Rise in VAT rates in Spain - Spanish Vat

Predictably, when the economy has recovered will increase the general VAT rate from 16% to 18% and reduced from 7% to 8% while maintaining the 4% in Spain.

From the first of July 2010 the Spanish standard rate of VAT will move up two points and the lower rate will make a point, while the super-reduced rate will remain applicable to goods of primary necessity.

"In 2009 there has been no change in taxes and domestic demand has been very low. We believe that trust is the strongest impact on consumption and we believe it is consolidated then", Stressed Elena Salgado, Spanish second vice president and minister of Finance.

For the second quarter of 2010 was expected positive growth of the Spanish economy. Spain is currently the second country Europe that less revenue is VAT in relation to GDP and only half of the collection is produced in general (in Germany is 85%).

Also increase the taxation of savings income from 18% to 19% for the first 6,000 euros in profit and the rest taxed at 21%, as announced by Salgado.

This is stated in the Bill General State Budgets by 2010, the Government has recently approved at an extraordinary meeting of the Council of Ministers.

Along with these tax changes will eliminate a general deduction of 400 Euros in income tax established for employment income earners and economic activities.

The circumstances that led to the creation of this deduction, announced in the last election campaign to help families they had to face a higher rate of Euribor or high inflation, have disappeared today.

The Government has also approved five-point drop in corporation tax to 20%, for SMEs with fewer than 25 employees and revenue below 5 million to maintain or create jobs and will relocate to that extent also the Self.

These tax changes will report to the Spanish Treasury of the VAT increase of 5,150 million euros, the abolition of the deduction of 400 Euros and 5,700 million other change in the taxation of savings income will enter additional 800 million. For its part, the reduction of corporation tax will erode government revenues by 700 million Euros.

All these tax measures will mean, therefore, additional revenues of nearly 10,000 million Euros in state revenues (a point of GDP), 6,500 of which have an effect on cash during 2010, which will reduce by three tenths of stability target adopted Government for the State.

The minister stressed that with these measures, the Executive asks its citizens a "solidarity effort to address growing social protection expenditure, although this effort will be moderated and so will also help moderate the rebalancing of public accounts and increasing the tax burden next year ".

Therefore, the greater fiscal effort is carried out by having more capacity. Of the 12.5 million taxpayers who report capital gains, 94% state income below 6,000 Euros and account for 17% of total revenue for the same income. By contrast, 6% of taxpayers who report income exceeding € 6,000 giving rise to 86% of revenue for this category.

The VAT increase to apply from the first of July 2010 because the Government considers that from then on will have begun the economic recovery and because the strongest impact on consumption is trust.