The Constitutional rejects a precautionary suspension of the tax on large fortunes

The Plenary of the Constitutional Court has refused to temporarily suspend the tax on large fortunes that began to be collected last year, as requested by the Junta de Andalucía.

Oliver Thansan
Oliver Thansan
21 March 2023 Tuesday 05:37
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The Constitutional rejects a precautionary suspension of the tax on large fortunes

The Plenary of the Constitutional Court has refused to temporarily suspend the tax on large fortunes that began to be collected last year, as requested by the Junta de Andalucía. That tribute approved just two days before the end of 2022 was intended to counteract measures such as the one adopted by the Junta de Andalucía to suppress the wealth tax by way of 100% bonus.

What the Constitutional Court did is admit the aforementioned appeal of the Board for processing. The Constitutional Court has recalled today that "the appellants allege that the aforementioned law could imply a violation of the financial autonomy of the Autonomous Communities and the block of constitutionality in matters of ceded taxes, as well as the infringement of the right to political representation, of the principle constitutional and institutional loyalty and the principle of legal certainty".

The tax is paid by taxpayers with assets of more than 3.7 million euros. In addition to the Board, other resources are prepared, such as the one promoted by the Catalan employers' association Foment through a parliamentary group in Congress.

In Catalonia, the Government of the Generalitat approved raising the wealth tax in Catalonia retroactively to January 1 to capture the extra 12 million in revenue that the new tax on large fortunes of the central government will contribute and that accrues on 31 from December. In case of not doing so, that money would go to the Spanish Treasury.

Although the main objective of the new state tax on large fortunes was to tax high net worth in those communities where the net worth was subsidized to 100%, the high tax rates have meant that in communities such as Catalonia there are some taxpayers who will see their tax bill increase. In the same way, there is a large group of taxpayers with millionaire assets in Madrid and Andalusia who will continue to "escape" from paying for assets. The design of the new state tax implies that it begins to be paid from 3.7 million euros. Below, nothing.

According to Fedea estimates, the new tax will affect Madrid and Andalusia, but also eight other regions where it is already paid: Galicia, Asturias, Cantabria, Murcia, the Balearic Islands, Navarra and the Basque Country.

The projections made by Funcas and Fedea on how much a taxpayer in Catalonia should pay for this new tax with a heritage of 40 million rises to more than 168,000 euros. It is 17% more than what they paid until now only for equity. Now that extra will be paid to the Generalitat.