IEE criticizes the excessive tax burden on companies in Spain

High Tax Burden: Spain’s Struggle to Balance Economic Growth and Fiscal Responsibility

In 2023, Spain reached a new record in tax collection, surpassing the figures of 2019 by around 50 billion euros. Despite this achievement, the Institute of Economic Studies (IEE) presented its Fiscal Competitiveness 2023 report and criticized the high tax burdens placed on companies in the country. The report noted that tax pressure in Spain in 2022 was at 38.3%, which is still concerning for the country’s economic development.

The study highlighted that corporate tax in Spain accounted for 2.7% of GDP and Social Security contributions at 9.5%, both higher than the EU average of 3.3% and 7.1% respectively. The IEE pointed out that the combination of these taxes exceeded the European average by 1.8 points, making it one of the countries with the highest tax burden in Europe.

The analysis also noted that social contributions to Social Security in Spain were significantly higher at 25.2% compared to the EU average of 17.7%. However, 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 a high tax burden due to continuous tax increases imposed by the government.

The Tax Competitiveness Index revealed that Spain ranked poorly in terms of tax competitiveness among OECD economies, experiencing a decline over the last legislature despite improvements from the previous year. Despite this improvement, Spain still lagged behind its ranking in 2019, indicating a significant loss of fiscal competitiveness due to continuous tax increases.

The report criticized various aspects of Spanish taxes, including property and personal income taxes being unfavorable compared to other countries’ standards.

In conclusion, while Spain has achieved some improvements from previous years, it still faces challenges related to high corporate and personal income taxes that contribute significantly to its overall tax burden faced by individuals and businesses in

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