The IEE denounces the high tax pressure on companies in Spain

Tax collection in Spain once again set a historical record in 2023. It already exceeds the figures of 2019, the year before the pandemic, by around 50 billion euros. The Institute of Economic Studies (IEE), the study center of the business association CEOE, which this Wednesday presented its Fiscal Competitiveness 2023 report, has criticized the “harsh” tax burdens on companies. The document indicates that the tax pressure in Spain has already reached 38.3% in 2022, 3.8 percentage points less than the European Union average, according to Eurostat data, a gap that has been reducing in recent years. “This does not say anything positive about how the economy is evolving in the country,” said Iñigo Fernández de Mesa, president of the IEE, in the presentation.

One of the main taxes emphasized in the report is the corporate tax. In Spain it represented 2.7% of the GDP and Social Security contributions 9.5%. For its part, the EU average is 3.3% in taxes on the business sector and 7.1% in social contributions. The document adds the weight of the two taxes and concludes that in Spain the burden is 1.8 points above the European average.

The analysis carried out by think tank The employers’ association shows that in Spain social contributions to Social Security represent 25.2% of the total collected, while in the EU the average is 17.7%. On the other hand, corporate tax represents 7.2% of the total, nine tenths less than the average for the Twenty-Seven.

The organization defends that the fiscal effort – unlike the fiscal pressure, it takes into account the difference in the relative income levels of the different countries – in Spain is almost 18% higher than the European Union average. Fernández de Mesa has criticized that it is one of the OECD countries with the highest tax burden. “Among the large advanced economies, none present a greater effort than our country,” he said during the presentation of the study.

The Tax Competitiveness Index calculated by the IEE indicates that Spain, in 2023, was among the OECD economies with the worst tax competitiveness and highlights that there was a strong decline during the last legislature. According to this indicator, Spain was placed, in terms of tax competitiveness, in position 31 of the 38 countries analyzed, three positions above the previous year, but eight positions lower than the 23rd position it occupied in 2019. “This indicates a notable loss of fiscal competitiveness in our country, reflecting the effect of tax increases on companies and entrepreneurs, a trend that the Government seems determined to maintain with continuous tax increases.”

Corporate taxation and asset taxation

The report attacks taxation on companies, ensuring that it is one of the six most burdensome in the OECD, with pressure almost 30% higher than the European Union average. On the other hand, it denounces that property taxation is the second worst in the OECD, only behind Italy, 39.6% less competitive than that of the EU and 37.3% below the average of the club’s body. advanced economies. Regarding personal income tax, the most powerful tax in the system, the document indicates that it represents a burden 6.1% higher than the EU average and 2.2% above the OECD average.