All Things Newz
Law \ Legal

Spain Reveals Details Of New Solidarity Tax On Wealth Over €3m – Wealth & Asset Management


To print this article, all you need is to be registered or login on

The new Solidarity Tax (Impuesto
Temporal de Solidaridad de las Grandes
) will operate as an additional
wealth tax for individuals whose taxable wealth exceeds

Spain already has a wealth tax (Impuesto sobre el
) which is fully devolved to the 17 Autonomous
Regions (Comunidades Autónomas) of Spain, with each
Region having the authority to set their own wealth tax rates,
allowances and reductions.

Madrid applies a 100% tax credit for wealth tax purposes,
meaning that wealth tax has effectively been abolished in that
Region. Andalucía recently announced that it will follow in
the footsteps of Madrid and eliminate wealth tax with effect from
31st December 2022. Murcia has also declared it is considering
doing the same, and Galicia has increased the wealth tax credit
from 25% to 50%.

The new Solidarity Tax will be a national tax governed by the
central Government; it will therefore not be ceded to the
Autonomous Regions. This will prevent the Autonomous Communities
from modifying the tax rates or introducing additional allowances
and tax credits. One of the principal aims of the new Solidarity
Tax is to harmonise the rules across the Autonomous Communities in
relation to the taxation of wealth.

In many Autonomous Communities where wealth tax still applies
(and where the wealth tax rates are the same as the Solidarity Tax
rates), the Solidarity Tax will not create an additional tax burden
on individuals who live there, as any wealth tax liability can be
credited against the Solidarity Tax.

It will mainly affect individuals who live in the Autonomous
Communities of Madrid and Andalucía, where a 100% wealth tax
credit applies, effectively reducing wealth tax to zero in those

However, it will also affect individuals resident in Regions
which have marginal rates of wealth tax that are lower than the
rates of Solidarity Tax or where the top rate of wealth tax is
lower than the 3.5% top rate tax of Solidarity Tax (such as in
Asturias, the Balearics, Cantabria, Cataluña and Murcia).
Individuals with high levels of wealth who are resident in those
Regions could end up paying an additional amount of Solidarity Tax
over and above the wealth tax they currently pay.

Main highlights

  • The new Solidarity Tax is intended to be a temporary tax that
    will apply for two tax years.

  • It will only affect individuals whose taxable wealth exceeds

  • The tax will be assessed at 31st December each year.

  • The legislation needs to be approved by Parliament before it
    enters into force. If approved by 31st December 2022, it is
    possible that it may be introduced for 2022 and 2023. Otherwise, it
    will take effect from 31st December 2023.

  • Although it is intended to be a temporary tax, there is a
    clause which allows for the tax to be evaluated at the end of the
    two year period and either maintained or abolished. There is
    therefore a possibility that the tax may become permanent.

  • The main principles of the tax will follow that of wealth tax,
    for example, in terms of who is liable, the exemptions that apply
    and how to determine the taxable value of an asset.

  • Each individual resident in Spain will be entitled to an
    allowance of ?700,000, plus ?300,000 against the value of the main
    home, as for wealth tax.

  • The value of an individual’s business will be exempt in the
    same conditions and with the same requirements as for wealth

  • The scale rates will be as follows:

Taxable Wealth (?)

Tax Band

Tax Rate

Tax on Band

Cumulative Tax

0 – 3,000,000





3,000,000 – 5,347,998





5,347,998 – 10,695,996





Over 10,695,996


  • The combined total of an individual’s income tax, wealth
    tax and Solidarity Tax liabilities cannot exceed 60% of the
    individual’s taxable income, subject to paying a minimum 20% of
    the Solidarity Tax.

  • Where an individual is liable for both wealth tax and
    Solidarity Tax, the wealth tax liability will be credited against
    the individual’s liability to Solidarity Tax for the year.

  • Overseas wealth taxes paid on the same assets are deductible
    against the Solidarity Tax.

  • Individuals who are not resident in an EEA country will be
    obliged to appoint a fiscal representative for the purposes of
    filing the relevant return.

Mitigating Wealth Tax and Solidarity Tax

There are various ways in which you can mitigate potential
liabilities to wealth tax and Solidarity Tax, which may involve a
simple restructuring of assets and income. We would recommend you
seek professional advice tailored to your specific

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Wealth Management from UK

Wealth Management – 2023 Outlook

Alvarez & Marsal

The past few years have shown that aiming to predict trends and outcomes is an impossible feat. However, as we look back on the wealth management industry over the course of 2022…

Supporting Private Clients In Asia


In an increasingly uncertain world, wealthy families and individuals need a trusted partner to guide them through the complex challenges that uniquely impact them and their affairs.


Source link

Related posts

Canada: Court Of Appeal Summaries (August 1 – 5, 2022) – Blaney McMurtry LLP

Chambers Global Practice Guide To Corporate M&A 2022: Cayman Islands – Directors and Officers

Back To The Drawing Board? HRSA Proposes Modifying The 340B Program Administrative Dispute Resolution Process – Healthcare