Draft Budget Bill 2021

Attached is a brief summary of the tax measures introduced in relation to the 2021 Budget Bill.

At yesterday’s Council of Ministers, 27 October, the Draft State Budget Bill for 2021 was approved, of which the full text is not yet available.

However, based on the Press Release of the Council of Ministers, we can indicate a series of proposed modifications in relation to the tax area that affect:

IRPF

• It is increased by 2 percentage points for taxable income over €300,000. This would mean that, if the Autonomous Communities do not modify their rates, the maximum marginal tax rates will be between 45.5% and 51.5%.
• The savings rate increases by 3 points, with the marginal rate rising from 23% to 26%, from €200,000 and above.
• The maximum contribution to individual pension plans is reduced from €8,000 to €2,000, raising the joint limit for individual contributions and employment plans from €8,000 to €10,000.

IP

• The marginal rate of the last tranche of the state rate is increased from 2.5% to 3.5%. This will affect those Autonomous Communities that do not regulate this issue, as they have competence over the rate and, in some of them, the rate is already higher than 3%.
• It provides for the indefinite nature of the tax, which will not have to be extended each year.

IS

• The exemption for profits received and for capital gains generated on the transfer of significant shareholdings in subsidiaries falls from 100% to 95% although, in principle, it will affect companies with a net turnover of more than €40m. Companies with a lower turnover may continue to apply the 100% exemption on dividends and capital gains for the next 3 years.
• The draft law on measures to prevent fraud, for its part, seeks to return to the AEAT the power to verify the requirements of SICAVs and to modify the SOCIMI regime, subjecting undistributed profits to a 15% tax on profits not distributed to their members.

VAT

The sale of sugar-sweetened beverages in food shops will be taxed from 10% to 21%. Sales in catering establishments will remain at a rate of 10%.

Tax on Insurance Premiums

The tax rate is increased from 6 to 8%.

Tax on Hydrocarbons

The general state rate for diesel oil is increased from 30.7 cents per litre to 34.5 cents per litre, but without affecting diesel oil for professional use and subsidised diesel oil. It should also be noted that other tax measures are in the pipeline in relation to the following taxes:

• New tax on non-reusable plastic packaging
• New State Tax on Waste
• Tax on Certain Digital Services
• Tax on Financial Transactions

We will keep you informed of the progress of these measures and remain at your disposal for any further clarification.