• Sat. Apr 20th, 2024

Tax Competitiveness in Spain: Facing OECD Pressures with Unfavorable Corporate and Personal Income Taxes

BySamantha Jones

Apr 3, 2024
IEE criticizes the excessive tax burden on companies in Spain

Spain has experienced an unprecedented tax collection in 2023, reaching a record of approximately €50 billion above the 2019 figures. However, despite this success, the Institute of Economic Studies (IEE) published its Fiscal Competitiveness 2023 report with criticism towards the high tax burdens placed on companies in the country. The report highlighted that tax pressure in Spain in 2022 was at 38.3%, which is below the European Union average by only 3.8 percentage points, but still a concern for economic development in the country.

The study emphasized the corporate tax and Social Security contributions as two major areas of concern for Spain’s fiscal policy. The corporate tax accounted for 2.7% of GDP, while Social Security contributions amounted to 9.5%, both higher than the EU average of 3.3% and 7.1% respectively. The combination of these taxes exceeded the European average by 1.8 points.

The IEE pointed out that Spain’s fiscal effort was nearly 18% higher than the EU average, making it one of the OECD countries with the highest tax burden. Moreover, Spain ranked poorly in terms of tax competitiveness among OECD economies, experiencing a decline over the last legislature despite improvements from the previous year.

Despite being slightly lower than Italy’s unfavorable property taxation ranking, personal income tax in Spain was noted to be significantly higher at €6.1% compared to EU average of €4.9%. Additionally, corporate taxes were deemed less favorable as they were nearly €4 billion above EU average.

In conclusion, while Spain has achieved remarkable successes in terms of its budgetary goals, it still faces significant challenges regarding its fiscal policy and competitiveness within OECD economies due to its high taxes on individuals and businesses.

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

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