New tax measures introduced in Law 12/2015 regarding general budgets for the autonomous community of the Balearic Islands in 2016
The new year (and the one just over) has brought an important change to the taxing of lots of sources of income that are highly important to the economy of the Balearic Islands. The new measures have been agreed in Law 12/2015 of 2015, of 29 December, regarding general budgets for the autonomous community of the Balearic Islands for the year 2016.
Firstly, we are faced with an increase to the autonomous region tax scale for Personal Income Tax (IRPF).
The autonomous community tax scale for personal income tax applicable to the general taxable base will be as follows (taking effect from 31 December 2015):
| Taxable base from (euros) | Total tax due (euros) | Remaining taxable base up to (euros) | Applicable rate (%) |
| 0 | 0 | 10.000 | 9,50 |
| 10.000 | 950 | 8.000 | 11,75 |
| 18.000 | 1.890 | 12.000 | 14,75 |
| 30.000 | 3.660 | 18.000 | 17,75 |
| 48.000 | 6.855 | 22.000 | 19,25 |
| 70.000 | 11.090 | 20.000 | 22 |
| 90.000 | 15.490 | 30.000 | 23 |
| 120.000 | 22.390 | 55.000 | 24 |
| 175.000 | 35.590 | Hereafter | 25 |
This modification will increase the tax burden on residents in the Balearic Islands that obtain revenue higher than €70,000, as the minimum rate will remain at 9.5%, and the maximum rate will increase from the taxable base of €70,000 upwards. Also, the number of tax brackets will increase from 6 to 9.
Secondly, the beneficial reduction to Inheritance Tax that was enjoyed by taxable persons included in groups I and II -namely, ascendants, descendants and spouses- will be modified from €700,000 upwards, with the applicable tax rate rising progressively up to 20%.
The total amount of tax to be paid will be obtained by applying the tax base to the following scale:
| Taxable base from (euros) | Total tax due (euros) | Remaining taxable base up to (euros) |
Applicable rate (%) |
| 0 | 0 | 700,000 | 1 |
| 700,000 | 7,000 | 300,000 | 8 |
| 1,000,000 | 31,000 | 1,000,000 | 11 |
| 2,000,000 | 141,000 | 1,000,000 | 15 |
| 3,000,000 | 291,000 | Hereafter | 20 |
We continue with the Property Transfer Tax, where the scale for the transfer of property has been modified, with a new bracket established from €1,000,000 upwards, with a rate of 11%
The table will look as follows:
|
Total property value from euros |
Total tax due euros | Remaining value up to euros | Applicable rate percentage |
Average effective tax rate |
| 0 | 0 | 400,000 | 8.00 | 8.00 |
| 400,000 | 32,000 | 200,000 | 9.00 | 8.00 to 8.33 |
| 600,000 | 50,000 | 400,000 | 10.00 | 8.33 to 9.00 |
| 1,000,000 | 90,000 | Hereafter | 11.00 | 9.00 to 11.00 |
Lastly, and also coming into effect on 31 December 2015, the minimum amount exempt from the Wealth Tax has been reduced from €800,000 to €700,000 and the tax rate has been increased in ALL of the brackets.
The difference is substantial, with the tax burden for this tax having risen by around 40%:
| Taxable base up to euros | Total tax due euros | Remaining taxable base up to (euros) | Applicable percentage rate |
Applicate rate in 2014 |
| 0 | 0 | 170,472.04 | 0.28 | 0.20 |
| 170,472.04 | 477.32 | 170,465.00 | 0.41 | 0.30 |
| 340,937.04 | 1,176.23 | 340,932.71 | 0.69 | 0.50 |
| 681,869.75 | 3,528.67 | 654,869.76 | 1.24 | 0.90 |
| 1,336,739.51 | 11,649.06 | 1,390,739.49 | 1.79 | 1.30 |
| 2,727,479.00 | 36,543.30 | 2,727,479.00 | 2.35 | 1.70 |
| 5,454,958.00 | 100,639.06 | 5,454,957.99 | 2.90 | 2.10 |
| 10,909,951.99 | 258,832.84 | Hereafter | 3.45 | 2.50 |
Although the Central Government brought forward tax improvements scheduled for 2016 and 2017, and applied them to 2015, the new regional government of the autonomous community of the Balearic Islands has decided to increase the tax burden for tax payers with a higher level of economic rent.
