The tax on the great wealth will collect half of what was expected due to a mistake by the Ministry of Finance

New legal assessment and collection by the Ministry of Finance. The approved model for abolishing the solidary tax on large fortunes contains a real slip that will lead to lower state revenues than originally estimated. First of all because it will release a large part of its payments to taxpayers in communities such as Galicia, Madrid or Andalusiafor which this rate is precisely designed, given that these are the regions that currently give more generous bonuses to their high net worth.

The key to the error is in the so-called tax shield, whereby the payment of tax (calculated by summing up income tax, property and solidarity quota) may in no case exceed 60% of the income tax base. “If this percentage is exceeded, the joint tax quota is reduced to 80%,” the Independent Authority for Fiscal Responsibility (AIReF) reminds. The text of the final settlement model published this week in State official gazette (BOE) implies that the super rich will be able to calculate how much they would have to pay for wealth tax without the bonus, and not just the amount that they would really have to pay if they are, for example, in Madrid or Andalusia, where it is 100% discounted — that is, they would not have to pay anything — or in Galicia, where it is 50%. Thus, it will be much easier to reach the 60% that allows access to the deduction.

The government tried to change this mistake at the time through a model ministerial order. However, he got a real pitcher of cold water when last week state council issued an opinion making it clear that what the executive branch considered a “mere clarification” actually implied contrary to the law on inheritance and great wealth “Obviously and through a completely inappropriate channel, both from the perspective of the normative scope of the provision and from the guarantee of legal certainty.”

In this context, the Ministry of Finance was forced to leave the text unchanged, so that will collect less than estimated with the tax to be paid from July 1 to 31 of this year, in the full election month. In its predictions, the executive aimed to collect about 1,500 million euros a year with the tax, which was initially temporary. However, the tax experts consulted are more in agreement with the forecasts of AIReF, which believes that the reduction of the quota will mean that the effect will be limited to around 700 million euros, less than half of the estimate. The tax, which was designed to compensate for bonuses applied in some communities of the People’s Party, Thus, it will lose a good part of its effectiveness on assets of more than three million euros (with an exemption for the first 700,000 euros). Specifically, the applied rate is 1.7% between 3 and 5 million euros; 2.1% between 5.3 and 10.6 million; and 3.5%, superiors.

In principle, the wealth collected in 2023 will be taxed this year, and the wealth created in this year next year. But his tenure will depend, and to a great extent, on the result of the July 23 general election. Second Vice President and labor minister herself, Yolanda Díaz, yesterday presented Sumar’s economic proposal which, among other things, will also focus on the great wealth, for those who claim that the tax is permanent.