Catalonia recovers the income tax reduction for low incomes and raises it to those of more than 37,000 euros

On the same day that the Catalan Minister of the Economy, Jaume Giró, has proposed raising it in Catalonia for incomes of more than 33,000 euros of tax base, which is equivalent to salaries from 37,000 euros gross per year.

It is a proposal from the Generalitat that plans to be processed as an amendment to the Law accompanying the Budgets of the Generalitat for 2022, with the support of the Govern parties (ERC and Junts) and En Comú Podem.

Thus, the section between 33,000 and 53,400 euros of tax base (salaries between 37,000 and 58,500 euros) will see the tax pressure increase in the Catalan section of personal income tax from the current 18.5% to 18.8% in 2022, with effects on the 2023 Income Statement.

According to the Generalitat, this increase seeks to compensate for the savings that these taxpayers will have due to the reduction also announced this Thursday for the lower brackets, but in practice, it will mean paying up to 0.7% more for taxpayers with higher incomes.

Giró has defended before the press that, with the new proposed scheme, 80% of Catalans will pay less in Income for 2023, since they are the ones who earn less than 35,000 euros per year gross. The greatest savings will be for taxpayers with a taxable base of less than 12,450 euros, through a new regional section with a rate of 10.5%, compared to the current 12%.

With this measure, the Generalitat intends to recover the reduction to low incomes that it approved in 2020 with the purple formation through .

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Precisely from the comuns the increase in taxes on high incomes is defended, despite the fact that Giró claimed that there would be no tax increase in Catalonia in 2022. However, after the agreement with the purple formation to carry out the Catalan Budgets for next year, There are already four bullish news.

Added to that of a higher personal income tax for medium-high incomes announced this Thursday, it is extended to individuals and not only to companies.

In the case of one of the new taxes, the one that will be levied on ultra-processed foods, the Catalan government will carry out a study to decide which products the new rate will apply to. Like the surcharge on sugary drinks created in 2017, it seeks to promote healthy eating, but in the case of ultra-processed drinks, it will affect the pockets of producers and not that of consumers, according to the purple leader Jéssica Albiach to Europe Press.

New distribution of sections

The new regional section will entail a technical adjustment in the rates of the intermediate sections with the division of the current second section -from 17,707 to 33,007 of the liquidable base- in two: a new one from 17,700 to 21,000 euros maintaining the rate of 14%, and one new from 21,000 to 33,000 with a rate of 15%.

Thus, Giró has assured, taxpayers with salaries of less than 35,000 euros gross per year are favored, which represent 80% of them, but he has maintained that this will not come into force until 2022 with the Budgets, so that the Taxpayers who should have benefited from the income tax reduction agreed with the comuns in 2020 and knocked down by the TC will have to pay an amount this year that will not be affected by either of the two measures.

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In the 2023 Income Tax return, for example, a single filer without children with an annual gross salary of 20,000 euros will pay 104 euros less per year (-7.7%), while if he has a spouse and an older dependent child three years will pay 86 euros less (7.1%).

The measure declared unconstitutional of the increase in the minimum exempt for the lowest incomes meant a maximum amount of savings of 66 euros and benefited a total of 205,000 people: “The nature of the measure is different: an increase in the minimum exempt was overturned. Now a new section is created,” said Giró.

other changes

The Government has also proposed the extension of the assumptions for deduction of the rent of the habitual residence to single-parent families, that is, to those with dependents up to 21 years of age who live together and depend economically.

Taxpayers can deduct 10%, up to a maximum of 300 euros per year, of the amounts paid in the tax period for rent of the habitual residence, provided that the requirements already established by law are met, reports Europa Press.

The Ministry of Economy and Finance also proposes that there be another amendment to extend to single-parent families in the cases for the deduction for the birth and adoption of a child, of up to 300 euros per year.

It also proposes including in the mechanical traction vehicles that will be exempt from paying the CO2 tax all those passenger cars, vans and motorcycles that are temporarily deregistered.

Like the other four measures, the Government proposes to apply in the form of an amendment to the Inheritance Tax an assimilation to ascendants-children for people who are or have been in foster care, who are currently considered strangers -group IV-.

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The Generalitat calculates that it will stop collecting 24 million euros with the first four reduction measures, while in the last one the impact cannot be calculated.

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