Upcoming Tax Reforms || Part 2

The new left-wing government that recently came into power has proposed numerous tax reforms aimed at ending austerity measures while stimulating economic growth. The following are tax additional measures that should be introduced either in 2016 or 2017.

6. Corporate tax
The IRC tax rate will hold steady at the current 21% level instead of reducing further as previously planned. Incentives for the installation of companies and production zones in interior regions of the country will once again be encouraged. In addition, a fiscal stimulus system on personal income tax related to small and medium enterprises should also increase.

7. Limits on fiscal liens
The tax foreclosure on homes that serve as the family residence will be prohibited when the tax debt in question is lower than that value of the property. In other situations, it is proposed to suspend seizures of family homes in general.

8. Fines and limited inspections
The new government wants to limit the performance of successive tax inspections of individual taxpayers and small businesses and also wants to ease excessive fines and the amount of punitive interest due for non-compliance of tax obligations.

9. Credit compensation
Individuals or small companies with accumulated tax credits should become able to apply these credits against future tax obligations whether in IRS or to Social Security obligations. However, it is not as yet clear what the level of income will be for eligibility to participate in this set-off programme.

10. Wealth tax
The ruling left-wing parties are contemplating the re-introduction of an Inheritance Tax. This levy on high-value estates will be aimed at fortunes above one million euros. The revenue that will be obtained through this new tax will be attributed to Social Security.

This is the final article in a two-part series.

By Dennis Swing Greene
|| features@algarveresident.com

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com