More than ten billion euros in tax cuts. That is the impact quantified by the Ministry of Finance in amendments that parliamentary groups in Congress intended to introduce to one of the bills in process. According to the document sent to the Chamber by the department headed by Arcadi España, to which DEMÓCRATA had access, the impact of the proposals amounted to 10.017 billion euros.
Finance decided to veto them, exercising the power recognized by the Constitution to exclude from processing any initiative that entails greater spending or a reduction in income. And all the proposals were excluded, with the exception of one, registered by Sumar to raise the income threshold for accessing the deduction for a spouse with a disability. The confederal group decided to lift the veto on that proposal in the Committee's Board, and not on other proposals of its own that Finance had pointed out.
What are the excluded proposals and what impact would they have?
IRPF Deflation
It was proposed by the PP, which intended to adjust the first three brackets of the IRPF to inflation and the thresholds for benefiting from deductions for maternity, large families, or dependents: Impact: 529 million euros
Private Health Insurance
Junts sought to expand deductions for the contracting of private health insurance, to equate their tax regime to that provided for collective policies contracted by companies and self-employed workers. Impact: 504 million euros
VAT Reduction
The BNG proposed a broad battery of reductions in VAT rates applied to multiple products and services, many of them the subject of usual debate in recent legislatures. Namely
- Super-reduced VAT of 4% on water, gas, heat, cold, and electricity bills (3.910 million)
- Super-reduced VAT of 4% on cultural goods, shows, and artists' services (132 million)
- 0% VAT on fishery products (660 million)
- Reduced VAT of 10% on hairdressing, barber, and beauty services (410 million)
- Reduced VAT of 10% on veterinary services (231 million)
- Super-reduced VAT of 4% on adult diapers (20 million)
IAE Compensation
Carles Puigdemont's party proposed that companies could offset the amounts paid for the Economic Activities Tax on their tax bill. Impact: 221 million
Public Pensions from Another Country
The BNG's proposal was to exempt the receipt of public pensions from a foreign country from taxation. Impact: 1.260 billion
Generation tax
Days before advancing its definitive disappearance (in 2028, mind you), the Government once again prevented a vote on the suppression of the Tax on the Value of Electricity Production, known as the generation tax. Junts proposed it. Impact: 1.800 billion
Higher thresholds
Sumar submitted as amendments an update of the thresholds in personal income tax to calculate the untaxed portion of income or determine access to certain deductions, equating these amounts to the interprofessional minimum wage:
- Minimum for descendants (75 million)
- Family minimum (81 million)
- Deduction for a disabled spouse (162 million) *veto overcome
- Exemption of aid received for the rehabilitation of habitual residence in cases of vulnerability (21 million)
Still in the committee stage
With the exception of the aforementioned Sumar amendment, all other proposals have been swept aside in the processing of the bill, a reform to update tax regulations and adapt them to Supreme Court rulings on statute of limitations and to transpose DAC 8, a European directive on administrative cooperation, to enable the seizure of cryptoassets and electronic money.
The initiative is under debate in the committee stage. According to parliamentary sources, PSOE and Sumar considered the possibility of sending the bill to committee during the constitution session, but the risk of it failing due to lack of support postponed the vote, as they inform DEMÓCRATA.
In principle, the groups have agreed to meet again on July 14, before the plenary session, to continue their work and evaluate whether to move the initiative to the next phase.