The Constitutional Court will study the content of the extraordinary taxes that the Government has implemented after the price crisis: that of the tax on the extraordinary income of the banks, that of energy companies and that of great fortunes. The body has agreed to admit for processing the unconstitutionality appeal (a procedure that it usually does in most of the cases that come to it) that the Junta de Andalucía presented against one of the articles of the law on the temporary solidarity tax of large fortunes, although it has not suspended its application as a possible precautionary measure.
This announcement comes right in the middle of the financial crisis that banks have been experiencing for the last two weeks after the fall of Silicon Valley Bank in the US, followed by the rescue of Credit Suisse in Europe. A large part of the banks are stressed by the impact that the rise in interest rates may have on their portfolio of public debt bonds purchased at the time when interest rates were much lower, and whose early sale may mean a hole in their balances.
Over the past year, with the first rate hikes authorized by the European Central Bank (ECB) since July, banks have benefited from a higher interest margin, as shown by their latest annual results. The Spanish financial sector as a whole obtained profits of more than 20,000 million euros in 2022, XX% more than the previous year.
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The Government had justified precisely this greater margin generated by the increases in official interest rates to apply a tax that taxes the income of the Spanish financial sector for two years at 4.8% on the margin of interest and commissions charged. The goal of the Treasury is to raise 3,000 million euros between 2023 and 2024, that is, about 1,500 million euros each year.
Along with banking, the energy sector is impacted by this tax, to whose sales a rate of 1.2% is also applied for two years. In addition, along with these taxes, the one for large fortunes was launched – the one that the Andalusian Board has really appealed -, which taxes the net worth of individuals of an amount greater than three million euros.
The Andalusian Government has specifically appealed article 3 of Law 38/2022, considering that it could imply a violation of its financial autonomy in relation to the assigned taxes (the Wealth Tax is transferred to the communities), as well as the violation of the right to political representation, the principle of constitutional and institutional loyalty and the principle of legal certainty.
The Junta de Andalucía appreciates “a violation of the financial autonomy” of the autonomous community because the tax on large fortunes is conceived as a “complementary” tribute to the Wealth Tax (for taxpayers with a net worth of more than 700,000 euros) , which is bonused to 100% in this region.
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