changes to Corporate Income Tax (“CIT”) including the restriction on certain losses. In addition, the CIT rate for SMEs with a turnover of up to €1m will be reduced from 25% to 23%.
If you have any queries about Solidarity Wealth Tax, or Spanish tax matters in general, then please do get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.