Antonio Ballester, managing partner of Tomarial, He gives his opinion in Valencia Plaza about the wealth tax in the Valencian Community.
The Wealth Tax (IP) is a direct and personal tax levied on the net worth of natural persons at December 31 of each year (annual accrual). It was established by Law 18/1991 of June 6 and was required until Law 4/2008 of December 23 which, without repealing it, eliminated the effective obligation to contribute for it. Subsequently, Royal Decree-Law 13/2011 reinstated it on a temporary basis for the years 2011 and 2012. Subsequently, successive regulations have been extending it to the current date. On June 30, 2020, the deadline for filing the 2019 Wealth Tax ended.
The total collection of the tax for the whole of the Autonomous Communities in 2017 amounted to 1.267,5 million euros. Of these, 148 were collected in the Valencian Community.
The performance of the tax is assigned to the Autonomous Communities, which assume regulatory powers on the minimum exempt from the Tax, the rate and the deductions and discounts of the fee.
The deductions and allowances approved by the Autonomous Communities are compatible with those established in the state regulations governing the tax, applying after them.
For the last IP presented, that of 2019, the natural persons that resulted in a tax quota to enter or that the value of their assets or rights was greater than two million euros were required to declare it.
In particular, residents of the Valencian Community can apply a minimum exemption of 600.000 euros or 1.000.000 euros if there is a mental disability equal to or greater than 33 percent or physical or sensory disability equal to or greater than 65 percent. At the state level, the taxpayer's habitual residence is exempt up to a maximum amount of 300.000 euros.
In the Valencian Community the rates of taxation of the tariff range between a minimum of 0,25 percent and a maximum of 3,12 percent for tax bases exceeding 10,7 million euros.
The Wealth Tax is one of the taxes most subject to permanent debate. Even at a family level or among friends, it is not strange that the issue comes up: that if it could be classified as unconstitutional, that if it discriminates or rather benefits taxpayers resident in Communities with bonuses in the quota, 100 percent (read Madrid ), or 75 percent (read Rioja) etc.
The truth is that since its reestablishment in 2011, the tax coexists with us and, in my opinion, it came to stay.
This obliges us advisers to inform and advise taxpayers on decisions that, always within the legal framework, allow, for example, to minimize the amount of this tax, allowing the application of the limit of the full payment in those cases in which the sum of the full IP share and the personal income tax share exceeds 60% of the income tax base, or meet the requirements for business or professional assets or shares in family businesses to be declared exempt.
Tax Control Plan for Wealth Tax
But what is relevant and novel about this tax, ceded by the State but on which the Generalitat Valenciana in addition to those mentioned above also shares inspection powers is that the Valencian Tax Agency, making use of its powers and the data and information that it has and in accordance with the provisions of the Tax Control Plan of the Generalitat Valenciana 2020 approved by Resolution of January 20, 2020 where it is expressly declared that one of its bases of action is “The recovery and consolidation of the capacity contributory of the Wealth Tax, a tax whose effective application contributes to ensuring a fairer and more equitable tax system ", and under the terms set forth in articles 136 et seq. of the General Tax Law (Limited verification procedure) it is implementing a verification plan focused on the following risk areas:
- Taxpayers who, being obliged to declare the IP, have not fulfilled their obligation.
- Taxpayers fictitiously displaced to other communities with less taxation.
- Undeclared or incorrectly declared assets or rights.
- Application of the exemptions provided for in the IP Law.
In view of this, planning and correct compliance with the regulations of this tax acquires a rank and significance that we should not underestimate. Consequently, compliance with the obligation to declare the IP, no matter how minimum the fee to be entered, is an unquestionable duty for those taxpayers who are subject to said obligation.
