The tax reform, which the government managed to advance in Congress last Thursday, still faces a procedure that risks delaying the deadlines for entry into force. The text approved by the Lower House now goes to the Senate, where A predictable veto awaits him, obtained with the absolute majority that the Popular Party has in the chamber.. The rejection of those of Núñez Feijóo will have no other effect than to delay the implementation of the bill and its publication in the Official State Gazette (BOE) in which the precise details of the norm will be known. According to initial estimates, the process should take around four weeks.
As the Rules of Congress provide, “once a bill has been approved by Congress, its President shall transmit it, with its history and the documents produced during the processing before the House, to the President of the Senate.” It will now be the table of the Upper House, with a popular majority, which will have to qualify the initiative. Once this procedure is completed, the Council of Spokespersons will agree to introduce the rule into the plenary debate. The socialist group is expected to push for this to happen as soon as possible, taking into account that the PP will get the Senate to veto the tax reform.
Deadlines are tight. Once the text has been voted on in the Upper House and – as expected – rejected, the bill will return to the Congress of Deputies. Its Council – chaired by the socialist Francina Armengol – could again include the vote on the norm to lift the veto, and finally the future law would begin to roll, after being published by the BOE.
The majority held by the PP in the Senate has meant that this situation has become a usual trend. This already happened last Thursday, when the plenary session of Congress had to vote again in favor of the bill that transfers traffic powers to Navarra, which, a week before, the Popular Party had vetoed in the Upper House.
The government managed to “save” the tax reform at the last moment, after strengthening the support of Podemos, the last group to join the agreement. The rule includes a catalog of fiscal measures that allow Spain to meet the main milestone of the fifth tranche of European funds and unlock the receipt of more than 7.2 billion euros. In addition, it includes the bank tax and the transposition of the European directive which sets a minimum rate of 15% for multinationals. This point will increase revenues and avoid sanctions from the European Union.
Other measures are also being added, such as the increase in the maximum rate – to 29% – of personal income tax on capital income exceeding 300,000 euros; or even the limitation – to 50% – of groups of companies so that they can use the losses of their subsidiaries to minimize the payment of tax of the parent company.
Other proposals were left aside, such as the removal of tax exemptions for SOCIMI and private health insurance, the imposition of a 21% VAT on apartments for tourist use or the equalization of taxes on diesel and gasoline. A point, the latter, that Moncloa will try to integrate into the energy tax it is preparing.
