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2019 fiscal year

3. Corporate Tax

The income from Corporate Tax in 2019 was 23,733 million, 4.4% less than in 2018.

The year was characterized by the existence of extraordinary refunds (without any link with the tax determinants) and the low growth of profits, bases and, with them, income.

In 2019, a growth of 2.3% for profits and 0.5% for the consolidated tax base is estimated. The figures are notably lower than those observed in 2018 (Table 3.1). The information available for the estimate is that which comes from the declarations of the fractional payments of the Large Companies and tax groups that pay taxes on the profits of the period. According to the information declared (Table 3.2), profits in 2019 decreased compared to 2018, a fall concentrated in the consolidated groups and more specifically in a small group of five groups that were the same as the previous year and had led the strong growth that was recorded. in payments. For their part, Large Companies also saw their growth reduced, but still maintained a slight increase (1% compared to 6.1% in 2018).

The evolution in 2019 widens the divergence between profits and the tax base. Profits reached in 2017 the maximum level they had achieved before the crisis (just ten years before), but the tax base was still below 70% of the total that existed then. Part of the lower recovery of the base has to do with the changes that were introduced in the 2015 reform (by taking into adjustments amounts that were previously deducted in the quota), but the tax itself has not recovered beyond 63, either. 8% what it was in 2007 (Graph 3.1). Details of the transition from benefits to base can be found in Table 8.5. There it can be seen that in the last four years the difference between profits before taxes and the tax base (without the adjustment of the bases to rates of 0 and 1%), has been growing and that, in the average of that period, About 90% of that difference corresponded to the adjustment of the double taxation exemption.

The effective rate based on Corporate Tax would have had a small increase in 2019 (0.4%; Table 3.1). Given the higher growth in profits, the effective rate would decrease by 1.5%. By eliminating the annual declaration from the tax, the impact on the rate of the very different behavior that occurred in payments and in the fee in 2018 and 2019 is clearly observed: Without a differential fee, the rate rose 4.3% in 2018 and fell 5.6% in 2019.

It is estimated that Corporate Tax accrued grew by 0.8% in 2019 (Table 3.1). The result of the annual declaration that will be presented in July remains to be known. Without it, the tax accrued falls by 5.2% due to the negative behavior of installment payments (almost 90% of the tax without the quota).

Indeed, installment payments decreased by 6.7% in 2019 (Table 3.2). The level of payments was not low, but it is compared to a year, 2018, with exceptional growth in them, an increase that was also highly concentrated in five consolidated groups. Thus, the payments of the consolidated groups decreased by 14.6%, while those of Large Companies not belonging to groups grew slightly (0.7%) and those of SMEs (which declare mostly according to the last annual installment and not according to their benefits) rose 10.9%. Graph 3.2 illustrates well the ups and downs in the rates of the last two years through the contribution of each of the groups of companies to the variation in payments.

The exceptional growth in 2018 was also based on the minimum payment (the five groups mentioned were taxed on the minimum payment linked to the accounting result and not on the tax base, which in some of them is zero or very low). Yes, as is logical, the payment conditions the result of the annual declaration, even more so when what increases the payments is this minimum payment, with no equivalent in the tax declaration. In 2018, the great weight of the minimum payment meant that refund requests increased to 11 billion (Table 3.3), a figure never reached before, and with it, the differential quota was the most negative in the historical series. Graphs 3.3 and 3.4 illustrate the relationship between payments, differential fee, minimum payment and refund requests.

revenue in 2019 decreased by 4.4% (Table 3.1). The difference with the growth of the accrued tax is due, as happens every year, to the presentation of the 2018 declaration in July 2019 (with a greater impact on this occasion due to the peculiarities of 2018 that have just been seen), But in addition, in 2019, extraordinary refunds were made for an amount greater than 1,200 million (Table 1.5), linked to sentences and the payment of the amounts requested by DTA (the deferred tax assets), which had nothing to do with the evolution in 2019. of the bases and the tax. Without them, collection would have increased by 0.4%.

As has been seen, installment payments decreased. In cash terms they fell 6.3% (Table 3.2). But this drop was offset by two elements. The first was the good results recorded in the 2018 annual declaration. Income from this concept grew by 10% (Table 3.1). The second was the lowest amount of the returns of that annual declaration made in 2019 (Table 3.3). It must be remembered that the returns requested in 2019, corresponding to the 2018 financial year, have been paid mainly in 2020, so that the returns made in 2019 include a large part of the 2017 campaign (requested in 2018 and paid, mainly, at the beginning of 2019) and the first returns made in fiscal year 2018; In both cases they decreased, although the latter decreased significantly more.