The first consequences on the public accounts of the ruling of the Constitutional Court annulling the increase in the corporate tax that the Ministry of Finance approved in 2016 during the mandate of Cristóbal Montoro are already a reality. During the month of February, the Tax Agency has had to face the return of more than 300 million to large companies that appealed the reform before the court ruling. They are the first refunds since financial sources estimate that the final amount could amount to 3,000 million.
The court of guarantees considered it unconstitutional that a royal decree-law was used to approve the measure and now the Treasury has to face million-dollar refunds. In the latest tax collection report you can read that its main novelty is “an extraordinary refund in corporate tax linked to the ruling on RDL 3/2016”, that is, to the Montoro reform. “The amount exceeds 300 million,” adds the tax administration.
Large companies affected by the TC ruling and that appealed the Montoro reform admitted a positive fiscal impact in their 2023 income statements. Telefónica estimated the recovery of 541 million; IAG, 191 million; Ferrovial, 37 million; Indra, 14.5 million; or FCC, of 6.4 million, among other companies.
The current Ministry of Finance assumes the collection and is negotiating changes in the corporate tax law to recover the income they are losing. To this end, the PSOE has registered an amendment in the Congress of Deputies to the anti-crisis decree that is being processed as a bill. The text proposed by the socialists, who are seeking the necessary votes to approve this measure, seeks to “avoid the loss of revenue that implies the expulsion from the legal system of the legal provisions affected” by the Constitutional ruling.
The same tax collection report from the Tax Agency also includes a positive impact on public revenue as a result of the progressive recovery of the electricity tax. The treasury has received 54 million more since the beginning of the year due to this tax change. From January 1 to March 31 of this year, the electricity tax rate is 2.5%, compared to the 0.5% that was in force since September 15, 2021. Among the next April 1 and June 30 the rate will rise to 3.8% and, subsequently, the original 5.11% will be recovered.
Tax revenues once again reached a new historical record in 2023. The Tax Agency collected 271,935 million euros, 6.4% more than in 2022. In January and February 2024, tax collection continues to grow by 6.6% and 5.9%, which suggests that at the end of the year the records will be pulverized again.
In these first two months of the year, and in line with the 2023 collection, income continues to increase thanks, mainly, to the improvement in personal income tax, which grows by 8.1% in homogeneous terms. There are more and better jobs. VAT revenues, for their part, grow by 4.3% at the beginning of 2024.
Accompanying the collection data, the Ministry of Finance has today published the final budget execution data at the end of 2023. The public deficit finally closed at 3.64% of GDP, below the provisional data advanced last week. This figure certifies that Spain once again complied with the commitments agreed with the European Commission for the fourth consecutive year. The Government and Brussels had agreed on a gap of 3.9%.
In a year of return to fiscal rules in which the commitment is to reach a deficit of 3%, the Treasury has announced that as of February the budget gap stands at 0.61% of GDP, compared to 0.64% in the same period of 2023. In this way, the deficit until the second month of the year stands at 9,466 million.
