New Solidarity Tax to affect wealthy Non-Residents and Residents
The Spanish government is planning to implement a new tax with the intention of taxing large fortunes. The tax has received the colloquial name of “Solidarity Tax”, and after having been approved in the Congress, its final approval in the Senate is pending.
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Who does the tax affect?
The tax will affect estates whose value exceed 3 million euros, applying a tax rate between 1.7% and 3.5%.
This tax would be complementary to the current wealth tax which has been collected by the Autonomous Communities. In practice, taxpayers located in the Autonomous Communities in which the Wealth Tax is very low or non-existent (for example, Andalusia or Madrid), would be the most affected by the new tax, since the Wealth Tax will be deductible in the Communities where it already exists, in order to avoid double taxation.
In territories such as the Valencian Community, where the Wealth Tax is significantly higher, it is not expected to have a big impact.
Are non-residents exempt?
This measure will affect not only tax residents in Spain but also non-residents, and probably in a worse way, as only residents could enjoy the Wealth Tax deductions.
It is expected that the solidarity tax will affect a total of 23,000 patrimonies, and that it will be in force at least during the fiscal years 2023 and 2024.
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