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New Taxes for 2019

New Taxes for 2019

05 11 - 2018

The Government has launched a range of tax increases for 2019 of 5,678 million euros that will impact especially on companies, individuals and investors, with increases in Corporate Tax, Income Tax and Equity, and with the creation of a technology tax and a tax on financial transactions.

The plans also include the taxation of diesel, of income from capital, of real estate and of 'unit linked' investments. The Government and the "Podemos" party  have agreed to a tax increase of 5,678 million euros that will impact especially on companies, individuals and investors. This forecast, which includes several measures to combat tax fraud, is estimated in the face of the 2019 Budgets.

Companies and financial operators will take the brunt of the hike. Imposing a minimum rate on companies of 15% on a taxable basis which will have almost no effect, and that of 18% for banks and oil companies will be limited. However, it will tax 5% of the dividends from abroad, which can create double taxation, and is estimated to collect about 1,800 million euros.

The technology tax rate is estimated to be 3% on digital business, that is to say, online publicity, the intermediation and the sale of data in Spain, and is estimated to raise 1,200 million euros. The Government will also implement a Diesel tax in 2019, which it expects will raise 670 million. The increase in income tax of two points for incomes of more than 130,000 euros and four for those above 300,000 will mean a payment of between 1,600 euros and 27,800 euros more per year for these taxpayers. Investors also face a four-point rise in savings income, which will be taxed at 27% from 140,000 euros, in order to raise 328 million. Increase the Estate Tax by 1% from 10 million can mean the payment of 100,000 euros more per year.

The rate on financial transactions, also a newly created tax that the European Union wants to take forward, such as digital, but fails to do so, could raise about 1,000 million.

Minimum tax Hacienda which will reform the Corporate Tax Law and impose a minimum rate of 15% on a taxable base for groups and non-groups in 2019 who have turnover of more than 20 million. This measure will not affect any company, or if it does, it will only be a small amount, as shown by the statistics of the Tax on Companies by the Tax Agency, in which it is found that on a taxable basis the companies included in this range have an effective rate more than 15% A different question would have been if this measure had been articulated on the accounting result, as initially demanded by "Podemos". A minimum rate of 18% for banks and oil companies, which now have a nominal rate of 30% compared to 25% for the rest, will have an impact on some companies.

hacienda-tributos-agenciaUp to 12% of the maximum contribution bases. The president of the Independent Authority of Fiscal Responsibility (AIReF),  has revealed that the Government of Sanchez wants to raise between 10% and 12% the maximum contribution bases to the Social Security. Escrivá specified that the Government of Sánchez intends to raise between 10% and 12% the maximum contribution bases to increase the State's income by another 1,000 or 1,100 million euros. He pointed out that this is an additional measure, which was communicated to AIReF after the draft budget plan and which "appears formulated in generic terms". At present, the contribution bases are at 3,803.7€ per month (45,644€ per year), so the expected rise would raise them to between 4,184 and 4,260 € (50,208 and 51,121€ per year) depending on whether the increase is 10% or 12%.. "Pending its final formulation, it can have an impact between an additional 1,000 and 1,100 million €," said Escrivá, who added that this new fiscal increase could bring the additional income of the State to a total of between 6,078 and 7,698 million.  according to AIReF estimation. CEOE has quantified between 1,467 and 1,761 million € a year, the cost for companies, which would also have an impact on employment,  

Dividends: What is going to hit the companies is to tax on dividends from abroad by 5%. The total amount of what companies deducted to avoid double taxation was in 2016 of 105,332 million, 148,280 if adjustments for consolidation are taken into account, according to the latest data published by the Tax Agency in August. A tax of 25% to 5% of these dividends would be close to a tax of 1,800 million. The Government has calculated that this measure, together with the minimum rate of 15%, will give 1,776 million. The total exemption of foreign dividends was established by the Government of the PP in 2015 with the tax reform in order not to discriminate against the sales of non-resident companies. Companies warn that taxing these dividends will create double taxation. According to the Minister of Finance, María Jesús Montero, "the same parameter will be used as France or Germany, so that there is a minimum percentage of double taxation," he specified. A perverse effect of the measure may be that companies decide not to repatriate dividends, as has happened in the US.

Google rate: Advertising, data sales and digital mediation of companies with a global turnover of 750 million, of which there are 3 million in Spain, will be taxed at 3%. In this way, the tax affects the digital business of companies in Spain, even if they are not physically in Spain. The Government plans to raise 1.2 billion and estimates that telephone companies will pay at least 100 million if 10% of their operations are taxed.

Exit tax '. The exit tax will be tightened for Corporate Tax so that companies that go to another EU Member State or to a country that is a party to the Agreement on the European Economic Area (EEA) will have to pay for their latent capital gains and they are allowed to split the payment for five years. Until now, the companies that were going to a third State had to do it and, in the event that they went to the EU, the payment only occurred on the date of the transfer to third parties of the affected assets. A new tax generation assumption is also introduced in the event of a transfer, not of an isolated element, but of the activity carried out by the permanent establishment.

Investors: 'Tobin rate', rising savings and 'unit linked' Investors will be affected by the tax increase in two aspects. A rate is created for financial transactions and the taxation of the highest capital income is raised four points. In addition, the Government will calculate the unit linked life insurance in the Wealth Tax.

'Tobin rate'. The Tax on Financial Transactions will be 0.2% on the purchase of Spanish shares executed by operators of the financial sector to collect 850 million. Only shares issued in Spain by listed companies whose market capitalization exceeds 1,000 million will be subject to taxation. Therefore, the purchase of shares of SMEs and unlisted companies will not be taxed, and public and private debt and derivatives are also exempt. Primary market operations will be excluded from this tax, which will affect the net balance of intraday transactions. The tax will be applied to the financial intermediary who is responsible for transmitting or executing the purchase order, and will be required to file an annual tax return. However, the tax settlement will be made monthly. The president of Inverco, Ángel Martínez-Aldama, has assured that this rate will reduce by 7.5% on the profitability of the 25 year funds and that the participants will end up paying.

Income from capital. The state rate on capital income will increase by four percentage points for incomes above 140,000€, from 23% to 27%, which will affect about 60,000 taxpayers. This measure, together with the increase in income from work also in the IRPF, is expected to raise 328 million euros.

'Unit linked'. The Government has dealth a blow to unit linked life insurance, which will be taxed on the Tax on the Estate. The Executive of the PP made them exempt in 2017.

ETF. The transfer of ETFs, investment funds quoted on the stock market, without fiscal cost, which some entities began to offer, has days counted. The Treasury wants to revert to the criterion of Taxes and the funds quoted in international exchanges will be penalized again, like national ones.

Individuals: Increase in income and large assets. The Government has agreed with it can raise the IRPF for income from 130,000€, which will mean an increase for taxpayers with income of between 60,000 and 130,000€ and four points from 300,000€. This will place the maximum marginal at 52% compared to the 48% prevailing in the communities with the highest rates, as is case of Catalonia, Valencia, Andalusia, Asturias, Cantabria and La Rioja. In addition, 1% is increased in the inheritance taxes above 10 million.

According to Gestha calculations, the increase of two points will affect more than 95,000 taxpayers, who will see how the amount to be paid increases, on average, by 1,600€ per year. For incomes from 300,000 to 600,000€ -where affects more than 18,000 taxpayers- the average impact will be an additional 7,676€ per year. The tax is multiplied by almost four for the 8,831 citizens with more than 600,000€, who will contribute 27,808€ more.

Diesel. The diesel penalty will be 670 million €, and will not affect professional diesel users, but does have an impact on the transport of non-heavy vehicles and taxi drivers.

Inheritance. With the increase of 1% the tax from 10 million, the Government plans to raise 339 million, a figure that includes Madrid, which has the Tax subsidized at 100%.

Property. The Taxes on Patrimony, Property Transfers (ITP) and Documented Legal Acts (AJD) and Succession and Donations are modified to establish that it will be taxed by the market value of the real estate and not by the real one. This measure can have an important collection effect, especially in Patrimonio.

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Calle Cándida Peña Bello 8
38631
Las Galletas (Santa Cruz de Tenerife)
  • Tenerife International Business Centre SL
  • Calle Cándida Peña Bello 8
  • 38631 Las Galletas (Santa Cruz de Tenerife)
  • 922 730 210
  • 0034 637 838 718

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