Wealth tax can be deducted in case of large wealth even if you have not paid it

The wealth tax levy can be deducted from the provisional tax on large wealth, even if it is not paid, a presumption that benefits taxpayers in subsidized autonomous regions, but that experts do not foresee this having a major impact on the collection.

Temporary solidarity tax for wealth of three million euros must be presented between July 1 and 31in accordance with the order of the Ministry of Finance published this week in the Official Gazette (BOE), which approves the settlement model without introducing any new features in relation to what is established by the tax law.

The lack of novelty means keeping the tactical error that crept into the text of the law, which ERC and EH Bildu detected in the Senate and which the Government tried to correct in the ministerial order, although it did not finally do so after the Council of the Council of the opinion of the state that violated the law “obviously and through a completely inappropriate channel,” according to an opinion published in the BOE on June 8.

ERC and EH Bildu presented an amendment to the Senate to avoid maintaining in the new tax differences in taxation between autonomous communities that subsidized the wealth tax and those that did not, “reducing the effect of the required adjustment”, but not to enact it in order to avoid delayed its approval in parliament.

Among the objectives of the solidarity tax was precisely the taxation of the property of the autonomous communities in which the autonomous wealth tax is subsidized (100% in Madrid and Andalusia, and 50% in Galicia).

However, when setting up the calculation of the full quota, it is not specified that the applicable reduction for what has already been paid in regional heritage tax applies only to the amounts actually paid, which will allow Andalusians and people from Madrid to reduce the theoretical heritage quota even if they have not paid not a single euro.

Sources from the Ministry of Finance explain that it is a “technical” matter and that we will “see” how the July collection will take place “given that it is a new tax”, for which the Government initially determined a potential collection of HRK 1,500. million euros before applying the regional reduction.

REAF’s fiscal advisory economists do not believe this issue will lead to a significant loss of revenue.

REAF technical secretary Luis del Amo explains to EFE that the calculation of the new tax also depends on what is paid for income tax and that in any case all taxpayers liable to pay taxes will pay a minimum of 20% of the feeConsidering the maximum reduction established by law is 80%.

In particular, the compensation payable is calculated taking into account that the sum of the full amounts of income tax, property tax and large wealth cannot exceed 60% of the tax base of income tax, subject to a maximum reduction of 80%. the amount to be paid.

In this way, the calculation is more favorable for those with small incomes compared to much larger wealth.

Del Amo reminds that the same restrictions apply to the regional wealth tax, because “it would be confiscatory if all the revenue had to be used to pay the wealth tax.”