The problems facing the EU become larger and larger every day. In Spain it was recently announced that the government has negative corporate tax collections, or in other words, they issued half a billion euros more in refunds than they received in actual payments. This is a first, especially because they actually forecasted a 20% increase in payments.
Here is an excerpt from an intriguing article from MishTalk about Spain’s negative corporate tax collections:
“The budget mess in Spain just got a lot worse. Instead of corporate tax collection rising by the budgeted 20%, collection actually went negative. The latest data from the Treasury shows that corporation tax collection is negative €539 million compared to €1.814 billion in revenue by 2015. Never since the beginning of the corporate tax in 1995 has corporate tax collection been in negative territory. There have been more refunds than payments. The “State Budget 2016” forecasted that revenue would increase by 20 percent. Brussels is currently debating whether to punish Spain for failing to meet the deficit limit by 2015.”
The sharp decrease of corporate tax collections over the past 10 years has been nothing short of remarkable. Spain’s corporate taxes are their only taxes that have not returned to pre-2007 levels.
Spain could be fined as much as 0.2% of their national output after the EU finance ministers gave Brussels executives their approval to do so. Under EU rules, member states are supposed to limit budget deficits to 3% of GDP and keep their debt ratios below 60%. The Spanish deficit last year came in at 5.1% after they agreed to set the target at 4.2%, both way above 3%.
Now Brussels is faced with the question of whether they should put another country on their “naughty” list, like the UK after Brexit. Both Spain and Portugal have so far avoided punishment from the EU for falling way short of their budget targets set by Brussels. The government of Spain and the bureaucrats of the EU are very worried about the rising tide of populism and strong public opinion against any austerity measures. The EU is losing control and credibility.
Read the full article here: https://mishtalk.com/2016/07/22/corporate-tax-collection-in-spain-goes-negative-e539-million/