The Partido Popular (PP) has announced a package of tax proposals that it says would return around €3.2 billion to taxpayers through changes to Spain’s Personal Income Tax (IRPF) system. The measures also include tax relief for self-employed workers, lower energy taxes and support for industry, with the party arguing the proposals are designed to ease the financial pressure on households caused by inflation.
The proposals have been submitted to the Spanish Congress as a Proposición No de Ley (PNL). While a PNL does not automatically become law, it sets out the policies the PP intends to pursue if it forms the next government.
€3.2 billion income tax proposal
At the centre of the package is a proposal to update the first three IRPF income tax bands to reflect inflation. The PP argues that tax thresholds have not kept pace with rising prices, resulting in many taxpayers paying more tax despite seeing little or no real increase in their purchasing power.
According to the party, adjusting these tax bands would return approximately €3.2 billion to Spanish taxpayers.
Speaking at a press conference in Madrid, PP national spokesperson Borja Sémper said:
“Less voracity and more relief for households. The reconstruction that Spain needs begins with the pockets of Spaniards and I can assure you that President Feijóo is prepared to set it in motion as soon as he is President of the Government.”
The PP also says the package is intended to help offset the economic impact of inflation and recent international events, arguing that families should be refunded money that has effectively been collected through fiscal drag.
Rising living costs
The party believes middle-income households have been hit hardest by the rising cost of living.
Sémper said:
“The middle classes are the ones bearing the suffocating rise in prices. The CPI has risen by 25 percent since 2018 and the shopping basket by 41 percent. Life is much more expensive, energy weighs more on households, Spaniards pay more taxes than ever, wages have lost purchasing power, and there are more families than ever depending on subsistence aid, proof of the failure of their economic policy.”
VAT proposal for self-employed workers
Alongside the proposed IRPF changes, the PP is calling for a 0% VAT regime for self-employed individuals with annual turnover below €85,000.
The proposal aims to simplify VAT administration for smaller businesses while reducing compliance costs for thousands of autónomos across Spain.
The party has grouped these measures under the slogan:
“Less taxes and less red tape for those who need it most.”
Lower energy taxes
The package also includes several proposals aimed at reducing energy bills for households and businesses.
These include:
- Extending the current reductions in taxes on electricity, gas and fuel for a further three months, with the possibility of additional extensions.
- Abolishing the tax on the value of electricity production in an effort to lower electricity prices.
Commenting on the proposal, Sémper said:
“It makes no sense for the Government to use electricity as a cash register while millions of families, self-employed individuals, and small businesses are struggling to make ends meet.”
Support for Spanish industry
The PP has also announced plans to introduce a dedicated support package for Spain’s industrial sector.
According to the party, the proposals are designed to protect energy-intensive industries, promote cogeneration, reduce system costs and improve competitiveness by helping manufacturers cope with higher energy prices.
Sémper concluded:
“It is not enough to alleviate the general bill: Spain needs its factories to be able to compete on equal terms.”
What happens next?
As these proposals have been submitted as a Proposición No de Ley (PNL), they are not automatically implemented. Any changes to Spain’s tax system would require further legislative approval before becoming law.
For employees, self-employed workers and businesses, however, the announcement provides a clear indication of the direction the PP says it would take on tax policy if it enters government.
Need advice on Spanish taxes?
Whether you’re an employee, self-employed (autónomo), a company director or an expat living in Spain, proposed tax changes can raise plenty of questions. While these measures are not yet law, it’s important to understand how any future changes could affect your personal or business tax position.
At Baleario, we help individuals and businesses across Spain with:
- Spanish income tax returns (IRPF)
- Self-employed (autónomo) accounting and tax
- Company accounting and compliance
- Non-resident tax
- Beckham Law applications
- Ongoing tax planning and advice
If you’d like tailored advice from experienced Spanish tax specialists, explore our accounting & tax services or get in touch with our team today.
