Law 5/2017 of Catalonia, ancillary to the Catalonian Budget Law of 2017, enacted, with important tax amendments

On 30th of March 2017, Law 5/2017¹ was published in the Catalonian Official Gazette (DOGC). This Law includes important amendments affecting taxes in Catalonia; both as regards taxes assigned to Catalonia from the central government and as regards taxes which result from its own financing system.

The most salient features of these amendments are highlighted below.

Main amendments as regards Transfer Tax.

The tax rate applicable to transfers of real estate, including the creation and assignment or rights in rem over real estate located in Catalonia, has been amended.

Until now, such transfers were taxed at a 10% rate. With the amendments, applicable to transfers as from 31^st of March 2017, the rate applicable to transfers in real estate or in rights over one million Eur., will be greater, since such transfers will now be taxed in accordance with the following scale:

A greater Stamp Duty tax rate will also apply to transfers where there has been a waiver to the VAT exemption. Thus, the current rate of 1.8% is now increased to 2.5%.

Moreover and in relation to transfers of goods and chattels, Catalonia had until now only made use of its jurisdiction to apply an increased rate (5% in comparison to the 4% applicable in accordance with regulations from the central government) in the case of transfers of means of transport.

The increased 5% rate will now apply over transfers of all types of goods and chattels, including the assignments of rights in rem over them.

Comments in relation to the creation of three new Catalonian taxes.

The following three new taxes have been enacted:

• Tax over packed or bottled sugary beverages.

The liability for this tax, compatible with VAT, will fall on any person or entity supplying the taxed sugary drink to the final consumer.

As a general rule, the tax will apply to beverages containing added calorific-value sweeteners. Certain beverages are expressly excluded, such as beverages obtained from natural juices or milk, yoghurt drinks, alcoholic beverages, products for medical use, etc.

• Tax over the production, handling, transport, custody and emission of elements with radiotoxicity.

The aim of this tax is to impose a levy over the local environmental risk deriving from the production of radiotoxic elements in connection with thermonuclear reactions. The tax also addresses the handling, transport and custody of such elements.

Thus, businesses deriving a benefit from an activity linked to these radiotoxic elements should assume the environmental and human health costs resulting from the negative effects of such activities.

• Tax over motor vehicles emissions.

This tax is aimed at the emission of greenhouse-effect gases. The amounts collected will be allocated to a climate fund and a natural heritage fund.

Main amendments in relation to Catalonian taxes already enacted.

• Tax over empty dwellings

New exemptions will now apply and formalities will be simplified.

• Tax over large commercial premises.

The law and regulations governing this tax are repealed, making way for new rules. Such new rules are designed to address the environmental impact resulting from the flow of vehicles to these premises.

• Tax over the sojourn in tourist accommodation.

Among the amendments to this tax, the creation of a new “collection auxiliary” is especially relevant. This voluntary “collection auxiliary” will allow digital online platforms to cooperate in the collection of this tax.

¹ Law 5/2017, dated 28th of March, enacting tax, administrative, financial and public sector measures and creating and regulating the taxes over large commercial premises, over the sojourn in tourist accommodation, over elements with radiotoxicity, over packed or bottled sugary beverages and over carbon dioxide emissions.