The coalition government’s attempt at tax reform showed the seriousness of its parliamentary weakness. Stuck between its right and left partners, the Executive barely has a sufficient majority in Congress to obtain the transposition in Spain of the European directive which modifies corporate tax to establish a floor of 15% for multinationals. “The negotiation is still open,” said government spokesperson Pilar Alegría during the press conference following Tuesday’s Council of Ministers.
The set of measures with which the government intended to accompany this law, based on amendments, was reduced this Monday to a minimum during a bizarre finance committee in Congress which lasted from 5 p.m. to 1 a.m., with several ongoing attempts to save the government. commitments to convert temporary levies on financial institutions and energy companies into permanent taxes. For the moment, the two tributes are still pending, or rather almost buried. And they expire on December 31.
This Thursday, the plenary session of Congress finally votes on what remains of the tax reform, a preliminary step to the General State Budgets (PGE) of 2025. This is what survived the Commission, what has another opportunity and what is left out. .
Corporate tax reform
Spain cannot further delay the transposition of the European directive on the 15% minimum tax on multinationals. The European Commission will report to us if the final disbursements of the European Union (EU) recovery plan are not delivered and are at risk, in addition to directly threatening budget negotiations. This bill has been on the parliamentary shuttle since June and, on its own, appears to have broad support among congressional groups (including the PP). However, the government tried to transform it into a tax reform, adding amendments with other measures, which backfired.
This Monday, the crossed vetoes in the Finance Commission of the Lower House rejected most of the changes and new taxes that the PSOE wanted to adhere to the bill on the European directive. Some, on the right, agree with the PNV and Junts. Others on the left agreed with Sumar and other left-wing forces. Of the entire tax package, only the following measures remain in the “opinion” of the 15% minimum tax voted this Thursday in Congress.
The most relevant, in line with increased taxation of the richest, is the increase in personal income tax on capital income of more than 300,000 euros. An increase of two points, up to 30%, fought by Sumar at the Ministry of Finance.
Concerning companies, the tax reductions for SMEs and microSMEs have survived, gradually from 2025 to 2029. Companies with a turnover of up to 10 million will reduce their taxation from 25% to 20% in 2029, and microenterprises from 23% to 20% in 2027. . Furthermore, a reduced tranche is planned for the first 50,000 euros, which would end up being. 17% in 2027. Relief for recapitalizations has also been added. In this case, for large and small businesses, being able to reduce the corporate tax base.
Of lesser importance, there is a special reduction for workers in the performing arts, audiovisual, music and technical sectors, as well as for auxiliaries with irregular income. And finally, a bonus on company contributions to Social Security for the common unforeseen circumstances of hiring coaches or instructors for the training or training of children under eighteen in non-professional clubs.
This lighter “fiscal package” should now have a sufficient majority in Congress, without a cross-veto from investment partners, because it arrives without the bank tax and without the tax on energy companies, on which attempts to save them are more complicated. .
Bank tax
All the amendments on the bank tax were rejected this Monday in the Finance Committee. But the measure, a commitment of the PSOE and Sumar, arrives Thursday at the plenary session of Congress. Alongside the Commission, ERC, Bildu and BNG issued a statement in which they ensure “the commitment to approve the bank tax when it is processed during the plenary session of Congress on Thursday, increasing the highest tranche of the tax, by directing the entire collection”. to the Autonomous Communities and in accordance with the provincial treasuries of the Basque Autonomous Community and the Foral Community of Navarre.
This Tuesday, Míriam Nogueras was optimistic about the outcome of the bank tax during Thursday’s vote. Ione Belarra, from Podemos, links the support of his party’s deputies to the tax on energy companies. “It is very good that the government is committed to extending the tax on energy companies with ERC and Bildu, but without a guarantee that Junts will also support it, it is little more than a dead letter. Podemos will only support this tax reform if the tax is really maintained,” he reacted on Monday, shortly before midnight.
To the energetic
The extremis agreement of the Ministry of Finance with ERC, Bildu and BNG definitively excludes the extension of the tax on energy companies from the “package” voted this Thursday in Congress, but it remains crucial to resolve the entire network of supports . . The path now taken by the left-wing partners of the PSOE is a new royal decree-law to extend until 2025 the temporary tax designed in 2022 due to the extraordinary profits obtained by the sector following the inflation crisis.
The support of the PNV and Junts for this initiative is unknown. It is logical that Podemos doubts this, because the two parties have aligned themselves for weeks with the interests of Repsol, Iberdrola, Cepsa, Endesa or Naturgy and blocked this commitment of the PSOE and Sumar for the formation of the coalition government.
This Tuesday, almost at 1 a.m., the Ministry of Finance sent a statement of just three lines: “The Government wishes to clarify that it maintains its agreement with Junts not to tax energy companies that maintain their effective commitment to investment for decarbonization.
Diesel
In the game of cross vetoes that took place in the Finance Commission, Sumar rejected with PP and Vox the PSOE proposal to equate the taxation of diesel and gasoline. Since this training, they have warned their executive partner that they would block it if there was no energy tax. The proposal gets another chance at Thursday’s plenary session of Congress.
Removal of SOCIMI tax privileges
Another conflict within the coalition government in the Finance Commission was the rejection by the PSOE, together with PP, Vox, Junts and PNV, of the Sumar amendment aimed at ending the tax advantages of SOCIMI (Sociétés d’Investissement by Shares Listed on the Real Estate Market). . This measure was reflected in an agreement signed between the PSOE and Sumar on Monday last week.
The text specifically reiterates the intention to “remove the special tax regime for SOCIMI, which only pays 1% corporate tax and which has not made it possible to improve the supply of housing”.
Health insurance
The PSOE-Sumar agreement also highlights the rejection this Monday of the removal of “the exemption from private health insurance premiums, which has a clearly regressive bias, fundamentally benefiting individuals and families with high incomes”. This measure made Junts uncomfortable from the start.
Increase in VAT on tourist apartments
It also has a poor prognosis, again due to the opposition of Junts, PNV, PP and VOX, the PSOE and Sumar agreement plans to “introduce a 21% VAT for tourist apartments in order to reduce their profitability and transform them into permanent housing.” rental, alleviating the lack of usual housing in distressed areas.
