In his search for the necessary parliamentary support to get the general state budgets for 2019 approved, Pedro Sánchez, the current president of the Spanish government and head of PSOE, the Spanish traditional left-wing party, has reached an agreement with Unidos Podemos, the new extreme left-wing party led by Pablo Iglesias. This agreement is just a programmatic agreement without any legal effect, among other reasons because they would still need more parties to enter into the agreement to have the majority required to approve the general state budgets. Below is a brief summary of the measures we consider most relevant:

Personal income tax

In terms of personal income taxes, they agreed to raise both the tax rates applicable to the general tax base (employment incomes, rental incomes, etc.) and to the savings tax base (dividends, interests, derived from the transfer of assets, etc.). The tax rate applicable to the general tax base would be increased by 2 percentage points for taxpayers with incomes higher than 130,000 euros and by 4 percentage points for incomes exceeding 300,000 euros. The tax rate applicable to the savings tax base would be increased by 4 percentage points for incomes exceeding 140,000 euros, standing at 27 percent. Please note that these incomes are currently taxed at a progressive tax rate with a maximum rate of 23 percent as of 50,000 euros of incomes.

Corporate income tax

Further amendments to the corporate income tax have most likely been agreed upon already. The following is a brief summary of the most relevant measures:

  • Creation of a 15% minimum tax rate

In order to ensure that the effective taxation is not affected too much by the use of deductions and other tax allowances available, a minimum “effective” tax rate of 15 percent of the positive corporate income tax base would be required. This measure would only affect groups of companies that pay tax on a consolidated basis and companies that are not part of groups but whose net turnover is equal to or greater than 20 million euros.

  • Limitation of dividends and capital gains double taxation exemption

The current rules allow companies not to tax dividends and capital gains generated by their participation in subsidiary companies (subject to a number of conditions, e.g. to have a minimum of 5 percent in the capital of the subsidiary), in order to avoid double taxation. The agreed amendment would reduce this full exemption (100 percent) to a partial exemption of 95 percent.

  • Tax on financial transactions

The parties also agreed to create a tax on financial transactions, consisting of a tax of 0.2 percent on the purchase of Spanish listed shares carried out by operators in the financial sector. Only shares issued in Spain of listed companies with a market capitalization of more than 1,000 million euros would be subject to that tax. Debt, both public and private, and financial derivatives would be excluded from the scope of the tax.

As you might have noticed, and as it might be expected from an agreement between two left-wing parties, the overall trend is an increase of the tax pressure. However, as said, this is for the moment just a political agreement. We will see what happens, but the next few months will be decisive.


Mariano Roca is a tax and private client practitioner focused on corporate and individuals advice (specialized in tax, wealth and inheritance advice for HNWI). He began his professional career in Cuatrecasas Gonçalves Pereira from 1997 until 2012. In 2012, he joined KPMG from 2012 until 2015 where co-led the family business and private client practice in the Barcelona, Girona, Balearic Islands, and Andorra offices. On January 2016, he joined Marco Legal, Abogados & Economistas, leading as a partner the firm’s tax department. Mariano has been listed in Best Lawyers since 2013 and won the “Lawyer of the Year” award in 2014 and 2015. He has been once again recognized with the “Lawyer of the Year” award in tax practice for 2018.