The Government validates the new capital gains tax but its partners demand a compensation fund for municipalities


The Government has carried out this Thursday two regulations dependent on the Ministry of Finance and Public Function. In the first place, the Royal Decree Law that reformed the capital gains tax, which had been overthrown by the Constitutional Court, has been validated, not without criticism. And secondly, the reform of the public employment law goes ahead to reduce the high temporality that exists among administration employees. The members of the Executive have endorsed both norms that have been rejected by the right.


The conversion of interim into fixed generates many doubts that can cause "a long judicial process"

The conversion of interns into permanent ones raises numerous doubts that can provoke “a long judicial process”

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The Government has approved the new municipal capital gains tax, the predecessor of which was overturned by the Constitutional Court. The rule has had 198 votes in favor, 137 against and five abstentions. Despite its validation, the rule will finally be processed as a bill.

The new tax has been in operation for several weeks but required its final validation in Congress. The municipalities have six months to transpose the norm in their regulation, but the maximum percentages included in the reform of the law are already applicable. The Government has had to modify the calculation method and allow two alternatives for the taxpayer to choose the one that best summons them to avoid the veto that the Constitutional Court had imposed. The regulation, from 2004, has had three sentences against the high court, until the final one in October, which left it without effect.

The Government has obtained the support of its partners, despite the criticisms that have been made against the modification, which has been branded as a “patch” and they have requested the creation of a fund that compensates the municipalities for the loss of taxation. The Minister of Finance, María Jesús Montero, has already claimed since her initial presentation to defend the Royal Decree that this fund was not going to be applied, which has also been widely claimed by the right. “In the first place I want to remember that when the first sentence was known, the PP ruled – the first is from 2017 and later there were two others in 2019 and the most recent in 2021 – and it did not demand a fund,” Montero said from the rostrum. “Mayors who considered this tax confiscatory, now ask for compensation,” he lamented.

This is what ERC has claimed. “This Royal Decree was necessary, but it still seems like a patch,” said Republican deputy Joan Margall. “The structural problems are not fixed and some municipalities are going to see their income diminished,” he added, claiming the need to compensate the councils. In the first place, due to the loss of the 15 days that passed from the Constitutional ruling to the approval of the Royal Decree, and, secondly, due to the losses with respect to past income.

Also in Pdecat and JxCat they have opted for compensation for town councils. “There is no solution, there is a lack of a compensation fund, one temporary and the other permanent,” said deputy Josep Pallés y Masó.

The right-wing caucus has shown its criticism of the tax, while demanding compensation for the decline in revenue. “We are against this Royal Decree by the form but also by the bottom, because it taxes the gain of patrimony that already is taxed in the personal income tax”, has assured the popular deputy Carolina Spain. The capital gains tax was approved by the Government of José María Aznar, weeks before leaving La Moncloa in 2004. At the same time, he has accused Montero of “raising taxes” with this capital gains reform, and has demanded a compensation fund for the loss that it estimates that will occur in the collection. “Be brave and create a compensation fund for municipalities,” he said.

Carmen Martínez, from Ciudadanos, has opted in a similar line, who has requested the abolition of this tax and its replacement by a greater participation in the taxes levied on real estate, such as personal income tax. In addition, he regretted that “there is no additional fund for municipalities.” However, unlike the PP, those of Inés Arrimadas have abstained from voting.

The capital gain was not the only issue that affected the cabinet of María Jesús Montero. In its branch of Public Function, the plenary session of Congress had to approve the opinion of the Commission of the branch that agreed on a reform to reduce fraud of law in the high temporality in the public sector. The rule has had 170 votes in favor, 156 abstentions and five votes against.

This Royal Decree reached Congress in July, but for its validation the processing was accepted as a bill. Now, the reform is going ahead whose main point is that interns with more than five years in the administration will be able to assume a fixed position through a merit contest, without having to re-present themselves to the opposition. It was agreed with the PNV and ERC, which already facilitated its final approval.

The measure was agreed within the commission, which allows for a change to be carried out for the interim after the European ruling that condemned Spain for fraud of the law due to its excessive temporality. The administrations will have to summon through the competition system these places that will be covered temporarily from before January 1, 2016. The document indicates that this procedure is “exceptional” and that they will be carried out “only once”. They will be the object of negotiation in the territorial spheres, not only at the state level, but also at the local and regional level.

The articles include an additional provision that incorporates another of the points of the agreement signed by the Government and the unions, which is that of financial compensation. Interns who are in temporary abuse “will give rise to an economic compensation that will be equivalent to twenty days of their fixed remuneration per year of service”, defends the text agreed by the political formations. If the withdrawal is disciplinary or voluntary, the interim will lose the right to this compensation.

Failure to comply with the maximum term of permanence will give rise to an economic compensation for the affected temporary civil servant personnel, which will be equivalent to twenty days of their fixed remuneration per year of service, prorating the periods of time less than one year by months, up to a maximum of twelve monthly payments. The right to this compensation will arise from the date of effective termination and the amount will refer exclusively to the appointment of the person causing the breach. There will be no right to compensation in the event that the termination of the service relationship is due to disciplinary causes or voluntary resignation. The amount is in line with the amount recognized by the Supreme to the temporary public employees (labor) in fraud to whom it recognizes the status of indefinite non-permanent.

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