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2019 fiscal year

4. The tax over the value added

In 2019, VAT revenue was 71,538 million, which represented a growth of 1.9%.

The evolution of collection was framed, as in other cases, in a general trend of deceleration throughout the year. The behavior of the gross VAT, which is a better approximation to what happens within the year than the total tax, illustrates this trend: In the first half of the year, gross income (without income from other periods) increased at rates greater than 4% and, however, the final growth of the year was 3.6%. To this we must add that returns increased significantly, above 8%, which limited the progress of collection.

final expenditure subject to VAT grew by 3.4%, more than a point and a half below the increase recorded in 2018 (Table 4.1). The downward evolution was a consequence of both the general slowdown of the economy and the moderate increase in prices in 2019 (Graph 4.1).

All spending components showed the same trend, although it was more pronounced in the sale of new homes. Household consumption spending increased by 3.3%, almost a point and a half below the growth recorded a year earlier. Although the slowdown in consumption growth was smaller than that observed in housing spending, the fact that this component represents more than 80% of total spending means that its impact on the slowdown is much greater. as can be seen in Graph 4.2. Spending on new housing fell more than seven points, from 12% in 2018 to 4.9%. After having registered an average growth of close to 12% in the last three years, in 2019 there was a notable slowdown that worsened in the second half of the year, in line with the decrease suffered by the transfers of new housing (Graph 4.3). The slowdown in public administration spending. was similar to that of households (3.6% compared to 4.9% in 2018), and like what happened the previous year, the cause was in the behavior of investment spending, which in 2019 fell to 1.9 % from 11.9% in 2018.

The effective rate of VAT remained practically unchanged for another year, at around 15.3%, without having suffered significant changes since the last increases in the general and reduced rates in September 2012 (Table 4.1 and Graph 4.5). The only regulatory change came from the lowering of the rate in cinemas, from general to reduced, which came into force in mid-2018 (after the approval of the Budget) and, therefore, with impact only during the first half of 2019 and very low amount (-37 million, Table 1.5).

The VAT accrued in the period grew by 3.4%, as did the subject expenditure, given the stability of the effective rate (Table 4.1). The net VAT accrued (which differs from the previous one because it includes the variation in the balance that companies leave to compensate from one year to the next) grew a little less, 3.3%.

For its part, the gross VAT accrued grew by 3.5% (Table 4.2), with a deceleration compared to the previous year of two and a half points, equal to that recorded by the VAT accrued in the period, with the VAT ratio remaining relatively constant. gross / VAT accrued, a situation in which it has remained since 2015, when the last relevant change occurred in the management of the tax (the settlement of Customs VAT through self-assessments).

Analyzing the evolution of gross VAT by its components, it is observed that both monthly declarations (Large Companies, groups, other operators covered by the monthly refund regime and import VAT), and quarterly declarations grew at similar rates in 2019: 3.5% the first and 3.7% the second. But the slowdown in the growth of gross VAT was more intense in the monthly declarations (one point more), becoming accentuated in both cases in the second half of the year (Graph 4.4).

Refund requests grew by 4.2% in 2019, almost three points less than the previous year. The entire increase was due to monthly refund requests (more related to exports), which increased considerably in the first quarter of the year, closing with a rate of 6.1%, a value similar to that of the previous year. However, annual applications (linked to the reduced rates at which smaller companies sell) fell by 2.3%, which represents a reduction of almost ten points compared to the increase in those requested a year earlier (Table 4.2).

Once the distortion caused by the entry into force of the SII was overcome, the evolution of gross income was similar to that of the tax accrued (it grew by 3.6%), but the notable growth in refunds made meant that the total income for VAT grew at a lower rate (1.9%).

The year 2019 was characterized by the increase in monthly VAT refunds: 10.3%, motivated both by the returns corresponding to the previous year (which grew by 14%) and those of the year itself (8.3%). In both cases, the progress was due to the higher amount of applications combined with a faster pace of completion than that achieved a year earlier. Annual returns made in 2019, however, grew at a slower rate (3.5% compared to 9.5% in 2018). It must be remembered that the majority of these returns correspond to applications for the 2018 financial year, whose submission occurred at the end of January 2019. Although the amount requested was higher than the previous year, the pace of completion was lower. Finally, returns due to regional adjustments also increased (4.8%), although with less intensity than in the previous three years (with an average increase close to 9%).

In cash terms, gross income grew by 3.6% in 2019, and, as in the tax accrued, the increase was somewhat higher in the quarterly declarations than in the monthly ones (4% and 3.3% respectively , Table 4.2), showing in both cases a pattern of deceleration throughout the year.