The citizens of the Autonomous Community are the ones who save the most in the payment of Inheritance and Donations taxes in Spain, according to the report ‘Panorama of regional and regional taxation 2023’, prepared by the General Council of Economists and the Register of Economists Tax Advisors (Reaf). Specifically, the collection rose in 2021 to 25.6 million euros, which represents 1.92% less than the previous year. In Donations, family members practically do not pay taxes as they have a tax rate lower than the state one.
In this type of tax, economists warn that tax competition to the bottom has been taking place for some time when the taxpayers are close relatives of the deceased or the donor, using for this purpose, in most cases, the regulation of bonuses or of significant reductions. For its part, Madrid also extends the discount to brothers, uncles and nephews, as does the Canary Islands.
Tax revenues linked to the financing of communities evolved positively after the financial crisis, experts say. This is due to those partially transferred such as personal income tax and VAT, where most of the collection comes from.
Regarding income tax, the study highlights that the Region lowers its rates with effect for the next campaign and that the lower rate falls and the maximum rises, as in other autonomous communities. According to the experts, the trends in the territories include that the main differences are produced by the regulation of tariffs -noting a certain inclination to lower them-, especially last year, since up to eight communities have opted for deflation like the Region, or by lowering rates. Some have even opted to update the personal and family minimums.
Many tax benefits are also regulated, with a limited collection cost, to promote birth rates, help taxpayers who have to deal with special situations of disability, try to alleviate rural depopulation or to promote positive behaviors for the environment, although, normally, they are only Medium and low incomes can apply, indicated Ramón Madrid, dean of the College of Economists of the Region of Murcia, who served as host this Wednesday in the presentation of the report.
As regards the wealth tax, the most relevant novelty lies in the bonus, included for 2022, with the application of a minimum exemption of 3.7 million euros in the Region of Murcia. “Therefore, a higher exempt minimum setting is produced,” says the study. The regional government collected 27.5 million euros in 2021, 7.42% more than the previous year.
In four communities -Aragon, Catalonia, Extremadura and the Valencian Community- they already had exempt minimums lower than the state one; while the Region of Murcia has increased it considerably; and that in Andalusia and Madrid this tax is not paid, while Galicia already subsidizes it at 50%.
With regard to Patrimonial Transfers and Documented Legal Acts, in the Region of Murcia there is an increased rate of 2 per 100 when new properties subject to VAT are acquired. In 2021, the collection for the first reached 175.2 million euros, 35.92% more than the previous year, while the second amounted to 69.6 million euros, 44.10% more than in 2020, being the community that pays the most
On the contrary, in the modalities of Onerous Patrimonial Transfers or Documented Legal Acts, in general, an attempt has been made to mitigate the drop in collection, due to the loss of vigor of the real estate sector, with an increase in tax rates, economists allege .
«Many communities apply reduced rates in the modality of Onerous Patrimonial Transfers when the VAT exemption is not waived in real estate transfers and, nevertheless, they penalize the transfers with waiver of the VAT exemption by raising the rates in the Acts modality Documented Legal “, they continue.
Regarding own taxes, they point out that they represent only 2% of tax revenue in 2021, so they continue to be a scarce source of financing for the autonomies, 14.1% more than the previous year.
own taxes
María José Portillo, director of the Department of Territorial Finance of the UMU, specified that there were numerous modifications in 2023 in own taxes as a result of the creation of the State Tax on waste, which has meant that the communities that had implemented a tax similar have proceeded to suppress it or leave it without effect. The economist revealed that a concatenation of factors may have caused a greater increase in collection. “It could be due to inflation, revitalization or the increase in electricity transactions,” she remarked.
For the authors of the study, it would be worth considering whether it is worth going against the current in the taxation of wealth within the EU. In addition, they consider that the territories should make an effort to unify platforms for the management of transferred taxes, both for the citizen and for social partners. “We should tend towards fiscal consolidation in the European Union, since we should not compete with taxation,” concludes Ramón Madrid.
tax examples
In the presentation, both economists presented some tax examples. Taxpayers with different assets in whose amounts the 300,000 euros exempt from the habitual residence are no longer taken into account. Up to 4 million euros is not paid. And, in that case, the amount reaches 879.44 euros. From the 15 million euros, 238,524.47 euros would be paid; and, from 40 million euros, 449,385.19 euros.
It was also detailed that the cost of the deed of the acquisition of a new property, without it being the habitual residence of the purchaser, within the documented legal acts tax. From 150,000 euros, an amount of 3,000 euros will be disbursed; of the 450,000 euros, the figure would rise to 9,000 euros; from half a million, to 10,000 euros; and from 750,000, to 15,000 euros.
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