Spain’s fiscal effort outstrips EU average by 17.8%: IEE

Spain: Taxed to the Bone: IEE’s Report Reveals High Fiscal Pressure and Declining Tax Competitiveness

On Wednesday, the Institute of Economic Studies (IEE) published its Tax Competitiveness 2023 report, revealing that Spain’s fiscal effort is 17.8% higher than the EU average. With a forecasted fiscal pressure of around 39%, this puts Spain among the top-taxed countries in Europe.

The tightening of business taxation in Spain is expected to slow down economic growth, according to the president and general director of the IEE. The report highlights that Spain’s overall tax pressure on companies and entrepreneurs remains higher than the EU average. Despite this, Spain’s Corporate Tax and social security contributions from businesses represent a larger percentage of GDP compared to the EU average.

According to the Tax Competitiveness Index, Spain’s tax competitiveness has declined significantly in recent years, ranking among the worst within the OECD. The IEE points out that Spain’s regulatory fiscal pressure is significantly higher than the EU and OECD averages, particularly in the case of corporate tax and property tax. Personal Income Tax in Spain is also above the EU and OECD averages and is more progressive in nature. Overall, the tax rate combined with Social Security contributions in Spain is relatively high compared to other countries.

To support economic growth and investment, it is essential for Spain to address its tax competitiveness and reduce regulatory fiscal pressure by comparing with other European and OECD countries. By doing so, it can better understand how its policies impact businesses and individuals.

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