Tax increases plus changes to social security and minimum wage

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1. Large companies and large cooperatives face limits on offsetting negative tax bases and quotas, with percentages of 50% or 25% depending on their revenue.
2. Corporate income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. restricts the deduction of losses from selling equity stakes, requires impairments deducted before 2013 to be reversed over five years, and caps the foreign double taxation deduction at 50% for large companies.
3. The wealth tax is extended for 2017, and the tax on intermediate products, alcohol and alcoholic beverages rises by 5%, along with changes to tobacco tax rates.
4. Certain tax debts may no longer be deferred or paid in installments, such as withholdings, corporate tax installment payments and passed-on taxes, and payment in kind is restricted.
5. Cadastral value update coefficients are set for 2017, affecting local property tax (IBI), and it is clarified that the suspension of the compensation for abolishing the Canary Islands' IGTEIGTE Canary Islands General Indirect Tax, a VAT-like tax applied in the Canary Islands. takes effect from January 1, 2016 on an accrual basis.
6. Maximum social security contribution bases rise by 3% in 2017, future increases will follow the recommendations of the Toledo Pact committee, and the Government will set a 2017 minimum wage 8% higher.

Who it affects

• Large companies and large cooperatives: They pay more because offsetting losses and deductions under corporate income tax is limited.
• Businesses selling alcohol, intermediate products or tobacco: Their products carry higher tax rates.
• People who owe taxes and want to defer them: They can no longer defer or pay in installments certain debts, such as withholdings or passed-on taxes.
• Workers and pensioners: Maximum contribution bases rise by 3% and rules are set for future caps and pension limits.
• Employees and collective bargaining negotiators: The 2017 minimum wage will rise 8% from the 2016 level.

Words worth knowing

Base imponible (tax base)

The amount of money on which the tax is calculated.

Deterioro de valor (impairment)

A loss of value suffered by an investment before it is sold, recorded in the accounts.

Valores catastrales (cadastral values)

The values the Cadastre assigns to each property, used to calculate local property tax (IBI).

IGTE

Canary Islands General Indirect Tax, a VAT-like tax applied in the Canary Islands.

Salario mínimo interprofesional (minimum wage)

The lowest legal wage that can be paid for a full working day, whatever the job.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries