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Law on tax measures for 2017

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Creation of new taxes and amendment of regional taxes and taxes ceded by the state

On 28 March, the Regional Government of Catalonia published Law 5/2015 on tax, administrative, financial and public sector measures and on the creation and regulation of taxes on large commercial establishments, on stays in tourist accommodation, on radiotoxic elements, on packaged sugary drinks and on carbon dioxide emissions.

The tax measures contained in this law can be summarised as the creation of new taxes and the amendment of regional taxes and taxes ceded by the state. These measures are generally applicable as from 31 March 2017.

We detail the main measures adopted by the regional government below:

Amendments in regional taxes

  • Tax on empty dwellings: a minimum exemption is created for dwellings with an area of 150 m² or less.
  • Tax on stays in tourist accommodation: the taxable event is extended, new exemptions are added (stays for force majeure or for health reasons), the rates are updated, a special rate is established for accommodation located in tourist recreation centres in which gambling take place, and different rates are set for cruise ships depending on whether they dock in port for more or less than 12 hours.
  • Tax on packaged sugary drinks: following the recommendation of the World Health Organisation in its report of 11 October 2016, the regional government of Catalonia establishes a new tax on packaged sugary drinks in response to the effects that such drinks have on the health of the population.
  • Tax on carbon dioxide emissions of motor vehicles: a new tax is created on the CO2 emissions of motor vehicles (passenger cars and motorcycles), as from 1 January 2018 for passenger vehicles and as from 1 January 2019 for motorcycles.

Amendments in taxes ceded by the state

  • Inheritance and Gift Tax: the wording of certain articles is amended in order to address certain problems of interpretation caused by the previous wording.
  • Family Business: business activity of renting properties: it is now not necessary to have business premises, with the hiring of a full-time employee being sufficient to demonstrate the existence of business activity.
  • Gift of money to establish or acquire a company or professional business or to acquire holdings in entities: in its previous wording, it was not permitted to apply the reduction for monetary gifts to a relative in the descending line in the event that said relative used the money received to create a business in corporate form. With the new wording it is now possible to apply the gift to the incorporation of commercial companies.
  • Instalments: applications for payment in instalments will be granted up to a maximum of 5 annual payments providing that a guarantee is provided covering payment of the principal tax liability and late payment interest, plus 25% of the sum of both items.

Transfer Tax and Stamp Duty:

  • Vehicle transfers: the obligation to file a return for vehicles that are over 10 years old when their value is equal to or greater than 40,000 euros is maintained, but it is now specified that the depreciation coefficients for age will not be taken into account when determining their value.
  • Tax rate on real estate and rights in rem over real estate: the rate previously stood at 10%, and now as a result of this amendment, the following scale applies:

Total value of the real estate

From (euros)

Tax due (euros)

Remaining value

 up to (euros)

Applicable rate (%)

0.00

0.00

1,000,000.00

10

1,000,000.00

1,000,000.00

Hereinafter

11

All cases of transfers of movable property are taxed at 5% (previously only motor vehicles).

  • Tax rate in the event of a waiver to the VAT exemption (Article 20(2) of the Law on VAT): the tax rate for stamp duty, notary documents, is raised from 1.8% to 2.5%.
  • Tax credits: new tax credit of 99% is established for the rental of public housing intended for social rented housing and for loan or mortgage subrogation deeds executed by the credit section of a cooperative.

For any further information, please contact:

Elsa García Ribas

elsa.garcia@AndersenTaxLegal.es

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