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HomeLatest NewsTax collection on the wealthy falls by almost 95% in 2024

Tax collection on the wealthy falls by almost 95% in 2024

Revenue from the Temporary Solidarity Tax for Large Fortunes (ITSGF) increased from 619 million in 2023, the year it came into force, to 38 million in 2024, due to the reactivation of the wealth tax by several autonomous communities, such as Madrid, Andalusia or Galicia, since if the regional tax exists, it is not paid by the tax of the ‘State.

In terms of national accounting, revenues from the Temporary Solidarity Tax for Large Fortunes, which came into force in 2023 with a collection of 619 million, were reduced in 2024 to 38 million “due to changes implemented by communities autonomous”, according to the report of the General Intervention of State Administration (IGAE), referring to the month of August.

In this way, the data published by the Tax Administration show that, until August, there would have been a drop in income for this 93.9% tax, going from 619 million to 38 million over the first eight months of the year.

The solidarity tax on large fortunes affects net assets greater than 3 million eurosis accumulated on December 31 of each year and the declaration is filed between July 1 and 31.

To avoid double taxation, taxpayers only pay taxes on the part of their assets that has not been imposed by their autonomous community as wealth tax.

Thus, in the solidarity tax of large fortunes, a deduction is applied to the amount paid to the wealth tax, deducting from the payment of this new tax the amount paid by the wealth tax.

For this reason, last year the collection was obtained mainly from the important assets of the autonomous communities whose wealth tax was totally or partially subsidized, as was the case of Madridwhich ensured 89% of the collection – more than 550 million euros -.

However, the Community of Madrid decided at the end of 2023 to recover the wealth tax for fortunes over 3 million and to prevent the State from collecting the tax from the rich, while other territories like the Andalusia have given large taxpayers the opportunity to pay property taxes in the autonomous community.

The wealth tax was abolished on January 1, 2008 and after the economic crisis the government of José Luis Rodríguez Zapatero recovered it in 2011, initially temporarily until 2013, but the executive of Mariano Rajoy and now of Pedro Sánchez maintained and extended it. successively.

Madrid at the top of the amounts

Among wealth tax filers in 2022 – latest data available from the Tax Agency – most are concentrated in three regions: Cataloniawith 87,382, which tops the list with the next region, which is the Valencian Community, with 28,009 declarants, followed by Madrid (23,486).

On the other hand, in the distribution by amount of declared assets, the regional classification changes considerably, since in this case Madrid comes at the top of the ranking, with an average declared asset per taxpayer of 11 million euros.

What will happen to the tax?

As part of its programmatic agreement to form a new progressive coalition government, PSOE and Sumar agreed to evaluate the results of the Temporary Solidarity Tax on Large Fortunes with the aim of moving towards a new taxation of wealth within the framework of the regional financing model to put an end to unfair tax competition between territories.

However, in view of the negotiation of the General State Budgets (PGE) of 2025, Sumar proposes to modify the solidarity tax of large fortunes, as a direct, personal and complementary tax to the Wealth Tax (IP) so that the tax on the net assets of natural persons which exceeds 1,000,000 euros – without prejudice to the exempt minimum of 700,000 euros -, initially applicable only to taxpayers due to a personal obligation instead of 3,000,000 euros as currently indicated.

Source

MR. Ricky Martin
MR. Ricky Martin
I have over 10 years of experience in writing news articles and am an expert in SEO blogging and news publishing.
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