Spain: Budget for 2010
The Bill for the Spanish Budget for 2010 was approved by the government on 26 September 2009. The most important features of the Budget, which will generally apply from 1 January 2010 if it is approved by Parliament, are as follows:
Individual income tax
- Progressive taxation of savings income is introduced. The first EUR 6,000 will be taxed at 19% and the rest at 21%. Currently, savings income is taxed at a flat rate of 18%.
- The EUR 400 tax credit for taxpayers receiving employment and business income is abolished.
Corporate income tax
The tax rate for small enterprises is temporarily decreased by 5 percentage points for companies with less than EUR 5 million of turnover and less than 25 employees that maintain or increase these employments. Individual taxpayers earning business income who maintain or increase the employment in their business may also benefit from this decrease.
VAT
From 1 July 2010, the general tax rate is increased from 16% to 18%. The reduced tax rate increases from 7% to 8%. The lowest tax rate is maintained at 4%.
For more information regarding taxation in Spain please contact our Spanish taxation experts.