The new tax that will affect large capital income and personal income tax savings (IRPF) raises serious doubts among tax lawyers because of the There will be strong differences between residents and non-residents when it comes to paying taxes on a capital gain. For this reason, some experts such as Alejandro del Campo, the lawyer who overturned the tax fines for assets abroad of the controversial model 720 of Cristóbal Montoro, are studying taking the new tax to Brussels.
The coalition government presented last week the package of fiscal measures that includes, among others, a temporary tax on large estates, tax relief for lower-income taxpayers, a setback for large consolidated groups in corporate tax and the aforementioned higher surcharge in personal income tax towards large savings income. Several of these measures are included in the draft General State Budgets (PGE) that the Executive will present today in the Congress of Deputies.
The new design of the tax on savings, specifically, plans to raise the tax rates in personal income tax for the highest capital gains, a measure that will affect some 18,000 taxpayers and that plans to raise nearly 200 million euros additions in 2024.
Between 200,000 and 300,000 euros of profit, the rate applied will go from the current 26% to 27%. Returns that exceed 300,000 euros, for their part, will be taxed at 28%, two percentage points more than today. However, and this is where Del Campo sees a “clear violation of the principle of equality”, those who are registered in other countries and pay non-resident income tax will have to pay at a single rate of 19% whatever the capital gain. The Ministry of Finance confirms, in fact, that the rate that affects non-residents will not be modified for the time being.
Del Campo illustrates the gap between residents and non-residents with the example of the sale of a property in Spain. In the case of a capital gain of half a million euros, those who have their habitual residence in another country will have to pay 19%, paying a total of 95,000 euros to the Treasury. On the other hand, residents with a similar benefit will have to pay almost 128,000 euros, 34.6% more.
The difference is bigger as the capital gain rises. The transaction of a luxury property that supposes a yield of one million euros will mean for the resident the payment of 267,000 euros, 40% more than if he lived regularly in another country. A capital gain of 2 million euros, on the other hand, will imply for the non-resident the payment of 380,000 euros. For the resident, the settlement will be almost 550,000 euros, 44% more.
East tax treatment “so disparate” It is the one that can give rise to a challenge, explains Del Campo. On the one hand, he wields, it seems clear that the principle of equality contained in article 31 of the Constitution is violated. “But it seems that such a brutal difference in treatment, which lacks logic and justification, could also violate European Union law,” he adds. Specifically, article 21 on the free movement of people, since this gap supposes “a clear invitation to remain as a non-resident”.
There are precedents that could justify the expert’s approach. Until 2006, non-residents in Spain paid a rate of up to 35% on a capital gain derived from the sale of a property, while residents paid a rate of 15%. Brussels, in 2004, initiated a infringement procedure against Spain for this divergence that led the legislator to establish a single rate of 18%. In parallel, the Court of Justice of the European Union condemned Spain for this differential treatment towards non-residents that violated the free movement of capital. As of 2010, however, the rate for residents increased, while that for non-residents remained at 19%.
The difference between residents and non-residents when paying taxes on these incomes was already notable before the last change in the Treasury. However, with these modifications, “we see how differences are increasing”.
According to the lawyer, there are still many foreigners who, “despite the wealth tax”, are considering becoming residents in Spain. However, if they are going to have to pay 100,000 or 150,000 euros more to sell a home, “it is likely that they will decide to continue maintaining their residence in another country.”
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