- The tax reaches individuals with net wealth above three million euros.
- The first return, for tax year 2022, is filed online during July.
- It is complementary to wealth tax: the amount paid under that tax is deducted.
The Official State Gazette published on 12 June 2023 Order HFP/587/2023 of 9 June, approving form 718 for the Temporary Solidarity Tax on Large Fortunes and setting the place, manner, deadlines and procedure for filing. The order came into force on 13 June and applies for the first time to the return for tax year 2022, which must be filed electronically from 1 to 31 July, with direct debit of payment until 26 July.
The tax was created by Law 38/2022 of 27 December and applies to the net wealth of individuals above three million euros. It is temporary, in force for the first two years in which it accrues, and is designed as a complement to wealth tax. With the form now published, affected taxpayers know the procedure for the first payment.
How it is calculated
The tax accrues on 31 December and affects the net wealth the taxpayer owns on that date. Its design largely matches that of wealth tax in terms of territorial scope, exemptions, taxpayers, bases and accrual, and it cannot be assigned to the regions. The tax base is reduced by a tax-free allowance of 700,000 euros where there is personal liability.
The scale does not start to bite until the taxable base exceeds three million: the rate is 0% up to that figure, 1.7% up to about 5.3 million, 2.1% up to about 10.7 million and 3.5% above that. There is a joint cap, so that the amounts of this tax, income tax and wealth tax may not exceed 60% of the income-tax base, and the amount actually paid under wealth tax is deducted.
Who files and how
The return is mandatory when the result is an amount payable, and must be filed online. That means someone with substantial wealth who ends up with no payable amount, for example because the wealth tax already paid absorbs it, does not need to file. To find out, the tax must be calculated on wealth valued at 31 December 2022 and compared with what has already been paid.
The calculation requires gathering in an orderly way the information on assets and rights, charges and debts, the exemptions that apply, such as the main home within its limits, and the deductions for taxes paid abroad. Those resident in another country, or who have moved, should also check whether they must appoint a representative in Spain, an obligation in the law for non-residents of the European Union.
What to review
A first step is to determine whether wealth exceeds the threshold that triggers the tax and to estimate the amount, to know whether the form must be filed and with how much cash margin. For anyone who must pay, direct debit has a shorter deadline, until 26 July, and filing is done entirely online with a digital certificate or identification system.
It is also worth documenting valuations well, reviewing the effects on joint filing with other family members and remembering that debts under this tax are treated like others for which marital community assets are liable. This note is general information; your tax adviser can calculate the tax with you and plan payment. It is also wise to set time aside for filing, because the period is a single calendar month.
With the form published, July stops being an unknown and becomes a calendar task.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
