Hefty tax cuts announced for next year

Income tax is being cut by an average of 12,5% for next year – and people who earn under €24,000 a year will see a cut of 23.5% less by 2016!

But IVA could be going up next year after the elections.

The cut will come in two stage, an initial one next year (elections! hooray!) of 8,05% for everyone, and 19% for those earning under €24.000, and then a further cut in 2016.

Large families, or those on low incomes who have to look after handicapped or disabled people, will see a tax bonus of €1,200 next year.

The tax cut is expected to be equivalent to 0.55% of GNP for 2015.

The maximum income tax level will fall to 47% next year and 45% in 2016.

Corporation tax will also drop to 28% next year and 25% in 2016. It’s currently at 30%. Additional tax breaks for R&D and for cash set aside for reinvestment have been announced.

Small family companies will see an additional cut to just 20%, and new companies will be charged just 15% for the first two years.

A major cut on capital gains from savings has also been announced, and the tax authority will start to publish an annual list of tax evaders in a name and shame campaign.

Meanwhile: both Brussels and the Bank of Spain continue to demand that IVA be put up again.

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