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Spain Unveils Youth Unemployment Tax Plan

by Ulrika Lomas, Tax-News.com, Brussels

15 March 2013


Spain’s Prime Minister Mariano Rajoy has recently unveiled details of a series of "emergency" fiscal measures aimed at combating youth unemployment in Spain.

Spread over four years and financed in part by the European Union, the EUR3.5bn (USD4.5bn) plan is designed to benefit over a million young people in Spain. To support young entrepreneurs wishing to set up their own business, the Government plans to continue paying unemployment benefit for up to 9 months, either partially or in full. To encourage firms to recruit young staff, companies will benefit from a reduction in social charges of up to EUR800 a year for a maximum period of three years if they employ anyone under 30.

Presenting details of the Government’s 2013-2016 Entrepreneurship and Youth Employment Strategy at Moncloa Palace, Prime Minister Rajoy explained that: "This plan, which is fully in line with current reality and offering specific solutions, will mark a before and after in the fight for economic recovery and job creation."

Rajoy said: "It is not a declaration of intent or a draft document but rather a reality that has already been set in motion. It is a plan that contains one hundred measures to which will be earmarked EUR3.5bn over four years. These measures include 15 short-term emergency measures that will benefit over one million young people, which are tailored measures excluding nobody because this effort must be aimed at everyone, for everyone."

Mariano Rajoy explained that this latest strategy will create positive synergies with other measures and reforms that are already underway, including changes to value-added tax (VAT) rules. From January 2014, VAT will no longer need to be paid to the State until it is collected. Other previously announced measures include the reduction of financial intermediation costs and the extension of the Supplier Payment Plan.

TAGS: tax | business | value added tax (VAT) | entrepreneurs | corporation tax | unemployment | Spain | tax breaks

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