On 29 December 2022, Law 38/2022 on the establishment of temporary energy levies and levies on credit institutions and financial credit establishments and creating the temporary solidarity tax on large fortunes and amending certain tax rules, entered into force.
Regulated in Article 3, it is a direct tax, of a personal nature and complementary to Wealth Tax, which is levied on the net wealth of individuals exceeding 3.000.000 euros.
The regulation provides for the application of the Wealth Tax rules set out in Law 19/1991 of 6 June 1991, regarding the determination of taxable persons, exemptions, and the determination of the taxable base.
The Temporary Solidarity Tax on Major Fortunes, hereinafter referred to as the IGF, is intended:
- on the one hand, to increase the tax effort of those taxpayers with a greater economic capacity to be able to face the inflationary and energy crisis and, on the other hand, to increase the tax effort of those taxpayers with a greater economic capacity to be able to face the inflationary and energy crisis,
- on the other hand, to harmonise the different Autonomous Communities in property taxation.
To avoid double taxation, they will only be taxed on the part of their wealth that has not already been taxed by their Autonomous Community. This is especially relevant in those regions where the Wealth Tax is subsidised.
The IGF will be applied throughout Spanish territory, without prejudice to the formal tax regimes of the Economic Agreement and the Economic Agreement in force in the Historical Territories of the Basque Country and the Foral Community of Navarre and may not be transferred to the Autonomous Communities.
The deadline for filing the tax will be from 1 to 31 July using Form 718.
Although it is a temporary tax, only for the years 2022 and 2023, the law provides for an assessment at the end of the period of validity for its maintenance, modification, or elimination.
The taxable base shall be reduced by 700.000 as the minimum exempt amount and the following rates shall be applied to it:
| Net taxable income – Up to EUR | Quota – Euros | Remaining Taxable income – Up to EUR | Applicable type – Percentage |
| 0,00 | 0,00 | 3.000.000,00 | 0,00 |
| 3.000.000,00 | 0,00 | 2.347.998,03 | 1,7 |
| 5.347.998,03 | 39.915,97 | 5.347.998,03 | 2,1 |
| 10.695.996,06 | 152.223,93 | From now on | 3,5 |
When the sum of the total personal income tax, IP and IGF tax payments exceeds 60% of the personal income tax base, the IGF tax liability shall be reduced until this limit is reached, without the reduction exceeding 80% of the IGF tax liability prior to this reduction.
Since its passage through parliament, it is a tax that has generated too much controversy, as many tax experts consider that it encroaches on the competences of the Autonomous Communities.
In April 2023, the Constitutional Court admitted the appeals lodged by Madrid, Andalusia, and Galicia. If this tax is finally declared unconstitutional, taxpayers will be able to reclaim the fees paid.
Roberto Cerrato
