Spain to impose a temporary tax on the rich in 2023

The Spanish Minister of Finance, María Jesús Montero, explained last week some more details of the so-called 'tax on large fortunes' announced by the Madrid government.

According to Montero, her department wants the rich to start paying the tax in 2023. The validity of this new tax would be linked to the duration of the current crisis, so it would be temporary. It will be suspended when the general economic situation improves, according to the current plans of the executive.

The announcement of this new tax by the central government came after the announcement by the regional government of Andalusia that it would suspend the collection of the Wealth Tax (Impuesto del Patrimonio) in its territory.

Minister Montero did not provide, last Thursday, more details about the new tax during her speech before the plenary session of the Congress of Deputies (lower house of Parliament) to explain the spending limit proposed by the Government for the draft budget for 2023.

Therefore, it is still unknown what is the income threshold above which the government considers a taxpayer to be "rich" and, consequently, subject to the new tax.

In any case, Montero explained that this new tax on the rich will not be included in the budget proposal. She suggested that it could be processed along with the other two new temporary levies announced by the government on banking and energy companies.

In force from 1 January

"We will have to see the formula, not everything can be included in the Budget Law," explained the Minister of Finance in the corridors of Parliament, after her appearance before the Plenary.

"As has happened with energy and banking taxes, we will work on a temporary formula and later the circumstances will say whether it is necessary or not to extend it. It will be fundamentally linked to the entry into force on January 1," she said.