By Linda Hall • 17 February 2023 • 18:20
MADRID: Regional government’s headquarters in the Casa de Correos
Photo credit: CC/Dennis Jarvis
Almost half live in the Madrid Community, the only region in the country which charges no Wealth Tax at all although those who would be liable to pay it elsewhere must make a yearly declaration.
This strategy has clearly paid off, as 5,176 (47 per cent) of the country’s biggest earners live in the Madrid Community, Tax Authority Hacienda revealed.
Next comes Cataluña which has 2,334 taxpayers earning an annual €601,000 or more (21 per cent) followed by the Valencian Community’s 887 (7.9 per cent) and Andalucia with 799 top earners (7.2 per cent).
Meanwhile, Madrid’s generous Wealth Tax policy allows it to bring in an annual €830 million via IRPF income tax. This accounts for 38 per cent of the €2.17 billion that Spanish residents pay Hacienda each year, although analysts point out that this is still nine percentage points short of the Madrid region’s percentage of big earners.
There is also another reason for the noticeable difference between Madrid and the rest of the country, which economists describe as the “headquarters effect”, as big national and international firms choose the capital for their head offices. In turn, the city has a higher proportion of taxpaying executives, they explained.
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Originally from the UK, Linda is based in Valenca and is a reporter for The Euro Weekly News covering local news. Got a news story you want to share?
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