Budgets in times of covid

The government is finalizing the tax increase for large estates and incomes in the PGE. Government sources explain that the fiscal agreement to reach a joint proposal for the new public accounts is “very advanced” in the framework of the negotiation.

These same sources explain that this tax agreement will place a greater burden on large assets and incomes, so that the 2021 Budget could include the proposals on these taxes set out in the programmatic agreement.

Said agreement contemplates an increase to 1% of the wealth tax rate for fortunes of more than 10 million Euros, as well as the establishment of a minimum rate of 15% in companies for large companies and 18% for banks and oil companies.

As for large incomes, the programmatic agreement of the Government projects an increase of two points of personal income tax for incomes over 130,000 euros per year and four points for those over 300,000 euros, although these terms of tax increase could vary. Increases in the rate of income tax savings, which could lead to effective taxation of 19%-23% at exorbitant rates of 35%.

As can be seen, the changes are going to be very significant, and in our opinion sustained over time, due to the enormous burden of public expenditure that the effects of the pandemic are going to entail.

To these fiscal changes, or rather fiscal axes, will be added widespread increases in local and regional taxes. For all these reasons, our recommendation is to plan and restructure the patrimony until the end of the year, so that the fiscal increases impact in the least possible way on the family and business savings, such as, for example, by redirecting income in holding companies, making changes in financial investments or anticipating donations to relatives.

From OBN we offer to help them in planning. Therefore, we recommend you to send a mail to Samuel Lorente Navarro, our partner in charge of the Fiscal Department, who together with his team will offer you the best possible solution.

Samuel Lorente:
Phone number: 620 27 35 52