The tax reform designed by the Committee of Experts

Last Friday, the Committee of Experts designated by the tax authorities to study the reform of our tax system presented its report to the Spanish cabinet. After making an extensive analysis of the situation, the Committee of Experts submitted a 444-page document containing 125 proposals with 270 changes, covering almost the entire tax system and aimed at contributing to fiscal consolidation, a more competitive economy, bringing up savings and raising employment.

One of the main aims of the proposal is to shift the tax burden from direct tax and social security contributions to indirect and environmental taxes, while preventing a drop in collection. To do so, the first section of the report details in several chapters the measures proposed in relation to the different taxes making up the tax system: personal income tax, corporate income tax, wealth tax, VAT, excise and special taxes on alcoholic beverages and tobacco, environmental taxes and taxes on financial and insurance activities.

Next is a second raft of measures proposing an in-depth transformation of the social security contributions to include them in the general tax table. The Committee also proposes a number of particular measures to combat tax fraud, some with a general scope and others specifically for personal income tax and VAT. Lastly, the report includes measures for decentralizing tax through the autonomous communities and other initiatives to foster tax neutrality and market unity.

Although the report of the Committee of Experts is not binding, we consider it of interest to carry out an analysis of the proposed measures to have a better knowledge of the scope and implications of the proposals which the Government will now begin to study with a view to presenting the new tax reform, expected for this summer.

Garrigues Tax Department