In 2023, tax collection in Spain reached a historic record, surpassing the figures of 2019 by approximately 50 billion euros. Despite this achievement, the Institute of Economic Studies (IEE) presented its Fiscal Competitiveness 2023 report, criticizing the high tax burdens placed on companies in the country. The report highlighted that tax pressure in Spain in 2022 was at 38.3%, which is still concerning for the country’s economic development.
The study emphasized the corporate tax in Spain, which accounted for 2.7% of GDP and Social Security contributions at 9.5%, higher than the EU average of 3.3% and 7.1% respectively. However, social contributions to Social Security in Spain were significantly higher at 25.2% compared to the EU average of 17.7%, whereas 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 the highest tax burden. 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, Spain still lagged behind its ranking from two years ago, indicating a significant loss of fiscal competitiveness due to continuous tax increases imposed by the government.
The report criticized both corporate and property taxes in Spain as being among the most burdensome in Europe and unfavorable for businesses and individuals alike. Additionally, personal income tax in Spain was noted to be about six percent higher than the EU average and two percent above
