Draft of the General State Budget Law for year 2022: summary of the main tax measures proposed
Published on 28th Oct 2021
The Draft of the General State Budget Law for year 2022 has been published in the Official Gazette of the Spanish Chamber of Representatives (BOGC). Such draft law includes, as it does every year, several tax measures (Title VI – articles 59 et seq.), the most relevant of which will be summarised below.
Corporate Income Tax – Minimum taxation
The leading measure in the Draft Law is undoubtedly a minimum taxation in the Spanish Corporate Income Tax. For tax periods starting as from January 1 2022, the Draft Law proposes that corporate taxpayers (i) with a turnover of or in excess of 20 million euros or (ii) taxed under the tax consolidation regime, regardless of their turnover, should bear a minimum tax of 15% over their taxable base. This minimum rate increases up to 18% in the case of entities subject to the rate of 30% (financial entities or entities in the hydrocarbons sector), but is reduced to 10% for newly created entities (which can benefit from the 15% general rate). This measure will not affect entities generally subject to recused rates (0%, 1% and 10%) such as for example Collective Investment Schemes.
This minimum taxation is technically set up as a minimum tax rate over the taxable base. Thus – and in all certainty with a view to ensuring its constitutionality–, the measure is not designed to apply over the accounting result (unlike minimum taxation limits which exist in the context of part payments on account of the final corporate tax liability).
The minim rate of 15% over the taxable base will therefore allow taxpayers to apply, with the same limits which are currently in force, carry-forward loss compensation and exemptions provided for in the law (such as the Spanish participation exemption). Moreover, the minimum taxation will not limit the use of double taxation credits and of specific tax credits (for investments carried out by port authorities). Should the tax liability, after application of these tax credits, be below the amount resulting from applying 15% to the taxable base, such tax liability will prevail.
The minimum taxation measure, therefore, implies mainly additional limitations in the application of R&D tax credits or credits for cinematographic activities; the use of which cannot reduce the final tax liability below 15% over the taxable base.
Corporate Income Tax – Special tax Regimen for entities dedicated to residential rentals
Currently, entities applying this special tax regime can benefit from an 85% rebate in the corporate income tax liability arising from residential rentals, provided these entities comply with the necessary legal requirements. The Draft Law proposes to reduce this 85% rebate to 40%.
Personal Income Tax– Reductions for pension plan contributions
The general limit, to reduce the taxable base, as a result of contributions to pension plans will be reduced from the current 2.00 Euros to 1,500 Euros, although such limit may be increased up to 8,500 Euros, for contributions from employers and employees to the same pension scheme (for an amount equal or below the employer's contribution).
Personal Income Tax and Value Added Tax – Limits for the application of specific simplified regimes
Under the Draft Law, the current limits to apply specific simplified regimes in Personal Income Tax (módulos) and for Value-Added Tax purposes would be extended. At the moment, taxpayers whose gross income is above a certain fixed amount are not eligible for these simplified regimes. These amounts had been increased during 2021 and the Draft Law proposes to maintain these increased amounts during 2022.