The possible constitution of a second left-wing Executive if Alberto Núñez Feijóo fails to be invested, once again leaves the government’s relations with the Spanish business community up in the air after a very tense legislature. The consequences of inflation, the rally in interest rates, the growth of profits or the energy crisis have been the arguments put forward by the Government to charge employers on some occasions or to increase their tax burden. A trend that will continue if a coalition agreement between PSOE and Podemos now Sumar is reissued.
Although Yolanda Díaz’s tone is much less aggressive towards the company than some members of Podemos and she always raises the banner of social dialogue, what is possible is that she advocates implementing the measures of her program, in search of what they call “fair taxation”, a concept or that is part of the discourse of both progressive formations; so it does not seem that it will be difficult to convince Pedro Sánchez of this.
Minimum tax of 15% for multinationals
PSOE and Sumar agree on the need to raise taxes on multinationals and large companies as a way of defending the “social shield”. Along these lines, the Government has already begun processing the global minimum tax of 15% in the midst of Ferrovial’s exit to the Netherlands, after Rafael del Pino’s construction company announced the change of its headquarters. Agreed upon by the G-20 economies and adopted by the European Union, it will affect those companies with a turnover of more than 750 million euros and could enter into force on December 31, 2023, with a view to being applied in the 2024 financial year.
But those of Yolanda Díaz want to go beyond this minimum rate and propose an in-depth reform of corporate tax based on the fact that no large company is taxed below this 15%, regardless of all those deductions, exemptions, reductions and benefits to which they are entitled. Her plan includes reducing all of these deductions “that add to the complexity of the tax”; limit exemptions for dividends and capital gains from subsidiaries or modify the anti-relocation rule to better define the concept of ‘tax haven’, differentiating between countries that cooperate in tax matters and those that do not.
Maintain banking and energy taxes
The PSOE’s electoral program also includes studying the extension of the temporary taxes on banking and energy, which could be extended beyond 2024. Sumar has admitted its intention to maintain both while a new Corporate Tax reform is being processed. In any case, the one that affects energy will be subject to the “temporary solidarity contribution” approved by the EU member states on the extraordinary benefits of oil, gas, coal and refining, which could end up becoming permanent. The acting Minister of Finance, María Jesús Montero, already admitted on her day that the Spanish tax would be “retouched” to adapt it to the European one.
Socialistas and Sumar also agree on the need to “avoid tax avoidance and evasion carried out by large economic groups,” and advocate promoting a state pact against tax fraud in search of “a fair distribution of revenue among the countries in which transnational groups operate.” Díaz’s platform also claims to eliminate the specific taxes for SICAVs (at 1%) and SOCIMIS (at 0%) and introduce the concept of “green taxation” on highly polluting sectors.
The business community wants a “pro-business” government
Few are surprised by the predilection of a certain part of the Spanish business community for the electoral program of the PP, whose candidate, Alberto Núñez Feijóo, defended the revision of the extraordinary tax on banks, although he admitted that he could not do the same with energy. But the opinion of the polls, which complicates an easy inauguration of Feijóo, could extend the period of complexity in institutional relations after the pre-campaign has been full of speeches in favor of a “pro-business” government. Perhaps for this reason, the statements from the largest employers’ associations in the country, CEOE, CEPYME and ATA, which bring together the country’s large, medium, small and autonomous businesses, have not been long in coming and have spoken a few hours after the results of the elections were known.
The statement of the first two appeals to guarantee “the highest possible level of stability”, “the necessary moderation” and that “the sense of State and respect for the constitutional framework prevail”, a veiled criticism of the probable partners of a new left-wing government: ERC, PNV or Bildu. They have not missed the opportunity to ask “for the attacks that have been coinciding from the institutional sphere to cease definitively” and “that Spanish companies be valued as generators of social and economic progress”, seeking to leave behind criticism such as those expressed by Podemos officials such as Ione Belarra or Pablo Echenique.
Stop being “the state financier”
The tone, although harsh, diverges substantially from that shown by the businessmen during the campaign. The president of the Spanish Chamber of Commerce, José Luis Bonet, recently called for a reduction in the tax burden on companies, a reduction in social contributions and a reduction in corporate tax, a position completely different from that of the hypothetical left-wing constitution.
The cameral institution claimed the urgency of reducing the fiscal pressure that companies endured and set a single type of the mentioned tax. “One of the priorities, whatever the government elected at the polls, must be carried out a pro-business policy, which promotes a favorable context for growth, transformation and job creation,” he said on July 13.
Another critical voice regarding the current tax model was that of the president of the self-employed employers’ association ATA, Lorenzo Amor, who came to ensure that “the self-employed act as financiers of the State.” In a campaign meeting with the economic spokesman for the PP, Juan Bravo, he demanded a drop in withholdings and payments on account from 15% real to 10%, in addition to reducing the tax payment periods from four (one per quarter) to two.
“It is illogical that, in the 21st century, with the advances in artificial intelligence and innovation, companies and the self-employed have to go four times a year to have to justify withholdings, payments or payments on account with the treasury,” he said then. Once the comedians were celebrated, this entity has been more cautious than the CEOE and has asked “that all the necessary formulas be sought to form a stable government that generates confidence.”
