Will the increase in taxes in Spain affect foreigners?

The Spanish government recently announced plans to raise taxes on personal income, wealth and inheritance in a so-called “fiscal synchronization”.

Julio Prieto, a tax and private client specialist, writes for attorney Del Conte Chambers that Spain will allow $ 5.59 billion in subsidies from the European Union in an attempt to kickstart the economy following the devastating effects of the Covid-19 pandemic.

Changes affecting Spanish residents include income tax, wealth tax, VAT and IHT (inheritance tax). Income tax introduced new restrictions: 47% with a total taxable base of 300,000 euros and 26% with a taxable base of savings over 200,000 euros. The so-called “Beckham rule” for labour migrants in Spain - the tax rate will be 24% up to 600,000 euros, and from 600,000.01 euros - 47%.

Wealth tax is levied in part by the Spanish government and the local community. Subsidies depend on the regional community.

The VAT raised the tax on sugary drinks from 10% to 21%.

On 9 July 2021, the Spanish government passed Law 11/2021. It is a new anti-fraud law, the main change of which is the reference value for the recalculation of assets, which must be considered in Spain’s cadastral rules for real estate. If the property does not have a base value or the General Directorate for Real Estate cannot confirm it, “the taxable base will be higher than the following values: the assessed value of the taxpayer or the market value.”