Important tax changes for the coming year 2023

On 5 October, the Spanish government approved the new tax proposals for the coming year 2023, which will mainly affect large assets and companies and will bring important innovations in taxes such as income tax and corporate tax.
One of the concerns that citizens and business people have is the extent to which they will be affected, both negatively and positively, because among the most important innovations announced are the new solidarity tax on large fortunes and the reduction of the tax burden on low incomes under income tax.

As far as the new solidarity tax on large fortunes is concerned, it should be noted that it only affects net wealth of more than three million euros. Although it is presented as a new tax, it is in fact a copy of the wealth tax, as the rules for assessing assets and the benefits are the same, as are the deduction of debts and the exemption of the main residence up to 300,000 euros. The tax rate is 1.7% for assets between 3 and 5 million euros, 2.1% between 5 and 10 million euros and 3.5% for assets over 10 million euros.
In order to avoid double taxation, citizens may deduct from this state tax the amount resulting from the wealth tax applicable in each autonomous community. Although it is envisaged that this regime will be temporary, a review clause will be included to assess its validity.

In the case of income tax, various measures have been introduced to reduce taxes on lower incomes and increase taxes on higher incomes.
Income from work with wages below 21,000 euros will be reduced (currently up to 18,000 euros) and the minimum exemption amount for filing a tax return will be increased from 14,000 euros to 15,000 euros.
As for capital income, all income from movable capital and capital gains between 200,000 and 300,000 euros will be taxed at 27% and above 300,000 euros at 28%.
The self-employed will also benefit from these measures, as the deductible amount for hard-to-justify expenses will be raised to 7% with a maximum of 2,000 euros, and for those who pay taxes in modules, the net income will be reduced by 5%.

Companies with a turnover of less than one million euros will be taxed at a corporate tax rate of 23%, which will be reduced to the current rate of 2%. For companies covered by the consolidated regime, there is a temporary measure whereby, in 2023, only 50% of the losses of subsidiaries integrated into the group will be deductible when calculating the tax base.

This is a summary of the measures included in the government’s tax package for next year to achieve “a fairer corporate model”.

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