May 11, 2021

These are the differences in inheritance and gift tax, heritage and personal income tax in each community


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The fiscal harmonization that the Ministry of Finance intends to carry out Maria Jesus Montero it may be closer to occurring. Yesterday, the minister announced the 17 experts who will deliver their conclusions on the tax reform on February 28, 2022. By then, the Government of Spain intends raise corporate, estate and gift taxes to the Community of Madrid for considering it tax dumping.

This intention to raise taxes is a negotiation between the Government and ERC. Given this, the president of the Community of Madrid, Isabel Diaz-Ayuso, made his intentions clear: “If they want a fiscal harmonization, that the Catalan presidents lower taxes”

But, is Madrid a fiscal ‘dumping’? How are the other Spanish autonomous communities in relation to the matter of taxes?

Personal income tax: Madrid is the community that pays the least

If you attend to lower fees, it is in the Basque Country where you pay the most. For example, a salary of 12,000 euros is taxed 120, compared to zero euros in the rest of the autonomous communities. In the next tranche of 16,000 euros, it is Madrid where you pay the least, while the Basque Country continues to lead with the highest tax burden.

Another song is in the section from 20,000 to 110,000 euros. Here, the Basque Country has the least pressure. Instead, Catalonia happens to be the first in salaries of up to 30,000. In the highest incomes, the Autonomous Community of Navarra is the one that taxes the most, while Madrid leads downwards.

Inheritance tax: Asturias ‘punishes’ direct heirs

In inheritance tax, Asturias it is the community where you pay the most. For example, if a 30-year-old person receives an inheritance from a deceased father worth 800,000 euros, of which 200,000 are from the home, he will have to pay 103,000 euros. On Castile and Leon, which is the second, would have to pay 81,018 euros, for the slightly more than 63,000 of the Valencian Community, third.

On the other hand, the inheritance tax is zero in other communities such as Andalusia, Cantabria or Galicia. In the Community of Madrid, the spouse or direct relatives of the deceased may receive the 99% of the tax, or what is the same, is taxed at 1%.

Map of taxes in the autonomous communities

Donations: Castilla y León and Extremadura, in the lead

Castilla y León and Extremadura are the regions that pay the most for donations. For a father who wants to donate 800,000 euros to his son, in these communities they will have to pay 200,000 euros, compared to 2,000 in Madrid or zero in Cantabria. La Rioja and the Canary Islands raised this tax at the end of 2020.

Heritage: Madrid discounts 100% of this tax

For the wealth tax, Madrid gives a 100% discount, so you will not have to pay anything. On the other hand, Aragon and Extremadura are the ones that charge the most, followed by Catalonia.

On the other hand, if one looks at the numbers of own taxes that each autonomous community has, Catalonia is the one that has the most by far. A total of 15, compared to the three in the Community of Madrid, which is one of those that has the least together with Castilla-La Mancha and Castilla y León they have two.

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