The Government delegates surveillance to the Competition Commission and the Bank of Spain so that customers are not passed on, under a 150% penalty
The coalition government reaches the summer break in August with the registration in Congress of the bill that will apply the new tax on banking and energy with which it intends to raise 7,000 million euros in two years. And it has done so with the detail of the proposal, which includes important novelties in the face of the political story created around this measure (that of acting on the ‘benefits fallen from the sky’) as well as in relation to its impact on citizens ( by insisting that he will not be allowed to be moved).
The first big news is that there will be two different types of taxes, depending on each sector: banks will have to pay a tax rate of 4.8% and energy companies, 1.2%. The difference lies in several circumstances that affect one and the other companies. One of these particularities is that the financial sector does not bear VAT in most of the operations it carries out (almost nine out of ten are exempt from this tax). Therefore, there was more room to apply a higher rate (almost 5%), which together with the average effective rate of current Corporate Tax paid by the sector, would be close to 30% in total, similar to that of other European countries.
X-RAY OF THE NEW LEVY:
-
7,000
million euros is what it intends to raise in two years -
1,000
million is the minimum amount of turnover to apply it to electricity companies -
800
million is the minimum amount of interest and net commissions to apply it in banking -
15,000
million is the amount of the two anti-crisis plans approved by the Government
Beyond that percentage, the second great novelty lies in where the tribute acts. It will not do so on the ‘profits that fell from the sky’, nor on the extraordinary profits that these companies are obtaining in recent months, in the Government’s opinion. The income they obtain for each business will be taxed.
Income, clearer
In the case of banking, the tax will be levied on the amount that each financial institution obtains both in interest that it applies to its credits and in the commissions that it charges its clients. In the case of energy companies, they will be taxed for all sales made in each period. As interest and bank commissions do not constitute the set of all the income of the banks -something that does happen with the billing of electricity companies-, the Treasury has also decided to raise the rate that applies to the financial sector compared to that which supports the energy sector.
The department headed by María Jesús Montero has abandoned the idea of taxing profits, such as the Corporate Tax, aware of the difficulty that this option entailed given the range of financial possibilities that companies have to set a profit, which is highly conditioned by elements such as extraordinary sales or purchases and other types of actions. They do, indicate sources of the Treasury, on a much more objective and clear data such as billing in each case. This way they can better track the tax base.
THE KEYS:
-
Results.
Avoid taxing profits due to the complexity of defining when an extra profit begins -
Management.
It will be in force for two years, a period in which the current economic situation is expected to continue
The companies affected will be the large operators in both sectors, although there will also be differences. In the case of banking, financial entities that have a sum of interest and net commissions (known as intermediation margin) for an amount greater than 1,000 million euros per year will pay the new tax. In this way, some of the medium and small Spanish banks will be left out. In the case of energy companies (including electricity, oil and gas), the annual turnover from which they must pay the tax is set at 800 million euros according to their net turnover, sales.
earrings to watch
The other big issue that was pending clarification is how the Government limits these companies to pass on the cost of this tax to their clients. The reality of the proposition indicates that this practice is expressly prohibited. But nothing else. For now. Because the Treasury delegates the task of supervision to the National Commission for Markets and Competition (CNMC) and the Bank of Spain so that this does not happen. These organizations will be in charge of developing a formula that determines how to identify this practice and then monitor it so that it is not carried out. In any case, the law will apply a penalty of 150% on the increase in costs transferred to customers, either through electricity rates or through higher interest or commissions.
The Asufin organization considers that it will be difficult to detect if banks will raise prices due to market circumstances or due to the new tax. In this sense, Adicae has proposed a regulation of what it considers as “arbitrary and abusive” commissions, taking advantage of the presentation of the tax.
After this first step in Congress, now begins a long parliamentary process that will lead to the implementation of the tax that will serve, basically, to defray part of the extraordinary expense dedicated to anti-crisis plans with an estimated cost of 15,000 million euros for 2022. When it is in force, companies will have to pay it in 2023 and 2024 (half in the months of February of each year and the other half in September), for income referring to the fiscal years of 2022 and 2023, in which the current crisis is expected to continue.
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