Andalusia To Scrap Wealth Tax From Wednesday
Spain News
Published: 20 September 2022 15:39 CET
Andalusia is to scrap wealth tax from tomorrow, September 21, 2022, in a bid to attract high-income earners and investors to the region.
From Wednesday, those who reside in Andalusia along with non-resident homeowners in the region, and who have worldwide assets of more than €700,000, will receive a 100% reduction on the tax commonly known as ‘Impuesto de Patrimonio’.
Although each of Spain’s 17 autonomous regions may set its own tax deductions, up until now, Madrid was the only one that offered tax breaks for wealthier citizens.
According to the Andalusian President, Juanma Moreno (pictured), the tax has been “an obstacle for investment” into the region and stressed that it would not have a major impact on tax revenues in the region as it only accounted for around 0.6 percent of the €95 million collected annually.
Moreno said that to counteract any lost revenue, the new fiscal legislation would attract around 7,000 new high-earners to the region with the 0.6 percent eclipsed by the amount of income tax and other indirect taxes the individuals would be paying.
It’s thought that 10 of the top 20 wealthiest taxpayers in 2019 had left the region by 2020, costing the Junta de Andalucia around €18 million in lost revenue.
The President said that the move would help to attract high-earning taxpayers to the region who would spend long periods in Andalusia and set up permanent residence there.
“The aim of this is that certain high earners become residents in Andalusia and thus pay their taxes in the region, as well as making Andalusia the region with the least taxes together with Madrid.
“This will help us to develop economic activity and employment,” he told journalists.
Around 20,000 people in Andalusia are thought to have paid wealth tax in 2021.
Tax breaks not just for the wealthy
According to Moreno, the Junta would also be reducing the amount of income tax (IRPF) paid by the region’s less wealthy citizens.
The plan will be to reduce the income tax rate by 4.3%, which is above the amount the central government believes that salaries will rise by. This, said Moreno, will leave €360 million euros in the bank accounts of Andalusian residents.
Workers in the region with yearly earnings of between €12,450 and €35,200 will benefit the most and pay less income tax as a result of the move.
Moreno also announced that the water tax would be suspended in 2023 meaning a global saving of €140 million for the region's families and businesses.
Source
https://www.juntadeandalucia.es/presidencia/portavoz/economiayempleo/174934/JuntadeAndalucia/ConsejodeGobierno/impuestos/rebajafiscal
https://www.surinenglish.com/andalucia/wealth-tax-scrapped-20220919115941-nt.html
https://www.thelocal.es/20220920/spains-andalusia-to-scrap-wealth-tax-in-bid-to-attract-high-earners/
Image Credit: Junta de Andalucia
