Proposed wealth tax on fortunes over 10 million euros

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1. The bill would create a state tax for people with large fortunes, defined as net worth above 10 million euros counting exempt and non-exempt assets, minus deductible debts and charges. It would complement the existing Wealth Tax.
2. It would limit the exemption for company shares and stakes to SMEs, meaning entities with fewer than 250 employees and annual revenue of up to 50 million euros or annual balance sheet total of up to 43 million euros.
3. It would raise the taxable base reduction (the minimum exempt amount) to one million euros and set an eight-bracket scale with rates from 3.6% to 5% on total assets, minus deductible debts and charges.
4. It would set a combined cap: the sum of this tax plus personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF) could not exceed a percentage of the IRPF taxable bases, ranging from 60% to 67% depending on income level, and the reduction from this cap could not exceed 70%.
5. The tax would accrue on December 31 each year, and anyone with tax due or total assets above 10 million euros would have to file. Non-residents would have to appoint a representative in Spain, with a 3,000-euro fine if they fail to do so.
6. The law would take effect on January 1, 2023, and future State Budget laws could change its exemptions, rates and other quantitative parameters.

Who it affects

• Individuals living in Spain with large fortunes, who would be taxed on their entire net worth.: They would pay this tax under the personal obligation.
• Non-resident individuals with assets or rights in Spain.: They would be taxed only on those assets, under the real obligation, and would have to appoint a representative in Spain.
• Holders of stakes in companies that are not SMEs.: They would lose the exemption for those stakes under this tax.
• Depositors or managers of non-residents' assets.: They would be jointly liable for payment of the tax debt.

Words worth knowing

Devengo (accrual)

The moment the tax is considered due, here December 31 each year.

Base imponible (taxable base)

The amount on which the tax is calculated, here the value of net worth.

Cuota íntegra (gross tax liability)

The result of applying the tax rate to the base, before deductions and caps.

Obligación personal / obligación real (personal / real obligation)

The personal obligation covers all assets of people living in Spain; the real obligation covers only assets located in Spain of people who do not live there.

Beneficiario real (beneficial owner)

The person who actually owns or controls an entity, even if someone else is listed.

income tax

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

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries