2023-07-17 11:51:13
The above-expected growth in Catalonia (5.5%) last year, as at the state level, filled the coffers of the Generalitat more than expected by the Catalan administration itself. Last year, the collection obtained by the Tax Agency of Catalonia (ATC) surpassed for the first time the barrier of 5,000 millionup to 5,024 million euros, “the highest figure in the historical series” (the Agency was created in 2008), driven by economic activity and inflationwhich raises the bases on which taxes are levied.
In fact, the income obtained finally exceeded by more than 500 million what the Catalan treasury itself anticipated, according to the ATC’s 2022 report. For this 2023, with a lower expected economic growth, around 1.7 %, although it could raise it to around 2%, the collection of these taxes will again be below 5,000 million, around 4,900, according to Government estimates. In any case, it is a small part of the total income, since those from the regional financing modelwhich include participations in personal income tax or VAT, among others, amounted to more than 25,000 million.
The two main characteristics of the rise in the collection of own and ceded taxes were the rise of the tax more closely linked to bricks, that of patrimonial transmissions, which accounted for 57 of every 100 euros entered by the Catalan treasury; and the slowdown in succession rate after a 2021 in which the greatest impact was recorded due to the deaths caused by the pandemic, whose peak was in 2020, but which is explained by the fact that the beneficiaries have six months to pay the tribute.
The figure reached in income from own and transferred taxes represents an increase of 11.83% compared to 2021 and a level of compliance over the forecast of 111%. The lien of patrimonial transfers and documented legal acts (ITP and AJD), with 2,867 million, accounted for more than 57% of the total. Despite the rate of growth, this tax is still very far from the more than 3,800 million of 2006the peak of the real estate ‘boom’ that later ended in a crisis and tax collection plummeted to around 1,000 million in 2013.
So far in 2023 (until May) this tax is again registering decreases of 10.1% in the aspect of patrimonial transfers of 15.7% in that of legal acts, for the rslowdown in the real estate market due to the rise in interest rates. The sum of both taxes is budgeted at more than 2,600 million this year. The design of the regional financing system, expired since 2014, makes the community once again highly dependent on income from bricks, as happened after the outbreak of the crisis in 2008.
pre-pandemic levels
In 2022, the large taxes, such as the ITP and AJD, heritage or successions and donations exceeded, in any case, the levels of 2019, the year prior to the pandemic. On the other hand, others, such as gambling or the tax on commercial establishments, have not yet recovered that level.
The 13.65% increase in the ITP and AJD, the tax that provides the Generalitat with the most income, could be due to in 2022 to the progress of real estate operations before the start of a stage of rising interest rates by the European Central Bank (ECB) to combat inflation caused by the war in Ukraine. This stage began in July of last year and in just one year it has gone from 0% to 4%. The growth in collection with these taxes linked to the sale of second-hand homes (new ones are subject to VAT) in relation to 2019 is 27%, as stated in the ATC report.
If the ITP is broken down, the part of property transfers, which accounts for almost three out of every four euros entered by the tax, grew by 13.3% compared to 2021 and 38.9% compared to 2019. The operations of urban real estate transfers, with an increase in self-assessments of 4.1% and in the tax base and quota of 16.1%. In the section on legal acts, the increase was 13.2% compared to 2021 and 33.9% compared to 2019.
The second great tribute of the Generalitat, that of successions and donations, reached 893.08 million euros, representing an increase of 2.55% with respect to the previous year. In the inheritance section, the increase was 0.4% and in the donations section it registered a decrease of 9.8%. According to the ATC report, the slight growth in successions reflects the slowdown in the trend of the pandemic yearswhen a greater number of inheritances and a higher amount than usual were liquidated.
Slowdown after the record with inheritances
In fact, in 2020, the year the pandemic broke out, the collection from inheritances was 596.5 million, while in 2021 it exceeded 950 million. The increase is due to the fact that the term to settle the tax is six months from the date of death and due to the consolidation of the latest tax reform that, as of January 1, 2020, increased its taxation.
In it estate taxthe collection reached 690 million, 15.76% more than the previous year due to the higher income of the annual campaign (2021) and the derivatives of management and inspection.
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Gambling tax revenue, at $200 million, increased by 22.27%, but remains below the 2019 level (225 million). Other taxes such as the one that affects large commercial areas, with 10.13 million, registered an increase of 51.14% compared to 2021; the new levy on carbon dioxide emissions from mechanically driven vehicles (IEDC), which applies to passenger cars, vans and motorcycles based on 2021 CO2 emissions, affected 4.6 million vehicles.
It is the most massive tax that the ATC manages, with 55 million euros, which represented a decrease of 16.5% compared to the previous year. The reduction is due to a review of the register derived from the allegations received during the 2020 campaign. There were annulments and cancellation of rights that did enter into 2021.
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