Personal income tax campaign begins with more regional differences in the taxation of wages
There will be a tax premiere this summer. From 1 July to 31 July a new state tax levied will need to be submitted for assets of more than three million euros and this will mainly affect communities such as Madrid, freeing taxpayers wealth tax. The planned deadline is in July because those affected will be able to deduct the amount paid for the property lien transferred to autonomies from 11 April to 30 June and presented as income tax (IRPF). The aim is to prevent high net worth individuals from paying taxes twice for the same taxable event.
This new tax, taxing the 2022 fiscal year, begins to be collected this year. In principle, it is a temporary tribute for 2023 and 2024, included in the package of measures taken by the government to mitigate the effects of the war in Ukraine. Inside Catalonia the government has created a new tranche starting at 3.48%, starting at 20 million euros, to prevent part of this tax from going into the state coffers. It will be entered as an additional 12 million euros. Otherwise, for assets over three million euros, the provisional tax would go into the state coffers when it comes into effect. The current rate reaches a maximum of 2.75% from 10,695,996.06.
State tax falls on assets between 3 and 5.3 million euros, which will be subject to a tax of 1.7%; Between 5.3 and 10.6 million euros will be subject to a rate of 2.1%; and assets over €10.6 million will be taxed at a rate of 3.5%. To determine the amount of this tax, the rules determined in the wealth tax law will be applied. This includes a discount for a general exemption minimum of 700,000 Euro. According to data provided by the Ministry of Finance, this tax is only for 0.1% of all taxpayers, translating to approximately 23,000 taxpayers.
Deletion or maintenance
Although it began with a temporary assignment, the results will be evaluated at the end of the validity period and recommendations may be made for retention or deletion. Introduced to increase collections and harmonize regional regulations, this new tax is structured as a direct, personal and supplemental wealth tax that taxes the net worth of individuals over three million euros.
It applies throughout the national territory, without prejudice to the Basque and Navarrese foral regimes and the provisions of international treaties and conventions that are part of the domestic legal system; and it is not transferable to autonomous communities. Taxpayers are obliged to submit a declaration if it is revealed that the tax quotas calculated according to the tax legislation have been paid after the relevant deductions or reductions have been applied.
The introduction of this new tax particularly affects taxpayers residing in autonomous communities where wealth tax is subsidized, such as Madrid and Andalusia, and to a lesser extent Galicia. Despite domicile, the tax may affect many taxpayers and families, especially business owners, as it touches on corporate structure, the composition of personal and business assets, established compensation systems, and other elements key to asset taxation, as explained by tax advisors.
Madrid is the community that received this new tax with the strongest push. The president of the community opened judicial challenges, with the regional government objecting to the unconstitutionality of the temporary solidarity tax for great wealth and seeking a precautionary suspension. The supreme court has not suspended the measure. Andalusia has also voiced objections. In response, the Catalan employers’ association Foment del Treball opposed the tax, urging taxpayers with a net worth over three million euros to file an administrative appeal when paying the tax to preserve their rights if the measure is later ruled unconstitutional.
Notes: The policy aims to harmonize regional rules, expand the tax base and ensure fair treatment of high net worth individuals. The discussions reflect ongoing debates about wealth taxation, equity, and how best to balance state needs with regional autonomy and economic impact. Sources cited in this overview include government finance departments and regional authorities, as well as industry associations that monitor tax policy developments. These sources provide context for the changes and the potential implications for taxpayers and advisers alike. [citation: Ministry of Finance; regional authorities; Foment del Treball]
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