The tax rate on those who have the most will be affected in the Basque territory.
The past year was characterized, in the tax area, by the deployment of a set of taxes and levies that in many cases were surrounded by controversy, difficulties in their application, and announcements of a multitude of appeals by taxpayers.
One of the most debated taxes is the new temporary tax on large fortunes (IGF). Despite the fact that the number of people affected will be small, and the impact on tax collection very limited, it has generated a lot of concern among some taxpayers, consultations to analyze possible ways of appeal, which there are, and the study of possible displacements to more friendly territories with large estates.
Having said the above, what is the situation of the Basque Country in relation to this new tax? Following the agreement of the Mixed Commission of the Economic Agreement of December, the Congress first, and then the Senate have approved, in a single reading, the bill amending the Economic Agreement to establish this tax (together with others) in terms similar to the wealth tax. Therefore, it is recognized that it is a complementary tax to the wealth tax, that the Historical Territories have full regulatory capacity, and it is also specified that it will have the same duration as the State tax.
Thus, in a very short period of time, the bill will complete its processing, concluding the conclusion of this tax. Subsequently, the General Assemblies will be able to initiate the procedure for the approval of new provincial regulations governing this new tax in their respective historical territories.
Bearing in mind that the state IGF will only last for two years, 2022 and 2023 (we will see if its application is extended), that at the end of May we have regional elections, and that there is a certain discrepancy between PNV and PSE regarding the application of this tax, will it really be applicable in the Basque Country?
It is practically taken for granted that this tax will not be applicable in the historical territories in 2022, given that the accrual would have occurred on December 31. So the question that remains to be resolved is what will happen in 2023. Assuming that PNV and PSE remain as governing parties, and knowing that the position in this case is not fully coincident, we think that the following situations could occur.
The first option is to opt for not incorporating this new tax into its tax legislation, on the basis that there is already an adequate wealth tax. The other option is to opt for the Navarre solution, which consisted from the outset in temporarily modifying the scale of the wealth tax to adjust it to that of the IGF. There is a last option, which would involve the approval of a new foral IGF, which could be identical in terms to the state tax, or to the foral wealth tax with an extended scale.
Either of the last two solutions (adapting the wealth tax rate, or approving a foral IGF), will have a very small impact on the number of taxpayers affected, since it is estimated that there will be around 500 in the Autonomous Community. It must be taken into account that the fact that it is a complementary tax to the wealth tax, and that therefore what is paid in the latter can be deducted, places the threshold of application of the new tax in the area of taxable bases exceeding 10 million euros in Bizkaia, or 13 million in Alava and Gipuzkoa.
However, the possible literal transposition of the state IGF is relevant, as opposed to the modification of the wealth scale or the approval of a foral IGF similar to that of wealth, since there are substantial differences in such sensitive matters as the scope of the family business exemption, for example, in cases in which business profits are maintained in the company.
Therefore, we will have to remain attentive to the evolution of this new tax, since beyond its collection capacity, it is generating an important debate both among the government parties and in general in society, and its eventual application will surely be accompanied by a good number of appeals.
