During the press briefing following the Council of Ministers meeting, a spokesperson outlined the main directions of the newly adopted measures. The government aims to safeguard the most vulnerable incomes by expanding the personal income tax deduction to half of employees and by boosting the state’s revenue through new taxes on large fortunes.
The package features notable steps including an increase in the personal income tax burden for those earning above certain thresholds and the introduction of a solidarity tax targeting the wealthiest. The government expects to raise more than one and a half billion euros from assets exceeding three million euros.
New tax measures
Central to this plan is a solidarity levy affecting around 23,000 Spaniards with wealth surpassing three million euros. Officials stated the new tax would apply in the 2023 and 2024 fiscal years, with projected collections of 1.5 billion euros. Revenue would be split across three brackets: a 1.7 percent rate for assets valued between 3 and 5 million euros, a 2.1 percent rate for holdings between 5 and 10 million euros, and a 3.5 percent rate on assets above 10 million euros.
Concurrently, the government intends to raise capital income taxes for high earners: the top rate on personal income from above 200,000 euros would climb to as much as 27 percent, and capital gains above 300,000 euros would be taxed at 28 percent, two percentage points higher than current levels. This move is paired with strengthened reliefs for middle and lower income groups, promising a more progressive tax mix.
In addition, the administration plans to expand relief for lower- and middle-income taxpayers. The current tax benefit for incomes up to 18,000 euros would be increased to 20,000 euros, translating into significant annual savings for eligible households. The government projects a total saving of 1,881 million euros through this adjustment.
Income from work will see a new exemption for earnings up to 15,000 euros, up from the previous threshold, which effectively removes tax on the first slice of earnings for many workers. This reform is designed to lift the tax burden on low- to middle-income families and support disposable income at a critical stage of household budgeting.
There is also a corporate tax dimension. The government will lower the corporate tax rate to 23 percent for small and medium-sized enterprises with annual turnover under one million euros. Simultaneously, the previous practice allowing large business groups to deduct losses from prior years will be reined in, with a temporary cap on the amount of losses that can be written off. These changes are projected to benefit about 407,000 companies and generate substantial savings, estimated around 292 million euros. In contrast, large consolidated groups can only deduct half of their losses in 2023 and must defer the remainder to 2024, a policy shift expected to raise tax receipts by 2,439 million euros across 2023 and 2024 and affect only about 0.2 percent of companies.
Finance authorities clarified that this is not framed as a simple tax increase, but as a postponement of compensation for negative tax bases, allowing for a smoother alignment of corporate tax obligations over time.
Another element of the fiscal package is the reduction of value-added tax on essential feminine hygiene products from 10 percent to 4 percent, responding to concerns about affordability and access for all households.
Up to 3.144 million in two years
The government argues that the overall tax package will contribute to a fairer society, with net tax revenues projected to reach 3,144 million euros over the next two years. This estimate was presented by the Finance Minister at the briefing, who emphasized the plan’s intent to balance revenue needs with social objectives [Ministry brief, 2023].