Accrued taxes and tax revenues

Taxes accrued increased by 2021% in 14.9 (Table 1,4). In the case of the four main tax groups (Chart 1,22 and Table 1,3), the increase was slightly lower, of 14.7%. The difference between both options is not large because, although the total includes the Insurance Premium Tax (with a rise of rates in 2021) and new taxes (the Tax on Financial Transactions and the Tax on Certain Digital Services) are also tax environmental with a sharp drop due to the temporary suppression of the Value of Electricity Production Tax. In both cases, the figure for 2021 is higher than that of 2019 (5.1% and 5.2%, respectively) and similar to the growth of 15.1% that recorded the tax revenues. In terms of Chart 1,22, the latter means that the cash accrual step at aggregate level was practically zero.

In this regard, unlike in 2020, regulatory and management changes (Table 2021) decreased income and not significantly in 1,5. In terms of cash collection, its effect was estimated at a loss compared to the previous year of 501 million, barely three tenths of the year's growth.

The measures that influenced the 2021 income were of a very different nature. Can be grouped into four different blocks: The group related to the measures that were implemented throughout 2020 to combat the effects of COVID in different ways; A second block would include the regulatory changes included in PGE-2021; A third set of measures would be those approved in order to mitigate the impact of the rise in electricity prices; And a final group that would collect extraordinary income and refunds.

Before entering the details of the amounts, it must be clarified that the figures are calculated for the purposes of the cash desk and in order to correct all the elements that may distort the variation rate. The first aspect is important because some of the measures had a very different effect on accrual and cash due to the mere fact of the shift between the period in which the obligation is generated and the time of deposit. One clear example is the Tax on the Value of Electricity Production, which was abolished in two quarters in accrual, although only one of them affected the 2021 collection. But we can also say that the VAT reduction in electricity, which is in force for just over six months, but only four months, with cash bills. And it is more evident in those measures that are mostly implemented in the annual tax return (such as increases in rates to high income in Personal Income Tax or the limitation to exemption from external income in Corporation Tax). As for the second aspect, the influence on the rate of variation requires taking into account not only the measures that began in 2021, but also those that, being 2020, alter the comparison with 2021. This procedure particularly affects the first and fourth groups mentioned above.

The most significant measures in 2021 were those related to the price of electricity. In total, the reduction in income that led to these measures was 1,605 million. The first measures were approved at the end of June and resulted in a reduction in the VAT rate (from 21% to 10%), applicable to electricity consumption in contracts whose power of attorney was less than 10 kWh (basically domestic consumption), and the third quarter of the Tax on the Value of Electricity Production was abolished. Both options resulted in a loss of income valued at 1,269 million (509 million from VAT for the June-October period, and 760 for the third quarter of the Electricity Production Value Tax). Subsequently, in mid-September, the measures were extended by adding the rate reduction (from 5.11% to 0.5%) to the Tax special on Electricity and extending the elimination of the Value of Electricity Production Tax to the fourth quarter (this last measure is now no effect in 2021, given that this quarter had been paid in February 2022). The impact of the rate reduction on the Special Electricity Tax is 336 million euros for consumption between 15 September and the last day of November, which is the period recorded in the 2021 income.

The second block of impacts due to quantitative importance was that of the measures approved in the PGE-2021, which meant an increase in the collection of 1,462 million. Three groups should be distinguished. The first is that which has to do with rate increases and includes three measures: The increase in the general income tax base for the highest incomes (with an impact of 131 million on withholdings on work); The general rate of VAT on sugary drinks (314 million for the first ten months); And the rise of two points (from 6% to 8%) in the type of Insurance Premium Tax (476 million for the January-November period). As can be seen, the effect of the 2021 income was lower than the impact on accrual, which would also include the part of the increases transferred to 2022. This divergence is particularly greater in the case of the rise in Personal Income Tax to high incomes because the full effect (on the general basis plus the part of the savings base) will be completed when the 2021 liquidation is presented in June 2022. At that time, the impact of the modification on the limits of the reduction will also be seen for the amounts invested in pension plans.

The second group, within the measures of the PGE-2021, would be made up of the two new taxes: Financial Transaction Tax and the Tax on Certain Digital Services. Both figures entered into force already in the year, but with the obligation to pay the amounts accrued from 1 January. The impact on 2021's collection was 462 million (296 from the January-November period in the first case and 166 from the first three quarters in the second quarter).

Third, a measure that was also included in PGE-2021 is the limitation to 95% of the exemption from income from profit or loss investments or transfer of these investments in Corporation Tax for companies whose turnover exceeds 40 million euros. In 2021, the measure was applied to instalment payments and is estimated to have increased revenues by 79 million. The impact was small because most of the companies affected were taxed in 2021 through the minimum payment that depends on the profits and not on the taxable base that is the one modified by the standard. In fact, it is estimated that the base generated by the measure was more than 1,650 million and less than 15% of the same corresponded to companies that were taxed according to the basis. The effect of the measure will be seen when the year is settled in the annual tax return, which will mostly be presented in July of this year.

The impacts derived from extraordinary income and refunds reduced to tax revenues of 824 million. This is a very heterogeneous group that includes both refunds actually made in 2021 (473 million for one-off regional VAT records and 94 million for non-resident income tax rulings), such as the differential impact caused by some measures that are carried out by the past (maternity benefits, interest resulting from the unconstitutional ruling of RDL 2/2016 on instalment payments, or from the income of minutes in Corporation Tax, which took place in 2020).

Last of all the measures linked to COVID implemented in 2020 would have affected the comparison of income between 2021 and 2020 in different ways. In total, these measures amounted to €466 million. The most relevant are those related to the liquidity of companies that were in force in 2020 (also in the first quarter of 2021, but with a much smaller impact). The aim was to facilitate payment of tax obligations by deferred payment. This reduced the collection in 2020 (for amounts not paid before the end of the year) and therefore in 2021 they had a positive impact. Secondly, there are support measures for SMEs, which took several forms (in particular: Changes in the instalment payment method, elimination of days in state of alarm in the calculation of modules and increase in the general reduction from 5% to 20/35% in the objective estimate of the income). The changes had a negative effect on VAT of the simplified regime and on the instalment payments of 2020 Personal Income Tax and on the first payment of 2021, although the greatest impact was observed when the new general reduction was applied to the annual Personal Income Tax return (- 195 million, including the remaining impact of the elimination of the days in state of alarm). And a third element to highlight in this group of measures was the sale of rates in COVID related products (masks, vaccines, PCR, etc.). In this case, the impact is lower than what could be considered when calculating in differential terms compared to the previous year in which some of the measures were already in force.

Analysing the evolution of taxes accrued and income by figures, in Personal Income Tax the tax accrued grew by 2021% in 9.2, 9% if it is measured with respect to 2019 (Table 1,3). As we have seen, the growth of the base (household income) explains almost six points of this increase and the rest comes from the highest effective average rate.

Withholdings on work income and economic activities grew by 7.1%, 6.7% if only those of work are considered (Table 2,3). In the latter case, the mass of remuneration (mainly salaries, pensions and unemployment benefits, including transfers of ERTE) increased by less, 4.3%. The rest contributed to the rise in the cash rate as a result of the increase in the rate of pensions (due, above all, to the entry of pensioners with an average pension higher than those who were already receiving it the previous year) and the loss of weight of unemployment benefits , of an exceptionally high amount in 2020 and with an average withholding almost equal to zero. In wages, the growth in withholdings was higher in the private sector (7.1% compared to 2020, 4.4% compared to 2019), despite the decrease in the rate due to the recovery of the salary burden in SMEs where the average rate is lower. In the public sector, wage withholdings grew by 5.8%, two points less than in 2020, with a very similar increase in the mass of wages (5.1% in 2021, 5.2% in 2020). In pensions, withholdings grew by 7.2%, below 8.8% in 2020. The moderation observed in this part of the withholdings is due to the irregular performance of private pensions in 2019 and 2020 (sharp decline in the first of these years and exceptional increase in the second). If only public pensions are considered, the increase in withholdings in 2021 is higher than that seen in 2020 (7.2% compared to 6.4% in the previous year), due, above all, to the increase in the mass of pensions. With regard to withholdings on capital income, 2021% grew in 7.4, but still below the levels reached in 2019 and even in 2018 (Table 2,1). In withholdings on movable capital income, since there was no change in rates (the rise in rates on the basis of savings for high incomes will be specified in the annual tax return), the evolution is the same as that of the incomes: A drop of 2.2% in 2021, which is added to the drop of 20.5% in 2020. Compared to 2019, these withholdings are 22.3% below those of that year. For its part, the withholdings on leases, mainly from premises, increased by 5%, but this growth is insufficient to recover the levels prior to the pandemic (in 2021 the withholdings accrued were still 10.1% lower than those of 2019). Unlike the previous ones, the withholdings derived from capital gains from investment funds grew again in 2021 and also with unusual intensity (80%, 2020%). 12,3 Since these withholdings are in force, only four years (1999, 2000, 2007 and 2008) have recorded levels higher than those of 2021. Finally, the payments in instalments of personal companies increased by 25.6%, a rate conditional on the comparison with 2020 affected by the different measures taken to mitigate the effects of the pandemic among companies that are included in the objective estimate method. However, compared to 2019, payments in 2021 were 10% higher than those in that year, which gives an idea of the intensity of the recovery of SMEs, especially in the last stretch of the year.

Income from Personal Income Tax grew 7.5% to reach 94,546 million. This is a smaller increase than that observed in the total income, but it must be remembered that in 2020 the Personal Income Tax increased, in contrast with the generalised fall in other taxes, thanks to the buffer that led to public income (A.A.A.A. salaries pensions, transfers linked to ERTE and to the aid for self-employed workers). In fact, if the comparison is made with 2019, it is concluded that this figure is the one that most contributes to growth. Withholdings on income from work and economic activities, which are the main component of the tax, grew by 6.1%. Growth in the public sector (salaries and pensions) and in the private sector (Large Companies and SMEs) was similar (6.8% in the first case and 7% in the second case), although in the public sector the increase was almost the same as in the previous year and in the private sector it was a recovery after the fall of 2020, which allowed it to exceed the income recorded in 5 by nearly 2019%. Particularly noteworthy was growth in SMEs (14.7%; 5.4% Compared to 2019). In the same vein, the payments in instalments of personal companies stood out (17.4% and 5.7% more than in 2019). The most outstanding capital income withholdings were the exceptional increase in gains on investment funds (86.2%, more than doubling the gains in 2019); Both the withholdings for leases and movable capital continued well below those recorded two years earlier. Finally, the annual tax return also contributed to growth due to the lower amount of refunds made, mostly from the settlement of the 2020 income.

Corporation Tax accrued in 2021 grew by 31.8% (Table 3,1). The increase was based on the growth of instalment payments, which increased by 50.4%, thanks to the good performance of the bases and to the largest contribution of the minimum payment, which is directly based on profits and not on the taxable base (Table 3,2). The greater growth was in payments of the consolidated groups (in which that minimum payment is more relevant) that almost doubled those of 2020 (81.5% without the extraordinary income derived from the merger of companies and the sale of assets that took place in 2021). Payments of Large Companies not belonging to groups grew by 22.3%, while in SMEs the increase was 9.6%, with a logical divergence between those who were taxed according to the profits of the financial year (39.4%) and those who did so according to their last annual payment (0.7%).

Income from Corporation Tax in 2021 amounted to €, which means that they grew by 26,627%, a very high rate as was the drop in 67.9 (- 2020%). 33,2 The reasons for one and the other were the same. On the one hand, in 2020 the majority of the decrease was due to the drop in payments in instalments (- 27.1%) due to the cessation of activity due to the pandemic; In 2021, with the relative standardisation of the activity, the opposite happened (+ 53.7%), with the addition of extraordinary operations carried out by certain tax groups (although without them payments would remain 3.1% above 2019). On the other hand, refunds made in 2020 reached a very high amount because the refunds requested for 2018 had been. This was not repeated in 2019, which allowed refunds made in 2021 to be around 2,900 million less than in the previous year. Compared to 2019, the income from the tax in 2021 exceeded 12.2% at the age of two.

VAT accrued in the period grew by 19.2% (+ 3% if compared with 2019; Table 4,1) thanks to the positive evolution of the expenditure subject (the different regulatory measures did not, as a whole, have sufficient intensity to significantly change the rate). In the end of the year, the recovery of gross VAT intensified due to the rise in prices, which was combined with the improvement of the activity experienced throughout the year. The year ended with an increase of 17.8%, exceeding 5% in 2019 (Table 4,2). The improvement was higher in quarterly tax returns (18.6%), which included the sectors that were most affected by the limitations on activity. Meanwhile, the return requests increased by 14.4% (13.7% monthly and 17% annual) due to growth of exports (20.6% compared to 2020 and 7.6% compared to 2019) and due to the increase in costs, especially energy costs, in the last part of the year.

VAT revenues rose to €72,498 million (Table 4,2), a growth of 14.5% that offset the drop of 11.5% last year, so the revenue in 2021 was 1.3% higher than in 2019. The increase would have been greater than not due to the regulatory and management measures that, in total, resulted in a loss of almost 600 millions (including the reduction in the rate of domestic electricity consumption, which has been in force since the last few days of June, has fallen by over 500 million). The recovery of expenditure resulted in an increase in gross income of 11.9% (1.4% more than two years earlier), income that grew particularly intensely, as in other figures, in SMEs (16.4%, 2.3% over 2019). In all cases, the figures are lower than those of accrual because in 2021 the cash was damaged by the income of the last part of the year (which had the greatest growth) to 2022.

Accrued Special Taxes increased by 7.1% in 2021, still far (- 7.1%) from 2019 levels (Table 5,1). The Hydrocarbons Tax grew by 13.6%, almost two points above consumption, due to the increase in the effective rate resulting from a greater use of products taxed at higher rates. In 2020, the opposite had happened (the consumption of subsidised diesel, which has a lower rate, grew slightly compared to the drop in gasoline and diesel cars; Table 5,5). Despite the improvement, the tax accrued remained 5.8% lower than that achieved in 2019, with a more positive evolution in gasoline than in automotive oil. The beginning of the year was not good because there were still limitations on mobility, but according to these, the strong price increases weighed down the tax recovery. In the Tobacco Tax, the tax paid fell by 0.8% (- 0.8% in cigarettes and-0.5% in the rest of products; Table 5,6). The drop was due to the drop in average prices, although in the end months of the year the main brands increased their prices. Consumption, meanwhile, remained practically stable (0.4% of total consumption; 0.2% For cash packets and 0.7% for other products). The drop is 2019% compared to 5. The Electricity Tax fell by 20% (Table 5,7), due to the drastic drop in the rate (from 5.11% to 0.5%), which came into force in mid-September. Both consumption and, above all, prices increased in 2021, pushing the net tax base to a growth of 20.1%. The Tax on Alcohol and Alcoholic Beverages grew by 33.2% (Table 5,2), in line with the progress of consumption and in response to the low levels of 2020. Even so, they were unable to recover the levels of 2019 (- 4.8%), a reflection of the still weak situation in 2021 of the hospitality industry and the catering industry. Similar to the tax on beer, which is estimated to increase by 8.7% (- 2.2% compared to 2019; Table 5,3). The Coal Tax, which has become residual, decreased by 9.4%.

The Special Taxes collection stood at 19,729 million, 5% above the figures for 2020, but still 1,651 million (7.7%) less than in 2019 (Table 5,1). Its growth is lower than that of the tax accrued due, as mentioned in VAT, to the shift from the last 2021 accruals to the 2022 cash. This is particularly relevant in Hydrocarbons Tax (11.3%, more than two points below accrual) and in alcohol taxes (7% in cash versus 24.7% of accrual). In the Electricity Tax, however, the effect is the opposite (- 12.2% in cash and-20% in accrual) due to the reduction in the rate in the final tranche of the year.

In 2021, revenues from other figures other than the main figures totaled a total of 9,985 million, 23.4% more than in 2020. The increase allows the loss of the previous year to be recovered compared to 2019, although with a nuance: Both the 2021 and 2019 data are conditioned by regulatory measures, in the first case slightly upward and in the second almost 900 million below. In 2021, the regulatory measures that affected these revenues were three: Temporary deletion in the third and fourth quarters of the Electricity Production Value Tax (- €760 million for the third quarter only; The fourth should have been paid in 2022), the rate increase (from 6% to 8%) in the Income Tax as de Seguros (476 million), and the introduction of two new tax figures (the Tax on Financial Transactions and the Tax on Deafers) completed Digital Services, with income of € and €, respectively). 296 166 Overall, the measures contributed an additional 178 million, 2.2 points of the increase observed in this tax group.

In detail by figures, all of them showed growth compared to 2020, but if analysed compared to 2019, the situation was not so positive. This is the case of Income Tax for Non-Residents (Table 6,1) whose income in 2021 grew by 20.9%, but they continued to fall below 22.9% of the figure for 2019. The unfavorable evolution of movable capital income is those that mainly determine the progress of this tax. These results have gained importance within these other figures, both Insurance Premium Tax (Table 6,4) and Foreign Traffic Tax (Table 6,3). The first was favored by the increase in the rate, which led to the increase in the collection by 33%, 2.2% if the impact of the rise is subtracted. This growth would be relatively low compared to the increases that they experienced before 2020. As for Foreign Traffic Taxes, their revenues grew by 17.6% and remained 1.5% below 2019, although slightly above the average level that was recorded between 2017 and 2019.

The other set of figures with a significant weight in this tax group is that consisting of environmental taxes (Table 6,2), which includes the environmental taxation of Chapter I and the tax on Fluorinated Gases. Environmental taxation decreased by 3%, mainly due to the temporary elimination of the Value of Electricity Production Tax in the second half of the year (although in 2021 it only affected the suppression in the third quarter). The fall of this tax throughout the year was not large (- 3.4%) because it was at a low level ( 1,146 million when normal income usually amounts to around 1,500 million) due to the drop in price in the wholesale market in 2020, otherwise of 2021, when prices were shot (hence the impact of the elimination of a single quarter is estimated at 760 million). The tax on Fluorinated Gases also fell by 2.8%, and it is the fourth consecutive year in which revenue is reduced. Except for the year of its implementation, which was not complete, the figure for 2021 is the lowest in the historical series.

Chapter III income increased by 16.7% in 2021 (Table 1,6), 15.2% in fees and 17.7% in other income. The final collection was below 2019, but that year the revenue was particularly high due to an abnormally high figure of the Canon due to the use of continental waters for the production of electricity. The figure for 2021 is in the order of magnitude 2017 and 2018. This is also seen in fees (Table 6,6), adding that some still in 2021 did not recover a level that could be considered normal (National ID Card Issuance Rate and passports and Consular Fees).