Spain’s Additional Wealth Tax Passed in Spain

Spain’s Additional Temporary Wealth Tax Passed through Spain’s Parliament on December 29, 2022.

The Wealth Tax applies to worldwide assets of Spanish residents and non-residents.

The tax is a temporary two-year measure to be assessed annually on December 31, 2022 on individuals holding assets above EUR3 million.

Spanish residents will have an exemption amount of EUR700,000, plus a EUR300,000 homestead amount.

The tax rate brackets are the following:

o   1.7% on assets from EUR3 million to EUR5.35 million

o   2.1% on the next EUR5.3 million; and,

o   3.5% on assets above EUR10.7 million.

There are limitations on the imposition of the tax:

o   A taxpayer’s wealth tax will be credited against his/her solidarity tax;

o    The taxpayer solidarity tax, wealth tax, and income tax cannot exceed 60% of a taxpayer’s taxable income;

o   However, a taxpayer is subject to paying a minimum of 20% of the solidarity tax.

A foreign tax credit is available for taxpayers leaving overseas if levied on the exact nature of wealth taxes abroad.