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Country Rankings - Spain

  • Jul 26, 2018   Spain: melting

    The lack of clarity over Brexit policy on the UK side should come as no surprise really, given that the Government depends on the support of opposition parties in parliament to pass fundamental constitutional changes. But delicately poised coalition and minority governments are fast becoming commonplace with voters unsure these days whether to go left, right, or do the hokey pokey. However, none are in quite as precarious a parliamentary position as Spain's newly appointed Prime Minister, Pedro Sanchez, whose Socialist Party has just 84 seats in the 350-seat lower house. Those sorts of odds make Theresa May's position look, as the Brits sometimes say, "safe as houses." Although, given my former analogy, perhaps another British idiom would have been preferable. Nevertheless, with the numbers stacked against him, Sanchez has proposed a pretty ambitious economic agenda, including in the area of taxation, where he wants to make it so that companies pay an effective rate of no lower than 15 percent by removing the few deductions that are left to companies in Spain. With the finer details lacking, this is a policy that still needs to be fleshed out, leaving a certain amount of tax uncertainty dangling in the air as a result. However, before we can even entertain the idea that Sanchez will get his agenda through the legislature, surely his own party needs to be fleshed out too. For sure, he's got nowhere near enough bodies on his side of parliament to carry the day yet. The likelihood is that, at some point, the Spanish parliament will be dissolved, and new elections called to achieve some sort of functioning government. Sanchez has said as much, although, since taking the reins almost two months ago, he has rather gone off the idea. That's probably because, by all accounts, he will lose. The trouble is, against the backdrop of Spain's current political melting pot, it's anybody's guess what will come next.
    Source: https://www.tax-news.com/news/Spains_PM_Proposes_Minimum_Corporate_Tax_Burden____86872.html

  • May 16, 2017   Spain: bluster

    Who'd have thought that on June 24, 2016, the day after the British people took the momentous decision to leave the European Union, that the Brexit negotiations could hinge on the ownership of a piece of rock separating Western Europe from North Africa. If a recently leaked report by Spain's Foreign Ministry is anything to go by, this might happen. But is it all just bluster? First of all, I should clarify that the piece of rock in question is the territory of Gibraltar, and that the territory of Gibraltar is more than a mere geographical feature, albeit a quite impressive one; it's an important European business and finance center. And despite being closer to Marrakech than to Manchester, this rock is constitutionally and culturally British, and wants to remain so. Even joint sovereignty was rejected almost unanimously in a referendum in 2002. Given the aggressiveness with which Spain often pursues its territorial claim over Gibraltar, you'd think that the country was almost prepared to fight a war to get it back. But it could be argued that the controversy is manufactured somewhat by Spain &8211; a useful distraction when things go badly for the Government of the day on the domestic front. Spain is also often heard to bemoan Gibraltar's low-tax regime, regularly branding the territory a tax haven and a money-launderer's paradise. But it's also worth noting that the same financial center provides employment for thousands of Spaniards living in adjacent regions. Indeed, unemployment in neighboring Andalucia is over 30 percent. Would Spain therefore really be prepared to crash the economy of Gibraltar and a large area of southern Spain by effectively liquidating Gibraltar's financial center? It would certainly appear to be a counter-productive policy, to say the least. Nevertheless, Brexit does provide the perfect opportunity for Spain to drive a wedge between the UK, which is withdrawing from the EU, and Gibraltar, which is desperate to remain, given that a great deal of its financial business depends on access to the Single Market. And the report suggests that Spain should exploit this opportunity to the maximum, even calling for the use of its veto in the Brexit negotiations to force the sovereignty issue. Would Spain really be prepared to go this far just to gain joint sovereignty over Gibraltar &8211; an outcome that Gibraltarians themselves manifestly don't want? All things considered, perhaps Spain raising the possibility that it would go so far is just a red herring. But we should be prepared for the possibility that Brexit could get snagged on The Rock.
    Source: http://www.tax-news.com/news/Spain_To_Challenge_Gibraltars_Sovereignty_Tax_System____74194.html

  • Jul 26, 2016   Spain: naughty

    Indeed, other worrying developments have occurred in the more economically vulnerable parts of the EU lately. Having utterly failed to rein in the budget deficit, Spain could be the first country, along with its similarly errant neighbor Portugal, to be officially placed on the fiscal naughty step by the EU, and made to pay for mismanaging its budget. The threat of punishment has also forced interim Prime Minister Mariano Rajoy into an embarrassing u-turn on tax, after he promised, rather rashly, tax cuts during the recent election campaign. Having implemented some tough and unpopular economic reforms, Spain looked like it was turning itself around. So it would be tragic if EU-enforced austerity undid all the hard work, sending the Spanish economy back into the doldrums. And surely making the country pay a financial penalty would only exacerbate the problem. It seems to sum up the paradox that is the EU in the 21st century. Backing the monetary union to the hilt and in doing so potentially destroying it at the same time. In a few years, perhaps London will be found looking on from the sidelines with a wry smile.
    Source: http://www.tax-news.com/news/Spain_To_Raise_Corporate_Tax____71744.html

  • Mar 07, 2016   Spain: obstreperous

    You're probably not going to be too concerned with the interior décor of a building you're attempting to save from crumbling. But, to switch subjects, if you've ever asked your sulky teenage offspring, for about the 100th time that week naturally, to tidy his or her room, you might be familiar with the refrain "I didn't ask to be born!". Likewise, Gibraltar didn't ask to be a British possession perched on a rock in southern Spain, but it is, and has been for the last 300 years. However, Spain just refuses to accept it. Actually, it's very unfair of me to compare Gibraltar to a hormone-fueled adolescent with a persecution complex. Of the two parties, the "Rock" that appears to be the mature one, and Spain the obstreperous child. Because, for a supposedly "mature" nation itself, Spain hasn't exactly covered itself in glory with its recent treatment of its tiny neighbor. It has hectored Gibraltar in all sorts of ways short of sending in troops, making life for its inhabitants about as uncomfortable as it possibly could. And this is because it resents having a British "tax haven" on its door step, and would rather like Gibraltar back. I suppose the thinking behind this is that once it's back in Spanish hands, the harassment will stop – although these tactics have hardly endeared the population of Gibraltar to Spain's cause. Quite the reverse in fact. In a sovereignty referendum in 2002, 98.5 percent of the electorate voted for the status quo. I'm mentioning this subject this week because Spain has long accused Gibraltar of being a hive of money-laundering and tax evasion, and Gibraltar was once again forced to defend itself, quite robustly, recently in the face of what Deputy Chief Minister Joseph Garcia termed "ignorant and unsubstantiated" criticism of the territory from a Spanish MEP. A low-tax jurisdiction it might be. You might even call it a tax haven. But a haven for dirty money? As a member of the EU, it is obliged to have all the relevant EU financial regulations in place, and Brussels simply isn't going to tolerate the presence of a rogue jurisdiction in its backyard. But still the allegations and insinuations come. However, I'd like to know why Madrid hasn't replied to Gibraltar's request to sign a bilateral tax information exchange agreement though. It's almost as if it's useful for the Spanish Government to have Gibraltar in reserve so it can bash it when things aren't going right for it. And another pertinent question: if Britain must give Gibraltar back to Spain, then shouldn't Spain give Ceuta and Melilla back to Morocco? The silence in Madrid is deafening. Some might not like it, but Gibraltar deserves an encomium for quietly going about the business of building a successful, modern economy.
    Source: http://www.lowtax.net/news/Gibraltar-Rejects-Spanish-MEPs-Tax-Evasion-Accusation-70603.html

  • Nov 02, 2015   Spain: progress

    Another country worthy of mention in the new Doing Business rankings is Spain, which was singled out for especial praise by the World Bank for the dramatic improvement it has made in the "paying taxes" sub-index, having surged 19 places from last year's 79th place to 60th this year. Apparently, what has made the difference is the introduction of a new e-government portal, which has dramatically simplified interactions between the public and government agencies, especially in the area of taxation, with taxpayers now able to submit income tax and VAT returns online, as well as access tax information for past years. I suppose this represents another milestone on the path to Spain's economic redemption, which has necessitated some quite painful economic reforms. Yet, without wishing to sound too harsh, e-government is hardly a revolutionary concept, and the submission of tax returns online has been fairly standard practice all over the world for a number of years now. What I suppose this shows is how far behind the pack some countries fell in the pre-crisis years as they failed to reform rigid bureaucracies and turned a deaf ear to the pleas of taxpayers and investors. Indeed, the 2016 Doing Business Index shows that Spain has a lot of ground to make up on somewhere like the UK, languishing as it is back in 33rd place overall, which is only a marginal improvement on last year's 34th. And I again make the point that being competitive isn't always just about taxes. The overall regulatory and legal framework is just as important, and this is where there is much room for improvement. Still, it's progress, and worthy of an encomium.
    Source: http://www.tax-news.com/news/Spain_Among_Top_Improvers_In_World_Banks_Doing_Business_2016____69559.html

  • Jan 29, 2015   Spain: makes a difference

    Nobody is pretending that Spain is out of the woods yet after getting sucked into the eurozone crisis. But the way the economy is performing compared to the rest of the eurozone suggests that the Government must be doing something right in the area of economic policy. Last month, the Bank of Spain said that improving domestic demand was helping to sustain a recovery, and that the eurozone's fourth-largest economy would grow by 1.4 percent in 2014 and possibly by as much as 2 percent in 2015. Given anemic growth elsewhere in the eurozone, especially in France (predicted 0.5 percent growth this year) and Italy (probably even slower 2014 growth than France) – the second and third-largest economies in the single currency area – it almost looks like boom time in Spain. Why is this the case? Well, economies are complicated things, and there are countless variables coming into play here. But I think the fact that Spain's conservative Government has managed to pass structural economic reform, perhaps the most important part of which was loosening up the labor market, something neither France nor Italy has managed to do, is one of the main reasons for the three countries' contrasting fortunes. Spain has also reformed and cut taxes, a policy that is reaping dividends, according to Secretary of State for Finance, Miguel Ferre Navarrete. You might have noticed that taxes have got rather high in France lately. QED. Spain's fate is of course still tied to the fortunes of the eurozone, which is currently staring over the precipice of a deflationary sinkhole. What? You think my language a little hyperbolic? Well, the fact that the European Central Bank has been permitted to print money like there's no tomorrow is an indication of how seriously the deflationary threat is being taken in Brussels and Berlin. But Spain must nevertheless try to keep up the good work.
    Source: www.tax-news.com/news/Spanish_FM_Says_Tax_Reform_Showing_Positive_Results____67006.html

  • Dec 22, 2014   Spain: misguided

    I frequently find myself "googling" something (that is, searching for something on the "net"), even though I might not be using that particular search engine. Google's business model is one of the major reasons why the Internet remains largely free to use, and the vast majority of us probably want it to stay that way. The free Internet has its losers, as well as its winners, though. And the publishers of traditional newspapers see themselves as one of the biggest losers of the digital revolution, with few people prepared to pay to receive quality journalism any more . But that is just a fact of life these days, and the newspapers would do well to adapt to the new environment. Some have accepted this reality in the knowledge that Google's news aggregation service drives huge amounts of traffic to their websites, bringing in bountiful advertising revenues. Others have erected their own pay walls so that users must subscribe to their content, which is also fine if one is loyal to a particular publication, and by and large these models seem to be working, even while most of their rivals' content remains unlocked. There are some though who continue to hold out against the tide, arguing that Google must compensate publishers for placing headlines and news snippets from their publications on free-to-use Google News. Germany tried a so-called "Google tax" last year, and Google's reaction was simple but very effective at changing the Government's mind : it just pulled German publications from Google News, after which traffic to these sites plunged. More or less the same thing happened in Belgium. So when Spain approved its own Google tax, at the behest of the Spanish media association AEDE, the result was entirely predictable. I have seen figures that suggest traffic to Spanish media sites fell by 15 percent within hours of their removal from Google News. One suspects that Canon AEDE, the Spanish legislation in question, will have a similarly brief life.
    Source: www.tax-news.com/news/Google_News_Withdraws_From_Spain_Over_New_Tax____66698.html

  • Oct 09, 2014   Spain: bearing fruit

    Indeed, one country that has suffered particularly badly in post-crisis Europe is Spain. However, after swallowing some pretty bitter economic medicine, the Spanish economy appears at long last to be on the mend. About a quarter of the workforce are still without a job, but the unemployment rate is starting to fall in a meaningful way – in the second quarter of 2014 over 400,000 people left the ranks of the jobless, the highest since 2005 at the height of the country's property boom. Youth unemployment is still tragically high at over 50 percent, contributing to something of a brain drain of Spain's brightest and best, but there are signs that the rate is also beginning to fall, and Spain's economy is expected to grow by 1.5 percent this year, faster than France, Italy or Germany. There is a feeling that the Eurozone's fourth largest economy really is beginning to turn the corner, and much credit is due to Prime Minister Mariano Rajoy's Government for this, after unpopular but necessary economic reforms were implemented, such as in the labor market. Like most of the EU, public spending remains a problem, but at least the Government has created the platform for income taxes to be reduced, with both corporate and individual taxes to be cut in the 2015 Budget. There is a long way to go, but Spain appears to be on the right path.
    Source: www.tax-news.com/news/Spain_Presents_2015_Budget____65984.html

  • Sep 04, 2014   Spain: bullies Gibraltar

    A bit of a theme this week: how the powerful like to bully the small and the weak. And we start with Spain, which, according to one senior figure in the Spanish Government, is deprived of EUR1bn every year in tax revenue as a result of Gibraltar's low-tax regime. Gibraltar isn't exactly a country. In fact its constitutional status confuses many people. Gibraltar is an Overseas Territory of the United Kingdom, but although Britain is responsible for its defense, foreign affairs and internal security, the Rock is self-governing based on a constitution written in the 1960s. It also has a sort of half-in, half-out relationship with the EU which it entered along with the UK while remaining outside of the common external tariff and EU VAT regimes, something which also probably irritates Spain. Essentially though, Gibraltar is a little piece of Britain welded to the Spanish mainland and has been so since the early 18th century when the Treaty of Utrecht ceded the territory to Britain in perpetuity. Superficially, it is understandable why a relic from the colonial age like this should pique Spanish pride so much, and given that the world has changed considerably in the last 300 years, with Gibraltar's importance as a key military outpost in the British Empire much diminished, I suppose it is not unreasonable for Spain to now ask for it back. However, the way it has asserted its claim has been very unreasonable. Short of actually invading the place, the Spanish Government seems to have done everything in its power to make life uncomfortable for Gibraltarians, like restricting use of Spanish airspace, imposing unnecessarily bureaucratic checks at the border post, levying a border tax (at least, attempting to), and prompting long legal challenges over its tax regime and indeed its right to exist as a separate entity at all. But it is not just the presence of a foreign colony on Spanish soil that so angers Spain. It is the fact that this colony is a tax haven. If you are against tax havens, as most politicians claim to be, including Spanish ones, then you are never going to subscribe to the view that they can actually be a force for good in the world economy. But, just look at the billions of capital poured into London and the wider UK economy through Jersey, Guernsey and the Isle of Man. So instead of spending substantial sums of taxpayers' money trying to usurp Gibraltar and close its finance industry, perhaps Madrid should be looking at this from an entirely different angle. Maybe Gibraltar could be to Spain what Hong Kong is to China, albeit on a smaller scale. One wonders whether the periodic attacks on the Rock are just an attempt by the Spanish Government to deflect attention away from Spain's own problems. But I like to look at it this way: if I were a Brit, would I object so strongly if there was some rocky outcrop, on the Cornish coast say, that was forever Spanish? Actually I think it would be quite interesting. At least there'd be somewhere you could go to get some decent tapas. But then the Spanish don't really have an appetite for fish and chips.
    Source: www.tax-news.com/news/Spain_Claims_Loss_Of_EUR1bn_To_Gibraltar_Tax_Regime____65675.html

  • Jul 24, 2014   Spain: on the mend

    The IMF has been at it again, sticking its nose into national tax policy where most of the time it is probably not wanted. Like the OECD, the IMF seems to think that the answer to every economic and fiscal problem is to raise taxes. Recently the newswires have been replete with reports of the IMF advising a VAT hike here, recommending new taxes there and generally being a bit of a bore. For example, it has urged Bahrain to introduce a comprehensive income tax, warned Slovakia against cutting VAT and chastised the Czech Republic for having the audacity to consider introducing a new lower rate of VAT. Governments normally only publicly respond to Article IV reports when they agree with the IMF's conclusions, because in doing so they are lending some credibility to their economic policies. It was refreshing then to hear Spain effectively thumb its nose at the Fund and its advice to raise excise duties and environmental levies and reduce VAT breaks. As the IMF observes, Spain has made a remarkable recovery given the trouble it was in just a couple of years ago. Growth has resumed, unemployment is falling, exports are up and financial conditions have improved markedly, with the country's sovereign debt yields at record lows. Perhaps it has now earned the right to cut taxes on its long-suffering citizens and business, which it is planning to do. The IMF seems to have endorsed the proposed tax reform package, but weirdly the Fund also said that Spain could reduce unemployment faster by cutting social security contributions and raising indirect tax. It is hard to disagree with the former suggestion. Without picking my way through the IMF's detailed analysis, I'm struggling however, to understand how raising indirect tax will be "critical" to boosting employment. Perhaps this is one of those examples of where higher taxes are good.
    Source: www.tax-news.com/news/Spain_Confident_Tax_Measures_Will_Rekindle_Growth____65240.html

  • Mar 27, 2014   Spain: to cut taxes?

    It's a healthy sign, I suppose, that some of the EU's intensive care patients are starting to talk about reducing income tax rates. We can only applaud Ireland, Spain, Portugal and Italy for their moves in this direction. Among the four, only Italy has gone beyond words, with tangible cuts to personal taxes, although with elections looming here and there it's only a matter of time before other countries follow along. Unfortunately, while the readiness to lower rates at least shows some understanding on the part of politicians that taxes are too high, for the most part they are shooting at the wrong target. The major problem that all these countries have is lack of growth, and improving the lot of wage-earners is the least effective way of countering recession. If you put more money into the pockets of less well-off people, their immediate reaction, once they have put food on the table, is to save more, which may be very praiseworthy, but does nothing directly to stimulate the economy. What is needed is more jobs, and this can only be achieved by reducing the burden of taxation and bureaucracy on business. Governments do seem to know this, judging by their rhetoric, yet the measures they take are puny in relation to the size of the problem. Partly that is due to the cost of achieving a meaningful reduction in business taxation, but surely most of it is due to reluctance on the part of "the establishment," the "powers" or whatever you want to call them to understand and accept the need to cut loose and allow 1,000 flowers to bloom, even if most of them are fiscally noxious. This involves cutting back oversight and control, anathema to most governments, along with cutting back taxes. It's like sowing seeds: it may be only a tiny grain of genetic potential, but allow it to grow and wonders emerge. Tax cuts are necessary, of course, but chopping away at the forest of regulators and the thickets of red tape is equally or more important, plus it saves money. Every regulator who is fired gives a double boost to the economy: less impediment to small business and less cost to the State. And it's on this level that the well-meaning leaders of cash-strapped euro-countries are failing: they talk endlessly about cuts to public expenses, yet nothing happens. The uncivil servants have seen them coming, of course, and are well-defended. It is a race against time, now, as to whether these states which are being eaten away from the inside by their cancerous public workforces can reform themselves before they collapse, and the signs are not good.
    Source: www.tax-news.com/news/Spanish_Experts_Call_For_Huge_Direct_Tax_Cut____64065.html

  • Mar 06, 2014   Spain: making supply-side sense

    Despite his rhetoric, Mariano Rajoy certainly didn't have much opportunity to display any right-wing anti-tax credentials during his first turbulent months in office, when it was a question of preventing the ship from sinking. Now perhaps things are a bit different, and Rajoy's announcement of job-enhancing social security cuts may have a real impact on the economy, especially since restrictive employment protection laws have been loosened to some extent. Cutting into the appallingly high youth unemployment rate must surely be the Government's highest priority.
    Source: www.tax-news.com/news/Spain_Slashes_Labor_Taxes_To_Create_Jobs____63876.html

  • Jan 30, 2014   Spain: jam tomorrow

    Spain's Rajoy has promised income tax cuts in 2015, so half a cheer for him for at least talking the talk. But will he walk the walk? Perhaps more credibly, the Finance Minister would only say that he is not planning a VAT rise "for now." If they weren't politicians, they wouldn't even begin to consider lowering taxes at this moment in history: the deficit for 2013 was probably just over 6 percent, while debt was 84 percent of GDP in 2013 and is expected to rise to 94 percent in 2014. While these figures aren't as catastrophic as those for Greece (and Italy's debt stands at 135 percent of GDP and rising), they are quite frightening. What they ought to do, of course, is to cut public spending, even though that would increase already massive unemployment (26 percent). But you must be getting bored of hearing me say that governments should cut spending, not because I'm wrong, but because it's flogging a dead horse. Of course what I really want to say is that they should leave the euro, but that is even less realistic: even Don Quixote stopped short at tilting at windmills. Not that it's in the hands of the Spanish Government in the first place - it's the Troika, stupid. And the only medicine the IMF knows about is an ointment called "taxincreases." That's why the Finance Minister is dutifully considering a VAT increase: rub on all over areas of exposed skin, it says on the tube, and wait. If the patient hasn't expired after three months, repeat the treatment until death occurs.
    Source: www.tax-news.com/news/MEPs_Attack_UK_Shale_Tax_Plans____63432.html

  • Jan 02, 2014   Spain: to fleece the rich

    Spain is likewise offering jam tomorrow, although its warblings about tax cuts for lower income groups are balanced by redistributive threats directed at higher earners, aiming overall at a higher tax take.
    Source: www.tax-news.com/news/Montoro_Confirms_Future_Spanish_Tax_Cuts_For_Lower_Incomes____63158.html

  • Nov 14, 2013   Spain: being transparent

    October 24: During an annual meeting in Lisbon, Spain's Financial State Secretary Miguel Ferre and Portugal's State Secretary for Tax Affairs Paulo Núncio signed agreements aimed at developing and strengthening mutual assistance in tax matters, and at permitting a direct exchange of tax information between the two countries.
    Source: lowtax.net/news/Portugal_Spain_Strengthen_Mutual_Tax_Assistance____62457.html

  • Sep 12, 2013   Spain: supports trade

    It's a small thing, heaven knows, when set against the backdrop of a general picture of rapidly increasing taxes, but we should congratulate Spain's Minister for Public Works Ana Pastor who announced plans to reduce, by 5 percent, the fees charged for the use of port infrastructure by vessels, passengers and freight, and an 8.5 percent reduction in port property occupation tax. Together the cuts will be worth just EUR50m, but what is important is that they support trade and they show that at least one part of the Spanish Government has the right priorities. Spanish exports grew 10 percent in the first half of 2013, a healthy sign. Otherwise, Spain didn't have such a good week, with the 300-year old Gibraltar row rumbling on (a British minister said that long-term damage was being done to the two countries' relations), and British expat communities in Spain (there are plenty more fish and chip shops on the Costa Brava than there are in Wigan) being labeled as havens for wanted criminals. My solution to the Gibraltar problem is the same as for Argentina and the Falkland Islands: sell it back to the Spanish and use the money to buy a Greek island to re-settle the population. But I hope no-one from Gibraltar reads this or I'll be in real trouble.
    Source: www.lowtax.net/asp/story/front/Spains_Pastor_Pledges_Port_Tax_Cuts____61963.html

  • Aug 29, 2013   Spain: bristling

    Neither Spain nor the UK (in the shape of its satrapy Gibraltar) comes out well from the current spat over concrete blocks being dumped into the Mediterranean. The patch of water where the blocks were dumped is so close in to the Rock, right alongside its airport indeed, that it is hard to believe anyone would want to fish there. On the other hand, given that Spain disputes ownership of every bit of Gibraltar, including all of its water, it seems careless to a degree that the Gibraltarian authorities would not have consulted in advance, especially if, as they claim, this is an ecological measure designed to encourage marine life. It's probably more cock-up than conspiracy, but that doesn't justify Spain in manning the barricades so aggressively. What I want to know, though, is how concrete blocks are going to encourage fish life? Perhaps really they are stage one of an airport expansion, and the new runway is going to be made of armoured glass, so that it can double as a tourist attraction at night-time, with floodlit, concrete-loving, vibration-proof fish swimming around happily underneath. Space is very limited in Gibraltar, it's a fact.
    Source: www.lowtax.net/asp/story/front/Spain_Threatens_Congestion_Tax_On_Gibraltar____61816.html

  • Aug 08, 2013   Spain: circles the vortex

    Just in case you think that I am taking political sides (heaven forfend) I will have a go at the nominally right-wing Spanish Government. The truth is that I am totally cynical and pessimistic about all governments, and require sustained, incontrovertible evidence before beginning to believe that any individual govermment is getting it right. No British or North American government would have survived the scandals that have rocked Premier Rajoy's government, but we are not here to judge its morals, only its performance, and that is highly questionable, for the usual reasons: all spend and no save. Tax revenues have risen 5 percent, says the Treasury proudly, as if that's evidence of economic recovery. Do me a favor! It's evidence of increased taxes, that's all, so it's bad, not good. The economy itself is continuing to shrink. Allowing that the government has done some sensible things for small business and entrepreneurs, the rest of its fiscal program is positively Micawberish. The horrid reality is that the deficit is at 3.8 percent; debt is 90 percent of GDP, up 20 percent in just one year, and continuing to rise. Somebody cleverer than me will have to explain why the market price of 10-year Spanish debt is a mere 4.6 percent, 3 percent over German debt. It's a conjuring trick being performed by mentalist Draghi. I see only disaster ahead.
    Source: www.lowtax.net/asp/story/front/Spain_Posts_OnYear_Tax_Increase_In_June_2013____61596.html

  • Jun 06, 2013   Spain: walking the walk

    I may have to admit that I was wrong in saying that the Spanish Government was all talk and no walk. Its latest package of support for small business is practical and significant, giving substantial encouragement to people to start and/or invest in businesses. Presumably it has been cleared with Brussels, but if not, it wouldn't be the first time that Spain has gone its own way first and looked for approval afterwards. It's also not quite clear whether the new measures are consistent with the Government's stability program announced at the end of April, which sees a deficit of 6.3% of gross domestic product this year (revised upwards recently from 4.5%), 5.5% in 2014, 4.1% in 2015, and of 2.7% in 2016. Those numbers are in line with the Commission's deficit targets for Spain, although only because the EU, bowing to the inevitable, announced this week that Spain (and France) would be given an extra two years to reach their fiscal targets. It's difficult to see how even these latest targets can be reached without significant savings; let's hope that Prime Minister Rajoy takes a leaf out of Britain's book. Challenging as it is, the only way of saving Europe is to cut bloated state sectors, and cut them hard.
    Source: www.lowtax.net/asp/story/front/Spains_Fiscal_Package_Fosters_Entrepreneurial_Culture____60899.html

  • Apr 18, 2013   Spain: mistreat China

    One country which is conspicuous by its absence from the TPP talks is of course China. Although there are ongoing negotiations between the Middle Kingdom and various other countries, and China has FTAs with a scattering of other countries, notably including ASEAN and New Zealand, on the whole it is lagging. And it considers itself as an injured party in trade affairs, complaining this week about the level of "dumping" and "counter-vailing" measures it is subject to, particular emanating from the USA. A lot of the problem revolves around the designation of China as a "non-market economy" (NME). For anyone who, like me, finds it extraordinary that China should still be regarded as an NME, a word of explanation is in order: an NME is a country in which the State subsidizes enterprises or indulges in other non-market behaviour, despite WTO rules against it. So, an NME is allowed to cheat, if you will; but the other side of the coin is that for an aggrieved counter-party, the burden of proof is lower in anti-dumping proceedings. China's accession agreement to the WTO allows it to retain NME status only until 2015; but the change is not in China's gift, and both the USA and the EU persist in regarding China as an NME, despite frequent requests from China for them to treat it as a market economy.
    Source: www.lowtax.net/asp/story/front/China_Sees_Itself_Subject_To_Increasing_Trade_Friction____60398.html

  • Mar 21, 2013   Spain: treating the symptoms

    Two cheers for Spain, which has put in place a package of measures to do something about youth unemployment. Only two cheers, because normally you can't bribe firms to take on extra workers, or persuade young people to start businesses if they don't already plan to. What happens instead is that a firm will take on a young worker instead of an older one it was already planning to hire, or, worse, get rid of an older worker. Except in Spain it's probably quite hard to do that, which is exactly the kind of rigidity Spain ought to be dealing with. Germany showed how that problem can be dealt with, ten years ago, making a bonfire of many of its rigid employment rules. With youth unemployment at more than 50% in many parts of Spain, it's for sure that something has to be done, but make-work schemes are probably not the answer; it's just throwing good money after bad.
    Source: www.lowtax.net/asp/story/front/Spain_Unveils_Youth_Unemployment_Tax_Plan____60115.html

  • Jan 24, 2013   Spain: Texas hold-up

    Now for some fun: we're going gambling! But be careful, if there's money on the table and if the Cyprus tax police catch you playing bridge or poker or gin rummy, they'll arrest you. It's one of the (many) countries in which only the State is allowed to offer gambling, but of course the odds are terrible, so everyone pours across the border to the Turkish-occupied North where casinos line the streets. On-line gambling is prohibited, naturally. Strangely, bingo is allowed, perhaps in deference to British pensioners; the prisons are already bursting, so where would they put all those criminal British grannies? In Sweden, Italy and in Spain, the tax authorities try to collect tax from poker players, and Spain has just announced a pogrom against them. Silly me, I can't see the difference between taxing the mafia and taxing professional gamblers, if both activities are illegal. Do the Italian tax authorities shut their eyes when a Sicilian farmer with a smallholding declares and pays tax on a declared income of half a million euros? Or do they report him to the carabinieri? In the case of a poker player (and the Italians estimate that 4,000 players made EUR100m last year at it) presumably they just take the money and smile out of clenched teeth. Well, leaving aside the moral dimension, which is fairly slippery if not outright dangerous ground, let's consider the likely results in Spain. Naturally I agree that a Spanish resident who makes EUR200,000 profit from professional poker-playing should pay tax on it; it's part of her world-wide income, even if she made it in tournaments in Costa Rica. But she has a few defences: first being costs, including business-class travel, bodyguards (tricky places, casinos), clothes (designer couture is de rigeur at these tournaments). Naturally the tax authority will accept all such deductions, won't it? If it doesn't, or even perhaps if it does, our heroine will wonder about the pearl necklace she bought for cash out of the side bets she made on her performance in the tournament. You can't blame the tax authorities for trying to uphold the law, but you definitely can blame the governments concerned for allowing such a travesty to continue. The Spanish ought to legalize gambling, set up international tournaments in Barcelona, give incentives to attendees (low, flat-rate final withholding tax), and create a 'gaming box' like a 'patent box' or an 'interest box' with lower income tax rates. And pigs may fly. If they continue to persecute their poker champions, however, they'll quickly find they haven't got any.
    Source: http://www.lowtax.net/asp/story/front/Spanish_Tax_Agency_Searching_Out_Poker_Winnings____59174.html

  • Sep 27, 2012   Spain: slides leftwards

    They don't get it in Madrid. This is a supposedly right-wing government, but all they do is talk about more control-freakery in full-on Socialist mode. This week it was hate object no. 2, the oil companies (hate object no. 1 is of course the banks). They would like to increase taxes on the oil companies in order to 'reduce their profits and reduce inflation'. Sigh. Back to business school with the lot of them! The only result of increasing taxes is to increase inflation; it seems so obvious that it's hardly worth saying. The next thing will be the introduction of price controls and hey presto! before you know it we are back to 1970. Anyway, the government has more pressing concerns, because it seems to be faced with a rebellion from one or more of its 'autonomous' provinces, and especially Catalonia. Hey! I have a good idea: why not sell Catalonia to the Catalans? Brussels would be pleased, because it would mean more bureaucrats, interpreters and sherpas; Barcelona would be pleased, because it would become what it already thinks itself, an international capital city; Madrid would be pleased because it would get a big pile of money in exchange for giving up its taxing rights; and the banks will be pleased because they can buy sovereign bonds from a new country that hasn't got any debt. Catalonia could then do exactly what Spain, Italy and Greece have been doing for the last thirty years, and it will be 2040 before anyone notices!
    Source: http://www.lowtax.net/asp/story/front/Spain_Considers_Tax_Measures_To_Cut_Oil_Profits____57225.html

  • Sep 06, 2012   Spain: did invent Don Quixote, after all

    'Never do business with a bearded man', my father used to tell me (a prejudice shared with Margaret Thatcher, interestingly), so I get some amusement from watching the Spanish people being duped with Mr Rajoy's smoke and mirrors. 'I won't increase income tax or VAT,' he says. Excuse me? He is in the middle of doing both, right now! Who does he think he's kidding? Anyway, he will, increase them again, that is. He'll have to, with a rag-tag army of bankrupt municipalities spending money like it's going out of fashion, which he pretends to Brussels he has under control. Dream on, all of you.
    Source: http://www.lowtax.net/asp/story/front/Rajoy_Dismisses_Fears_Of_Future_Tax_Rises____57010.html

  • Aug 30, 2012   Spain: hoist by its own petard

    Who would be a Spanish energy company? The government's long-term subsidization of the renewables sector, done ostensibly to encourage alternative energy sources, but presumably also with an eye to electoral benefit, has now put its unfortunate clients between the devil and the deep blue sea. Not sure which way round it is, but maybe the deep blue sea is the prospect of a swingeing new tax on energy supplies, while the devil will be Brussels' refusal to allow direct sectoral aid to the blighted industry the incentives have created. It's difficult to understand how Brussels has allowed the game to go on as long as it has. Surely such blatant assistance to the renewables sector, however fashionable it is, constitutes state aid on a monster scale?
    Source: http://www.lowtax.net/asp/story/front/Spanish_Energy_Taxation_Up_In_The_Air____57009.html

  • Jul 19, 2012   Spain: lots of rain and no plain

    Perhaps it's unfair to penalize Spain, as I'm going to, for increasing VAT by a whopping three percent, when Prime Minister Rajoy was saying all the right things: get the regions under control, reorganize the civil service, privatize swathes of infrastructure. Well, words come easy. When he actually does those things he will get stars, but not right now. When he got himself elected recently there was no mention of higher taxes, union-bashing and the rest. It's only now, when he has no choice and the troika is breathing down his neck that suddenly they jump up the agenda. We shall see!
    Source: http://www.lowtax.net/asp/story/front/Spain_Unveils_Fresh_EUR65bn_Austerity_Package____56341.html

  • Jun 15, 2012   Spain: drinks deep from the poisoned chalice

    As was easily predictable, the power-that-don't-have-any in Europe have been congratulating one another with lots of back-slapping over their splendid wheeze to give Spain EUR100bn to save its raddled banks. What does this actually mean? It means that Spain's politicians and their banker cronies have put the country's taxpayers into debt to the tune of another 100bn, that's all. This disgraceful game of saving the hides of bankers, their greedy developer partners and their foolish shareholders at the expense of hard-working tax-payers (I'm allowed a bit of poetic license) should never have been started, and the more it is played, the closer we will come to revolution. When, not if, the countries that are given this largesse go bankrupt in their turn, it will be the taxpayers of Europe that have to pick up the tab. Four countries have now swallowed the poison; it's only a matter of time before it kills them.
    Source: http://www.lowtax.net/asp/story/front/Eurogroup_Assured_Of_Spains_Commitment_To_Fiscal_Reform____55868.html

  • May 31, 2012   Spain: puts the shackles on betting

    The week's most egregious behaviour comes from Spain (again!), which has dug around in its statute book for laws which will allow it to extract tribute retrospectively (hated word!) from two offshore gaming companies, Bwin (based in Gibraltar, hmmm) and Sportingbet, based in Guernsey, by applying a tax to their Spanish turnover which was originally intended to cover offline gaming. The companies will cough up, because they want to be given licenses under Spain's new gaming law. As in a number of other EU countries, this law attempts to force gaming providers to do so through Spain-based servers, and/or to tax Spanish transactions routed through offshore providers. Such laws drive a coach and horses through EU single market principles, and it is a tragedy that the ECJ is standing by with its arms folded during this destruction of hard-won freedoms.
    Source: http://www.lowtax.net/asp/story/front/Spain_Moves_Tax_Goalposts_For_EGaming_Firms____55581.html

  • May 24, 2012   Spain: forgets the Treaty of Utrecht (again)

    It's way too easy to punch Spain. If this is a conservative government, give me Marxism, the voters must be saying. But it's not taxes that are the problem this week, for a change, it's the new government's relapse into a historically xenophobic, anti-British set of attitudes which may have been appropriate in the 18th century but don't belong in modern Europe. Wrecking the long and careful confidence-building process that had almost brought about a resolution of the Gibraltar problem is a piece of mindless hooliganism. And to what purpose? Queen Sophia's calculated snub to the British Olympics, by comparison, seems little more than a minor piece of rudeness.
    Source: http://www.lowtax.net/asp/story/front/GibraltarSpain_Tripartite_Forum_Abandoned____55440.html

  • May 10, 2012   Spain: increasing taxes, failing to curb public expenditure, and is about to throw away zillions in taxpayers' money to rescue its bankrupt banking sector

    Source: http://www.lowtax.net/asp/story/front/Rajoy_Eyes_Taxpayer_Funds_To_Shore_Up_Ailing_Banks____55338.html


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