Update of the Economic Agreement between the State and Navarre

Automatic summary, not yet reviewed

1. The law amends the Economic Agreement between the State and the Foral Community of Navarre to adapt it to reforms of the State tax system, following the agreement reached by the Negotiating Commission on December 20, 2021 and June 10, 2022.
2. New taxes are added to the Agreement: the tax on the value of gas, oil and condensate extraction, the tax on landfill, incineration and co-incineration of waste, the tax on certain digital services, and the tax on financial transactions.
3. The turnover threshold used to decide which companies pay tax only to Navarre, only to the State, or to both, for Corporate Income Taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. and VAT, is raised from 7 to 10 million euros.
4. For personal income tax withholding, when work is performed both in common territory and in Navarre, or through remote work, priority goes to the work center where the worker is assigned.
5. For Inheritance and Gift Tax, the Navarre treasury collects the tax on inheritances from decedents not resident in Spain when the heir lives in Navarre, and on gifts to Navarre residents of real estate located abroad.
6. Coordination between the two tax administrations is strengthened: rules on tax identification numbers are updated, a new Article 46 bis coordinates VAT inspections, and the Arbitral Board is updated with an abbreviated procedure.

Who it affects

• People who work or work remotely between Navarre and the rest of Spain: It changes which administration withholds income tax, based on the work center.
• Companies operating in both Navarre and the rest of Spain: The 10 million euro threshold decides whether they pay one or both administrations.
• Taxpayers with inheritances, gifts, or non-residents: New rules on which treasury collects the tax.
• Companies in hydrocarbons, waste, digital services, and financial transactions: These taxes now fall under the agreement with Navarre.

Words worth knowing

Convenio Económico (Economic Agreement)

The pact setting out how Navarre collects its own taxes and what it pays the State for the powers it exercises.

Punto de conexión (connecting factor)

A criterion, such as residence, workplace, or property location, that decides which administration collects a tax.

Volumen de operaciones (turnover)

The total amount a company bills for selling goods or services, excluding VAT.

Grupo fiscal (tax group)

A group of related companies that file taxes jointly as if they were one.

Junta Arbitral (Arbitral Board)

The body that resolves disputes between the State and Navarre over how the Agreement is applied.

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