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Summary of the Main Tax Measures Contained in the General Budget Law Draft of the State for the Year 2021
Personal Income Tax
A higher income tax is introduced starting at € 300,000, going from a general state rate of 22.5% to 24.5%. And as regards the so-called savings rate (which affects the majority of returns on movable capital and capital gains), in the base part of savings that exceeds € 200,000, it is taxed from 23% to 26% .
Likewise, the general limit applicable to the tax base of contributions and contributions to social security systems will be reduced from up to € 8,000 of contribution to only € 2,000 (the limit of 30% of the sum of income from work and economic activities). However, the previous limit can be increased by € 8,000 if said increase comes from business contributions.
Self-employed persons in modules are expressly authorized to continue applying the objective estimation method to calculate the net return on their economic activity, also avoiding an increase in their formal and billing obligations. To this end, the quantitative limits that define in the Personal Income Tax the scope of the objective estimation method are extended for the 2021 tax period, with the exception of agricultural, livestock and forestry activities, which have their own quantitative limit by volume of income.
In the Corporation Tax, the precept that regulates the exemption on dividends and income derived from the transfer of securities representing the equity of resident and non-resident entities in Spanish territory is modified to provide that the management expenses related to such participations are not deductible from the taxpayer's taxable profit, establishing that their amount is 5 percent of the dividend or positive income obtained, so that the amount that will be exempt will be 95 percent of said dividend or income.
With the same purpose, the article that regulates the elimination of international economic double taxation on dividends from non-resident entities in Spanish territory is modified.
This regulation is in accordance with the power that, in accordance with the provisions of Council Directive 2011/96 / EU, of November 30, 2011, relative to the common tax regime applicable to parent companies and subsidiaries of different Member States, retain the Member States to provide that the management expenses related to the participation in the subsidiary entity are not deductible from the taxable profit of the parent company, and can be fixed at a flat rate without, in this case, their amount exceeding 5 percent of the profits distributed by the subsidiary company.
For systematic reasons, this measure has been projected on all the provisions of the Tax Law which, likewise, eliminate double taxation in the receipt of dividends or profit shares and of income derived from the transfer.
With the theoretical purpose of allowing the growth of companies that have a net turnover of less than 40 million euros and that are not part of a commercial group, such taxpayers will not apply the reduction in the exemption of dividends before indicated, for a period limited to three years, when they come from a subsidiary, resident or not in Spanish territory, established after January 1, 2021.
On the other hand, the exemption and elimination of international double taxation on dividends or profit shares and on the income derived from the transfer of shares in the capital or equity of an entity whose acquisition value is higher is abolished. to 20 million euros, in order to limit the application of these measures to situations in which there is a significant percentage of participation of 5 percent, regulating a transitional regime for a period of five years.
The regulation of the limitation on the deductibility of financial expenses is also modified by eliminating the addition to the operating profit of financial income from equity instruments that correspond to dividends when the acquisition value of said equity is greater than 20 million euros. euros.
Finally, and although it would not formally form part of the preliminary draft analyzed, due to its importance we include the intention to reinforce the control of SICAVs by granting the Tax Agency Inspection and not the CNMV the competence to verify that these instruments meet the requirements for become vehicles for collective investment and not a simple tool for tax planning of large assets. Likewise, they want to impose a 15% tax on their undistributed profits as dividends to their partners.
Non-Resident Income Tax
The exemption for interest and other income obtained from the transfer of own capital to third parties, as well as capital gains derived from movable property obtained without the mediation of a permanent establishment, is adapted to the provisions of the Agreement on the European Economic Area, so that States that are party to the aforementioned Agreement can benefit from the exemption in the same way as the Member States of the European Union.
Likewise, and in line with the measure introduced in Corporation Tax, the exemption relating to profits distributed by subsidiaries resident in Spanish territory to their parent companies resident in other member states of the European Economic Area or to permanent establishments is modified. of the latter located in the European Economic Area, eliminating the possibility of accessing the exemption when the acquisition value of the participation exceeds 20 million euros, leaving as a requirement the requirement of a direct and indirect participation, of at least minus 5 percent, provided that the remaining conditions established in the revised text of the Tax Law are met.
In the Wealth Tax there are two measures that are introduced:
The first is the increase in the tax rate applicable to the last tranche of the rate and that involves moving from a taxable base of € 10,695,996.06 from a current rate of 2.5% to a rate of 3.5% .
The second is the consolidation of the indefinite nature of its lien, which will no longer require its express approval year after year.
Value Added Tax
The tax rate applicable to beverages containing added sweeteners, both natural and sweetener additives, is modified, and they are now taxed at the general tax rate of 21 percent.
And similar to the aforementioned measure of maintenance of modules in personal income tax, the limits for the application of the simplified regime and the special regime of agriculture, livestock and fishing, in the Value Added Tax are extended for the 2021 tax period.
Tax on ITP and AJD
The scale of taxation of titles and nobility applicable in the Tax on Patrimonial Transmissions and Documented Legal Acts is updated by 2 percent.
Special Taxes and Taxes on Insurance Premiums
The tax rates of the Tax on Hydrocarbons applicable to automotive fuels used for road transport are increased without the taxation that falls on diesel for professional use and subsidized diesel not suffering any variation.
Likewise, the rate of tax on Insurance Premiums is raised from 6% to 8%.
New epigraphs or groups are created in the Rates of the Tax on Economic Activities, in order to specifically classify:
- the activities of commercialization of supplies of a general nature (electricity and gas), which to date lack such classification,
- the large commercial areas that are not mainly dedicated to clothing or food and that until now lacked their own heading, so that they are treated similarly to other shopping centers, within Group 661, “Mixed commerce integrated into large surfaces "
- the new activity of supplying energy to electric vehicles through recharging points installed either on public roads, gas stations, public and private garages or in any other location.
The amount to be demanded for those with a fixed amount is increased by 1 percent, except those that have been created or specifically updated by regulations issued since January 1, 2019, in order to adapt that to the increase in costs of the provision or performance of the services or activities for which they are required. However, the amounts of the fees on gambling, set out in Royal Decree-Law 16/1977, of February 25, which regulate the criminal, administrative and fiscal aspects of games of luck, stake or chance and bets.
The rates payable by the Central Traffic Authority shall be adjusted, once the coefficient indicated above has been applied, to the nearest euro cent higher or lower, depending on the nearest, when the amount originated from the application consists of three decimal places.
The quantification of the parameters necessary to determine the amount of the rate for reservation of the public radioelectric domain is maintained in general.
In the field of railway rates, the rates for railway company license, for granting of safety authorization and safety certificate, for homologation of centers, certification of entities and rolling stock, granting of titles and authorizations of entry into service are updated and for the provision of services and activities in the field of railway safety.
The basic amounts of port charges are also maintained. Bonuses and corrective coefficients applicable in ports of general interest to occupancy, ship, passenger and merchandise rates are established, as well as the corrective coefficients applicable to the fixed rate for the reception of waste generated by ships. in accordance with the provisions of the Consolidated Text of the Law on State Ports and the Merchant Marine, approved by Royal Legislative Decree 2/2011, of September 5.
One of the things Mr. Balcells like most about his job is when you get a safe, legal and fair tax situation for the sake of the taxpayer's tranquility and economy, both in previous structuring and planning, and when certain criteria have to be defended before Tax administration.
As a lawyer, he always try to put himself in the place of the one who asks for advice, so that all the options or alternatives that are considered as solutions, are those that would adopt at a personal level if the interested party is himself.