Suppression of Wealth Tax in Andalusia

The Government of Andalusia has decided to abolish the Wealth Tax in its Autonomous Community.

In this way, Andalusia will be, after Madrid, the second Spanish region to fully release this tax.

By means of Decree-Law 7/2022 of 20 September of the councilor of Andalusia, the Autonomous Community Law 5/2021 has been modified by introducing article 25 according to which it is established that, after the deductions and allowances regulated by the state regulations, an autonomous community allowance of 100% of the resulting tax liability will be applied to the tax liability if it is positive.

Taking into account that the accrual of the tax occurs on 31 December, from 2022 this tax will not be paid in Andalusia.

However, the bonification does not exempt from the obligation to file the tax return, so taxpayers whose assets or rights are worth more than 2,000,000 euros will still be obliged to declare the tax.

Due to the practical suppression of wealth tax in Madrid and Andalusia, the central government has announced that it is preparing the creation of a new special tax for large fortunes, which would be applied on a temporary basis as of January 2023.

It has not been specified who will be affected by this tax, but experts suspect that it will refer to large fortunes of one million euros or more.

In any case, Lozano Schindhelm will keep you informed about any new developments and will advise those taxpayers who are obliged to declare and/or pay the tax on the fulfilment of their obligations.

Autor: Fernando Lozano
Autor: Claudia Cascant