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IEE criticizes the excessive tax burden on companies in Spain

In 2023, tax collection in Spain reached a historic record, surpassing the figures of 2019 by approximately 50 billion euros. Despite this achievement, the Institute of Economic Studies (IEE) presented its Fiscal Competitiveness 2023 report, highlighting the high tax burdens placed on companies in the country. The report noted that tax pressure in Spain in 2022 was at 38.3%, only 3.8 percentage points lower than the European Union average.

The study emphasized the corporate tax in Spain, which accounted for 2.7% of GDP and Social Security contributions at 9.5%, higher than the EU average of 3.3% and 7.1% respectively. The analysis pointed out that social contributions to Social Security in Spain were significantly higher at 25.2% compared to the EU average of 17.7%, whereas corporate tax was slightly lower at 7.2%.

The IEE indicated that Spain’s fiscal effort was nearly 18% higher than the EU average, making it one of the OECD countries with the highest tax burden, ranking fifth behind France, South Korea, Japan, and Australia respectively. The Tax Competitiveness Index revealed that Spain ranked poorly in terms of tax competitiveness among OECD economies, experiencing a decline over the last legislature due to continuous tax increases imposed by the government. Despite improvements from the previous year, Spain still lagged behind its 2019 ranking by almost five percent points, indicating a significant loss of fiscal competitiveness due to persistent policy decisions aimed at increasing taxes.

The report criticized both property and personal income taxation in Spain as unfavorable compared to other OECD economies: Property taxation was deemed second-worst after Italy while personal income tax was noted to be six percent higher than

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