Personal Taxes

The Constitutional Court docket lifts the earnings tax reduce for low-income individuals in Catalonia – CVBJ

Updated on Sunday, November 7th, 2021 – 6:20 pm

Evaluates the appeal issued by the central government for exceeding its powers

The President of the Generalitat, Pere Aragons Courts The Constitutional Court repeals the municipal capital gains tax

The Constitutional Court has lowered the Income Tax Reduction (IRPF) that Catalonia was being applied to low incomes, assessing the means the central government had put forward when it feared that the Generalitat had exceeded its autonomous powers.

With the Budget Support Act, the government has taken two measures: on the one hand, that the taxpayer’s minimum is generally EUR 5,550 per year; and on the other hand, an increase of 10% of the allowance for low wage earners. If the sum of the general assessment bases and the taxpayer’s savings is 12,450 euros or less, the minimum amount for the taxpayer is 6,105 euros per year, he emphasized. And that’s the part that the government appealed against considering it created a new category of income tax and why the Constitutional Court overthrew it, as ElNacional.cat put forward yesterday.

Treasury Secretary Mara Jess Montero already pointed out when approving the tax cut that the municipalities Cannot create new categorieswhat will happen to the sum of the general base and savings. This argument was accepted by the TC, which in the sentence put forward by the above media suggests that the government has exceeded the limits set by the state for the autonomous exercise of this delegated competence.

However, the constitution makes it clear that its decision will not affect the income generated; Taxpayers who have already benefited from their measure do not have to reimburse the amounts saved. The TC is making this decision to ensure legal certainty, and according to government calculations, the reduction could benefit more than 200,000 taxpayers.

The decision of the Court of Justice is relevant to the decision itself, but also because Catalonia is one of the regions with the most aggressive taxation among its taxpayers. According to the latest edition of the Fiscal Liberation Day study produced annually by the Civismo Foundation, the Catalans are the ones who have to work the most days to pay all the taxes they have to pay: 201 days. And according to estimates by the General Council of Economists, the Catalan region already has 19 taxes of its own, four of them unconstitutional and some as resourceful as the tax on the environmental risk of the manufacture, handling and transport, custody and emission of radiox elements

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