Updated on Thursday, 16 September 2021 – 10:53
After the Google rate patch, Spain awaits the global reform that burdens the activity of the digital giants
Mara Jess Montero, Minister of Finance, .
“The corporate tax has no horizontal equity.” This is the main conclusion drawn from the meeting on taxation held this Wednesday by the General Council of Economists. While awaiting an international agreement that would determine an effective minimum taxation, with a profound national tax reform in the making and conditioned by its new Google rate, Spain inevitably faces a rethinking of corporate tax. “Our tax rate of 25% is not competitive,” believes Jorge Onrubia Fernndez, professor of Applied Economics at the Complutense University of Madrid, about a rate that actually varies according to sectors and activities, see the bonuses and deductions obtained by housing rental companies, shipping companies, those in the audiovisual sector or those that return their investment in research and development, “unjustified differential treatments”, according to Onrubia’s analysis.
For Eduardo Sanz Gadea, former State Treasury inspector, “the collection will come from the profits of the companies and not from moving the BOE“However, the Government has opted to raise the nominal rate for some companies, such as banks and oil companies, from 25% to 30%.” Raising it to hydrocarbon companies does not solve anything, “says Onrubia, which also warns about the risk that the increases will end up being passed on to the citizens, so that they are translated into “a tax on consumption.” Something has been wrong, it seems, since Spain collected practically 45,000 million euros in corporation tax. and in the pandemic year 2020 it has already dropped below 16,000 million.
The collection theses of Pedro Sánchez’s Executive have also led him to shape new tax figures, such as the Tax on Certain Digital Services (IDSD) or Google rate, the one applied to financial transactions (Tobin rate) or the new VAT charges for sugary products. As for the IDSD digital rate, its days are supposedly numbered, as a patch is supposed until the digital giants (Google, Amazon, Facebook or Apple) are really affected by a global corporation tax, promoted by the Organization for the Economic Cooperation and Development (OECD) and designed to be able to load the activity of these businesses in the territories where it occurs, regardless of whether there is a physical presence or not.
The Executive has calculated the potential collection of the Google tax at about 968 million euros, a figure that, even lower than the first estimates of the Treasury team, continues to seem exaggerated to different tax analysts.
Within the framework of the OECD, it has already been agreed that the minimum corporate tax rate is 15%, within a plan that is based on two pillars: the right of each nation to collect for the activity that large companies carry out in their territory even if they do not have a physical presence, on the one hand, and a minimum tax base for large corporations, for another. Now, does this reform really favor Spain, which is also forced to eradicate the sham of its pioneering digital tax?
“Darn little collection”, considers Abad, who insists that “the benefits will come if there is business confidence”, regardless of the regulatory reforms: “I do not predict more than 700 million. I am very pessimistic“, said this expert in the framework of the conference The Corporate Tax Reform. Regarding the fundamental first pillar, the tax on corporations without physical presence, Onrubia quantifies” a range between 1,000 and 1,200 million euros “, that is, not much more than what the Spanish Google rate already anticipates to collect annually.
The corporation tax is a challenge for the coffers of the Spanish State. In 2007, economic boom times, around 45,000 million of collection, but in the recent era it has deflated below 25,000 million, also in the years prior to the coronavirus crisis. In 2019, the collection was estimated at 23,733 million euros (-4.4% compared to the previous year), a figure that took on a meager form in the anomalous year 2020, with 15,858 million (-33.2% year-on-year).
According to the criteria of
The Trust Project Learn more