How many taxes do we Spaniards pay?

Taxes are one of the expenses that taxpayers must face for the correct performance of the economy. There are not only direct taxes, but those considered indirect, as you will be able to verify in this article. Because taxes are really the tributes that each person, family or company must pay the state to pay for collective needs, thus contributing a part of their income. To the point that they are practically necessary in democratic societies. Although it may involve more than one headache in the taxpayers' statements.

There is one thing very clear and that is that as you pay more taxes, you will have less money in your checking account. Something that liberal economic theories are against. Because it means that taxpayers will have much less money to use for consumption or other economic activities. With which the general accounts of each state suffer because the economic flow is significantly lower. For this reason, there are different economic currents that are favorable or not to increase or decrease the tax burden among citizens.

On the other hand, it must not be forgotten that taxes can be revised with some regularity depending on the economic needs of each of the countries. From this general scenario, it can be said that with these monetary resources it is the states that obtain sufficient resources to carry out their actions. In actions as diverse as administration, infrastructures or even the provision of services. In a certain way, these segments depend on this tax burden that comes out of pocket by the taxpayers.

Taxes: direct and indirect

A first difference in general rates is divided between direct and indirect taxes. From this tax approach, it is the former that most interest a good part of taxpayers because they have to pay them in all scenarios. In a way, they are rates more open to all for its special characteristics. Because in effect, they will not only affect taxpayers in the same way, as you will see from now on.

On the one hand, there are the so-called direct taxes, which are basically those that fall directly on the person, society, company, etc. Because they are based mostly on the economic capacity of those affected. That is, depending on their assets and the generation of income. Some of the best known and those that you will have to face are those that refer to personal income tax, corporation tax or inheritance and gift tax. Also other minors who will not be subject to a later explanation.

Indirect taxes

On the other hand, there is this class of fees that are also very important for fundraising by the different states of the world. One difference that distinguishes them from another lies in the fact that these taxes are imposed on goods and services and not on people as is the case with direct taxes. That is, indirectly as its name refers. People consume a product or item and therefore must pay taxes on his actions. Sometimes in a much more expansive way when it comes to the percentages that are applied.

From this general scenario, there is no doubt that these taxes may be more fair than the others. Where some are present as well known as VAT, the tax on patrimonial transfers or the special taxes on alcoholic beverages. It should be clarified that some of these fees are paid depending on whether you consume their products. Because in effect, you do not have any relationship with them, you will not have to pay them at any time, as happens at the moment with taxes on alcohol. Not surprisingly, they only apply to consumers and not to other people as we have already explained to you.

Proportional or regressive rates

Another of the divisions that taxes may be subject to is the one that is governed by these very special parameters. Where proportional taxes basically refer to a fixed percentage in which the tax base is not taken into account at all. On the other hand, there are also taxes denominated as regressive and which are those where the higher the profit or income, the more will be the amount you will have to pay. One of these examples would be represented by VAT on basic goods, which are very widespread in the current tax system in Spain.

All the progressive rates they may be the most neglected, but they will not be the least important from a fiscal point of view. Its tax strategy is based on an axiom as simple as that the higher profits or rents, the higher the percentage of taxes that must be paid by the taxpayers. A clear example of this tax system is the one reflected by the income tax, one of the most characteristic of the Spanish fiscal calendar and which has been truly progressive since its creation. To the point that it can harm your tax interests depending on the earnings you have in each year.

The main taxes

In Spain, there are a series of rates that stand out over the rest and those are the ones that we are going to present to you with a little more explanation. They refer to some of the most important of the fiscal national fiscal calendar and that are characterized because they are within the competence of the Autonomous Communities or Local Treasuries, but also others that are managed by the State.

One of the most relevant is the Income Tax for Individuals (IRPF). It is a tax on income is a tax levied on the profit of individuals, companies, or other legal entities rate. You have to formalize it every year and in which all income derived from work and income must be taken into account. Virtually all taxpayers must formalize it, in some cases with a self-assessment to return or pay. It does not deserve further explanation due to its great popularity among all taxpayers.

Corporation Tax (IS)

Of course, this tax is not as massive as the previous one. Not surprisingly, the corporate tax is the one that refers to the tax on corporate income, which is a direct tax, of a personal nature and usually of a single tax rate, which falls on the profits obtained by the companies. On the other hand, you cannot forget that its application is carried out mainly on companies and not on individuals, so it is much more restricted in its real effects.

Another rate of these characteristics is the one that refers to the Wealth Tax, which is better known as the wealth tax or the fortune tax. It is an important rate that is applied individually, not on annual income or transactions, but on personal assets of natural persons. To the extent that it determines people's real wealth, to a greater or lesser degree. Therefore, it is more restricted to the rest of the citizens to differences from other more general ones.

Value Added Tax (VAT)

It is another of the great taxes that is imposed in the national fiscal calendar and presents a series of differences that determines it as a somewhat special rate. From this context, VAT is a tax that you have to carry out on a good part of the professional and commercial operations. So that you have it clearer from now on, you should know that VAT is a tax burden on consumption, that is, financed by the consumer as a regressive tax, applied in many countries and widespread in the European Union.

It is applied with different percentages depending on many variables. Because in effect, it varies depending on the product or service that is bought or sold, and therefore there are different treatments in VAT. Like the following that we expose you below.

• General VAT (21%)
• This is the default VAT rate and will apply to most products and services: clothing, DIY, tobacco, plumbing services, hospitality, household appliances, etc.
• Reduced VAT (10%)
• This type includes a great variety of products as you well know by now. The most notorious include food products, water, pharmaceuticals.
• Super-reduced VAT (4%)
• The super-reduced VAT rate is applied to goods and services that are considered essential. As in the following aspects that we expose you:
  Basic foods in the shopping basket (milk, bread, rice, etc.).
  Books and newspapers (magazines and newspapers)
  Medicines for human use
  Prosthetics, internal implants, orthotics and vehicles for people with disabilities.

Nor can we forget the Real Estate Tax, which is better known by its acronym, IBI. In this case, and unlike the others, it is a direct local tax that taxes the ownership and real rights you have over any real estate.