Sunday, February 25, 2024

Treasury reaches 1,359 million more for the punishment of big companies

The changes to the Corporate Tax for large companies that came into force at the beginning of the year have already left an ‘extra’ collection for the Tax Agency of 1,359 million euros. As an example to get a perspective, almost the same amount (1,423 million) that the Administration stopped earning due to its reduction made in VAT on food.

On the one hand, the Executive implemented, through the same Law approving the tax on banking and energy, a change in Companies to limit the compensation of groups for losses (in two years) up to 50%. In other words, if one company in the group makes a profit of 100 million euros and the other loses 80 million, the tax base is no longer 100 million but 60 million, because the 80 million lost can only be compensated the half. The other half that is not paid will be distributed proportionally over the next ten years. Through this step, the companies stopped being able to pay themselves until October (last collection report published) 781 million euros or, in other words, the Tax Agency received that additional money.

The October report is relevant because it is the first one where the true magnitude of the measure is visible because it is when companies present the second advance payment of Corporate Tax covering the period from April to September, although A is true -anon figure will appear in July 2024, when the complete declaration for the 2023 financial year will be presented.

On the other hand, the General State Budget Law 2022 also includes another change in Companies to impose a minimum rate of 15% of the tax base on groups or companies whose turnover is equal to or greater than 20 million. According to the Treasury forecast, the move will affect 1,070 companies. Through this change, the Administration has raised another 578 million through October, 44.5% more than the 400 million expected.

Energy tax reduction

On the other hand, the reduction approved by inflation and the effects of the war in Ukraine in the VAT rate for electricity, from 10% to 5%, means savings for families and companies until October of 514 million of euros.
Similarly, the reduction of the VAT rate on natural gas from 21% to 5% led to savings of 220 million. Between the two measures, households and companies cut the bill by 734 million euros. However, both measures will no longer be implemented starting next year, leading to a corresponding increase in electricity bills.

Deduction for home rehabilitation

Among the changes in the tax level, the personal income tax reduction stands for taxpayers who rehabilitate houses to make them more efficient. Through this, they collected 104 million personal income tax until October. This measure, which was implemented in October 2021 and extended until 2024. The benefit allows taxpayers to deduct from personal income tax up to 60% of the cost they allocate for jobs to rehabilitate their usual housing or improve the energy efficiency of homes.

Finally, in September 2022, the Government approved a reduction of VAT from 10% to 4% on feminine hygiene and contraceptive products, for which the Administration stopped collecting 16 million euros until October.

World Nation News Desk
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