Spanish Government Aims To Cut Corporate Tax

by Ulrika Lomas, Tax-News.com, Brussels

09 January 2006

Spain's Economy Minister Pedro Solbes stated last week that the government will introduce proposals into parliament this month aimed at simplifying and cutting rates of taxation, including corporate tax.

In an interview with the Spanish daily La Vanguardia last week, Mr Solbes revealed that the Socialist Party government wishes to unify the various rates of capital gains taxes and implement a cut in the corporate tax rate to 30%, bringing the Spanish company tax rate more into line with the European Union average.

However, in a bid to make the reforms revenue neutral, Mr Solbes stated that the government will also seek to phase out a number of corporate tax deductions.

“Our aim is to maintain fiscal pressure. That means we intend to cover the reforms with an increase in revenues from economic growth," he told the paper.

The minister also outlined plans to streamline and cut personal income taxes.

The tax cuts will go before Spain's Parliament later this month and are expected to be implemented next year.

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