Bill updates the Basque Economic Agreement for new taxes

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1. The bill would add three new taxes created by Law 7/2024 to the Economic Agreement: the Complementary Tax for large multinational groups, the tax on the interest and commission margin of certain financial entities, and the tax on liquids for electronic cigarettes. The first two would be agreed taxes with their own rules, with criteria to decide when Basque or state rules apply.
2. The Non-Resident Income Taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. would change from following state rules to being an agreed tax with its own rules. The bill sets the connecting criteria that decide in each case whether Basque or state rules apply.
3. For several taxes that follow state rules, such as VAT, Special Taxes or the Insurance Premium Tax, Basque institutions could adapt management rules and formal obligations when they introduce new technology-based invoicing or record-keeping methods, while guaranteeing data exchanges between administrations.
4. The turnover threshold that decides which administration collects and audits Corporate Income Tax, VAT and the Tax on Gambling Activities would rise from 10 to 12 million euros. These changes would apply to periods starting on or after January 1, 2026.
5. The bill details the procedure for adapting the Agreement when state tax law changes: the Joint Commission must meet within thirty days of the amendment's approval, and the adaptation must specify its financial effects.
6. A new seventh additional provision would make it easier for taxpayers not taxed entirely by the State Administration to use the deferral of payment for import VAT, and the consumption adjustment for the new tax on e-cigarette liquids would be regulated.

Who it affects

• Large multinational and large domestic groups: They would be subject to the new Complementary Tax, with rules to split revenue between the state and Basque administrations.
• Certain financial entities: They would be subject to the new tax on the interest and commission margin, shared based on turnover in each territory.
• Companies operating in the Basque Country and the rest of Spain: The 12 million euro threshold that decides which administration collects and audits Corporate Income Tax, VAT and the gambling tax would change.
• Non-residents with income in Spain: Their tax would become an agreed tax with its own rules, with criteria to know when Basque rules apply.
• E-cigarette users: The new tax on vaping liquids would be integrated into the Agreement with its revenue rules.

Words worth knowing

Concierto Económico (Economic Agreement)

The law that regulates how the Basque Country collects taxes and how it coordinates with the State Administration.

Tributo concertado de normativa autónoma (agreed tax with its own rules)

A tax included in the Agreement whose rules Basque institutions can set, within certain limits.

Puntos de conexión (connecting criteria)

Criteria that decide whether a taxpayer is subject to Basque or state rules.

Volumen de operaciones (turnover)

A company's total sales or services revenue, used to divide powers between administrations.

Comisión Mixta del Concierto Económico (Joint Commission)

The body where the State and the Basque Country negotiate changes to the Agreement.

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 passed by the full Congreso. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries