The Spanish Government has outlined plans for around EUR5.6bn (USD6.3bn) worth of tax increases in 2020 as part of its fiscal stabilisation program, which includes a tax on digital services.
The measures are contained in the Government’s four-year fiscal and economic plan sent to the European Commission on April 30, a major aim of which is to reduce Spain’s budget deficit.
According to the document, notable revenue-raising proposals include:
Limiting corporate tax exemptions and the imposition of a corporate minimum tax;
Increasing personal income tax;
Increases in environmental taxes;
A new tax on financial transactions;
A new tax on the provision of digital services in Spain; and
New anti-avoidance measures, including a limitation on cash payments, tougher sanctions for tax defaulters, and the adoption of international tax standards.
The plan also includes a number of tax relief measures, particularly for small businesses, including a reduced rate of corporate tax for SMEs.
In the area of value-added tax, the plan provides for VAT rebates for veterinary services and a reduction in the VAT rate for supplies of electronic publications.
Proposals to introduce a digital services tax were included in the Government’s 2019 Budget, which was rejected by parliament in February, triggering last month’s general election. Under that proposal, a three percent levy would be imposed on companies with total revenues of EUR750m (USD839m) and with sales from digital services of at least EUR3m in Spain.
Revenues from the sale of online advertising, intermediary services, and the sale of user data were included in the scope of the tax.
However, it is unclear at present whether the plan will receive the backing of the Spanish parliament. While the incumbent Socialist Government won the most number of seats in the recent elections, it fell short of gaining a parliamentary majority.
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