The Spanish government plans to increase personal income, wealth tax and inheritance tax, in order to meet the EU’s conditions to receive €79.5billion in subsidies. Prime Minister, Pedro Sánchez says it’s essential if the country is to recover from the pandemic, but it will leave British expats worrying that they will be a lot worse off financially.
“We cannot have a public health system like the one we have, and the Nordic countries also have financing like we have,” Mr Sánchez told Spanish TV channel laSexta. “It is not sustainable.”
The country often tops the wish lists of those looking to retire overseas. Nearly half of over-50s who want to emigrate would choose Spain, statistics show. But if the Prime Minister pushes ahead, it’s about to become a lot more expensive and perhaps also less desirable.
The Spanish government wants there to be a “gradual increase of the tax system’s maximum contribution base”, which will result in a greater tax burden for those with monthly earnings above €2,400 net per month.Mr Sanchez also made plans for the country’s “tax harmonisation”, which places a heavy emphasis on wealth, inheritance and gift taxes.
Currently the Spanish State makes the decisions but the country’s 17 regions have the right to apply exemptions or conditions if it feels they will harm taxpayers. However, this looks likely to change.
A Government report said: “There is a need to apply wealth taxation in a more coordinated way between the different regions to guarantee a minimum and coordinated level of taxation, avoiding harmful tax competition between the different autonomous communities.”
Meanwhile, ministers in Madrid are also reported to be planning a revision or cancellation of existing tax benefits for vehicle registration and road taxes, although this hasn’t yet been confirmed by official sources. The Spanish leader agreed to a number of tax increases that will see drivers pay a lot more in taxes.