The coalition government’s attempt at fiscal reform has shown the seriousness of its parliamentary weakness. Trapped between its partners on the right and left, the Executive barely has enough of a majority in Congress to achieve the transposition in Spain of the European directive that modifies the corporate tax to establish a 15% floor for multinationals. “The negotiation is still open,” said the Government spokesperson, Pilar Alegría, at the press conference after the Council of Ministers this Tuesday.
The package of measures with which the Government intended to accompany this Law, based on amendments, was reduced this Monday to a minimum in a bizarre Finance Commission in Congress that lasted from 5 p.m. to 1 a.m., with several attempts on the fly to save the commitments to convert temporary levies on financial institutions and energy companies into permanent taxes. For now, both tributes are still up in the air, or, rather, almost buried. And they expire on December 31.
This Thursday, the Plenary Session of Congress finally votes on what remains of the tax reform, the previous step for the General State Budgets (PGE) of 2025. This is what survived the Commission, what has another opportunity and what has fallen by the wayside.
The corporate tax reform
Spain cannot further delay the transposition of the European directive on the 15% minimum tax on multinationals. The European Commission will file a case against our country if the last disbursements of the European Union (EU) Recovery Plan are not achieved and are at risk, in addition to directly threatening the Budget negotiations. This Bill has been on the parliamentary shuttle since June, and, by itself, seems to have broad support among groups in Congress (including the PP). However, the Government tried to transform it into a tax reform, adding amendments with other measures, which has turned against it.
This Monday, the crossed vetoes in the Finance Commission of the Lower House rejected the majority of changes and new taxes that the PSOE wanted to adhere to the Bill on the European directive. Some, agreed on the right, with PNV and Junts. Others, agreed on the left, with Sumar and other progressive forces. Of the entire fiscal package, only the following measures remain in “the opinion” of the minimum tax of 15% that is voted on this Thursday in Congress.
The most relevant, in line with taxing the richest more, the increase in personal income tax on capital income of more than 300,000 euros. An increase of two points, up to 30%, fought by Sumar with the Ministry of Finance.
Regarding companies, tax reductions for SMEs and microSMEs survived, progressively from 2025 to 2029. Companies with up to 10 million in turnover will reduce their taxation from 25% to 20% in 2029, and microenterprises from 23% to 20%. % in 2027. In addition, a reduced tranche is planned for the first 50,000 euros, which would end up being 17% in 2027. A relief for recapitalizations was also added. In this case for large and small companies, to be able to reduce the tax base in the Corporate Tax.
Of lesser significance, there is a special reduction for workers in the performing, audiovisual, musical and technical arts and auxiliaries with irregular income. And, finally, a bonus on business contributions to Social Security for common contingencies in the hiring of coaches or monitors for the training or training of children under eighteen years of age in non-professional clubs.
This slimmed down “fiscal package” should now have a sufficient majority in Congress, without crossed vetoes from the investiture partners, as it arrives without the bank tax and without the tax on energy companies, on which the attempts to save them They are more complicated.
The bank tax
All amendments on the bank tax were rejected in the Finance Commission this Monday. But the measure, a commitment by PSOE and Sumar, arrives alive at the Plenary Session of Congress on Thursday. In parallel to the Commission, ERC, Bildu and BNG released a statement in which they assured “the commitment to approve the banking tax in its processing in the Plenary Session of Congress on Thursday, increasing the highest bracket in the tax, directing all the collection to the Autonomous Communities and agreed with the provincial treasuries of the Basque Autonomous Community and the Foral Community of Navarra.”
This Tuesday, Míriam Nogueras was optimistic that the bank tax would come out in Thursday’s vote. Ione Belarra, from Podemos, links the support of the deputies of her party with the tax on energy companies. “It is very good that the government commits to extending the tax on energy companies with ERC and Bildu, but without guarantees that Junts will also support it, it is little more than a dead letter. Podemos will only support this tax reform if the tax is really maintained,” he reacted on Monday, shortly before midnight.
To the energetic ones
The in extremis agreement of the Ministry of Finance with ERC, Bildu and BNG definitively excluded the extension of the tax on energy companies from the “package” that is voted on this Thursday in Congress, but it remains crucial to resolve the entire network of supports. The path now taken by the partners on the left of the PSOE is a new Royal Decree-Law to extend throughout 2025 the temporary tax that was designed in 2022 due to the extraordinary benefits achieved by the sector due to the inflation crisis.
The support of PNV and Junts for this initiative is unknown. It is logical that Podemos would doubt this, because both formations have been aligned for weeks with the interests of Repsol, Iberdrola, Cepsa, Endesa or Naturgy and have blocked this commitment by PSOE and Sumar for the formation of the coalition Government.
Almost at 1 a.m. this Tuesday, the Ministry of Finance sent a statement with only three lines: “The Government wants to clarify that it maintains its agreement with Junts to not tax energy companies that maintain their effective investment commitment for the decarbonization.”
To diesel
In the game of crossed vetoes that occurred in the Finance Commission, Sumar rejected with PP and Vox the PSOE proposal to equate the taxation of diesel and gasoline. From this formation they warned their Executive partner that they would block him if there was no energy tax. The proposal once again has another chance in the Plenary Session of Congress on Thursday.
Elimination of the tax privileges of the SOCIMI
Another clash within the coalition Government in the Finance Commission was the rejection of the PSOE, together with PP, Vox, Junts and PNV, of the Sumar amendment to end the tax advantages of the SOCIMI (Listed Stock Investment Companies in the Market Real Estate). This measure was reflected in an agreement signed by PSOE and Sumar on Monday of last week.
The text exactly includes the intention to “remove the special tax regime for SOCIMIs, which only pay 1% corporate tax and which has not served to improve the supply of housing.”
Health insurance
The PSOE-Sumar pact also highlights the rejection this Monday of the elimination of “the exemption to private health insurance premiums, which has a clear regressive bias, fundamentally benefiting high-income individuals and families.” This measure made Junts uncomfortable from the beginning.
VAT increase on tourist apartments
It also has a bad prognosis, again due to the opposition of Junts, PNV, PP and VOX, the PSOE and Sumar agreement intends to “introduce a 21% VAT for tourist apartments in order to cut their profitability and transform them into housing for permanent rental, alleviating the lack of habitual housing in stressed areas.”
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