Accrued taxes and tax revenues

taxes accrued increased by 14.9% in 2021 ( Table 1.4 ). In the case of the four main groups of taxes (Graph 1.22 and Table 1.3 ) the increase was slightly lower, at 14.7%. The difference between both measures is not great because, although the total includes the Tax on Insurance Premiums (with a rate increase in 2021) and the new taxes (the Tax on Financial Transactions and the Tax on Certain Digital Services), they also There is environmental taxation with a sharp decrease due to the temporary suppression of the Tax on the Value of Electrical Energy Production. In both cases, the 2021 figure is higher than that of 2019 (5.1% and 5.2%, respectively) and similar to the 15.1% growth recorded in tax revenues. In terms of Graph 1.22, the latter means that the change from accrual to cash at the aggregate level was practically zero.

In this sense, unlike what happened in 2020, in 2021 the regulatory and management changes ( Table 1.5 ) reduced income and not significantly. In terms of cash collection, its effect was estimated at a loss compared to the previous year of 501 million, just three tenths of the year's growth.

The measures that influenced 2021 income were very diverse. They can be grouped into four different blocks: the group related to the measures that were implemented throughout 2020 to combat, in different ways, the effects of COVID; a second block would comprise the regulatory changes included in the PGE-2021; a third set of measures would be those approved in order to alleviate the impact of the rise in electricity prices; and a last group that would collect extraordinary income and returns.

Before going into the details of the amounts, it is necessary to clarify that the figures are calculated for cash purposes and with the aim of correcting all those 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 was generated and the moment of income. A clear example is that of the Tax on the Value of Electrical Energy Production, eliminated in two quarters in accrual, although only one of them affected the 2021 collection. But it can also be said about the VAT reduction on electricity, valid for just over six months, but only four of them with effects at the cash register. And it is more evident in those measures that are implemented for the most part in the annual tax return (such as increases in rates for high incomes in Personal Income Tax or the limitation on the exemption of foreign income in the Corporate Tax). Regarding the second aspect, the influence on the variation rate, it is necessary to take into account not only the measures that begin in 2021, but also those that, being from 2020, alter the comparison with 2021. This way of proceeding particularly affects the first and fourth groups indicated above.

The measures that had the greatest impact in 2021 were those related to the price of electricity. In total, the reduction in income that these measures entailed was 1,605 million. The first measures were approved at the end of June and involved a reduction in the VAT rate (from 21% to 10%), applicable to electricity consumption in contracts whose contracted power was less than 10 kWh (basically domestic consumption), and the elimination of the third quarter of the Tax on the Value of Electrical Energy Production. Both measures meant a loss of income valued at 1,269 million (509 million from VAT for the June-October period, and 760 million from the Tax on the Value of Electrical Energy Production for the third quarter). Subsequently, in mid-September, the measures were expanded by adding a reduction in the rate (from 5.11% to 0.5%) in the Special Tax on Electricity and extending the suppression of the Tax on the Value of Energy Production Electricity to the fourth quarter (this last measure is no longer effective in 2021 since that quarter would have been entered in February 2022). The impact of the rate reduction in the Special Tax on Electricity is estimated at 336 million for consumption between September 15 and the last day of November, which is the period accounted for in 2021 income.

The second block of impacts by quantitative importance was that of the measures approved in the PGE-2021, which meant an increase in collection of 1,462 million. Three groups could be distinguished. The first is the one that has to do with rate increases and includes three measures: the increase in the rate in the general personal income tax base aimed at the highest incomes (with an impact of 131 million in withholdings from work); the change to the general rate of VAT on sugary drinks (314 million for the first ten months of validity); and the increase of two points (from 6% to 8%) in the rate of Insurance Premium Tax (476 million for the January-November period). As can be seen, the effect on 2021 income was less than the impact on accruals, which would also include the part of the increases carried over to 2022. This divergence is greater especially in the case of the increase in personal income tax for high incomes because the full effect (on the general basis plus the part of the savings base) will be completed when submitting the settlement for the 2021 financial year in June 2022. At that time, in addition, the impact of the modification on the limits of the reduction for the amounts invested in pension plans will be seen.

The second group within the PGE-2021 measures would be constituted by the two new taxes: the Tax on Financial Transactions and the Tax on Certain Digital Services. Both figures came into force at the beginning of the year, but with the obligation to deposit the amounts accrued since January 1. The impact on 2021 collection was 462 million (296 from the January-November period in the first case and 166 from the first three quarters in the second).

Thirdly, a measure that was also included in the PGE-2021 is the limitation to 95% of the exemption of income from participation in profits or the transfer of the same in the Corporate Tax for companies whose turnover exceeds 40 million euros. In 2021, the measure was applied to installment payments and it is estimated that it led to an increase in income of 79 million. The impact was small because the majority of affected companies were taxed in 2021 through the minimum payment that depends on profits and not on the tax base, which is modified by the rule. In fact, it is estimated that the base raised by the measure was more than 1,650 million and less than 15% of them corresponded to companies that paid taxes according to the base. The effect of the measure will be seen when the year is settled in the annual declaration, which will mostly be presented in July of this year.

The impacts derived from extraordinary income and refunds subtracted 824 million from tax income. This is a very heterogeneous group that includes both refunds actually made in 2021 (473 million for single provincial VAT records and 94 million for rulings in the Non-Resident Income Tax), as well as the differential impact caused by some measures that are They carry over from the past (maternity benefits, interest as a result of the ruling of unconstitutionality of RDL 2/2016 of installment payments, or for the income from the Corporate Tax records that occurred in 2020).

In last place would be all the measures linked to COVID implemented in 2020 and that 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). It was about facilitating the payment of tax obligations, by deferring it. This reduced collection in 2020 (due to amounts not received before the end of the year) and therefore in 2021 they had a positive impact. Secondly, there are measures to support SMEs, measures that took various forms (in particular: changes in the method of payment in installments, elimination of days in a state of alarm in the calculation of the modules and increase in the general reduction from 5% to 20/35% in the objective estimate of income). The changes had a negative effect on the VAT of the simplified regime and on the installment payments of personal income tax in 2020 and in the first payment of 2021, although the greatest impact was observed when applying the new general reduction in the annual personal income tax declaration (-195 million, including the remaining impact of the elimination of days in a state of alarm). And a third element to highlight within this group of measures were the rate reductions on products related to COVID (masks, vaccines, PCR,...). In this case the impact is less than one might think when calculated in differential terms with respect to the previous year in which some of the measures were already in force.

Analyzing the evolution of accrued taxes and income by figures, in Personal Income Tax the accrued tax grew by 9.2% in 2021, 9% if measured with respect to 2019 ( Table 1.3 ). As has been seen, the growth of the base (household income) explains almost six points of this increase and the rest comes from the higher average effective rate.

Withholdings on income from work and economic activities grew by 7.1%, 6.7% if only those from work are considered ( Table 2.3 ). In the latter case, the mass of remuneration (mainly salaries, pensions and unemployment benefits, including ERTE transfers) increased less, by 4.3%. The rest was contributed by the increase in the effective rate as a result of the increase in the pension rate (due, above all, to the entry of pensioners with a higher average pension 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 average withholding practically equal to zero. Within salaries, the growth of withholdings was greater 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 wage bill. in SMEs where the average rate is lower. In the public sector, salary withholdings grew by 5.8%, two points less than in 2020, with a very similar increase in the total salary (5.1% in 2021, 5.2% in 2020). In pensions, withholdings grew by 7.2%, below the 8.8% in 2020. The moderation observed in this part of the withholdings is a consequence of the irregular behavior that private pensions had in 2019 and 2020 (sharp fall in the first of these years and exceptional increase in the second). If only public pensions are considered, the growth in withholdings in 2021 is higher than that observed in 2020 (7.2% compared to 6.4% the previous year) due, above all, to the increase in the pension mass . Regarding withholdings on capital income, in 2021 they grew by 7.4%, but still remained below the levels reached in 2019 and even in 2018 ( Table 2.1 ). In the withholdings on capital income, given that there was no change in the rates (the increase in rates based on savings for high incomes will be specified in the annual declaration), the evolution is the same as that of the income: a drop of 2.2% in 2021 that adds to the 20.5% drop in 2020. Compared to 2019, these withholdings are 22.3% below those of that year. For its part, withholdings for leases, mainly for premises, rose by 5%, but this growth is insufficient to recover pre-pandemic levels (in 2021 the withholdings accrued were still 10.1% lower than in 2019). . Unlike the previous ones, withholdings derived from capital gains from investment funds grew again in 2021 and also with an unusual intensity (80%, in 2020 they had grown 12.3%). Since these withholdings have been in force, only in four years (1999, 2000, 2007 and 2008) have levels been recorded higher than those of 2021. Finally, installment payments from personal companies increased by 25.6%, a rate conditioned by the comparison with a 2020 affected by the different measures adopted to alleviate the effects of the pandemic among companies using the objective estimation modality. However, if compared to 2019, payments in 2021 were 10% higher than that year, which gives an idea of the intensity of the recovery of SMEs, especially in the last part of the year.

Personal income tax income grew by 7.5% to reach 94,546 million. It is a smaller increase than that observed in income as a whole, but it must be remembered that in 2020 personal income tax increased, in contrast to the general drop in other taxes, thanks to the cushion provided by public income (salaries of the AA.PP., pensions, transfers linked to ERTE and aid to the self-employed). In fact, if the comparison is made with 2019, it is concluded that this figure is the one that contributes the most to growth. Withholdings for income from work and economic activities, which are the main component of the tax, grew by 6.1%. The 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), although in the public sector the increase was almost the same as in the previous year and in the private sector it represented a recovery after the fall of 2020 that also allowed it to exceed the income recorded in 2019 by about 5%. The growth in SMEs stood out especially (14.7%; 5.4% compared to 2019). In the same sense, the fractional payments of personal companies stood out (17.4% and 5.7% more than in 2019). In capital income withholdings, the most outstanding thing was the exceptional increase in those derived from gains in investment funds (86.2%, more than doubling those in 2019); Both withholdings for leases and movable capital continued well below those recorded two years earlier. Finally, the annual declaration also contributed to growth due to the lower amount of refunds made as they came, for the most part, from the settlement of income for the 2020 financial year.

The Corporate Tax accrued grew by 31.8% in 2021 ( Table 3.1 ). The increase was based on the growth of installment payments, which increased by 50.4%, thanks to the good performance of the bases and the greater contribution of the minimum payment, which depends directly on profits and not on the taxable base ( Table 3.2 ). The greatest growth occurred in the payments of the consolidated groups (in which this minimum payment is more relevant), which almost doubled those of 2020 (81.5% without the extraordinary income derived from the merger of companies and the sale of assets that were produced in 2021). Payments from Large Companies not belonging to groups grew by 22.3%, while in SMEs the increase was 9.6%, with a logical divergence between those that paid taxes according to the profits of the year (39.4%). and those who did so according to their last annual fee (0.7%).

Income from Corporate Tax in 2021 amounted to 26,627 million, which means that it grew by 67.9%, a very high rate as was the drop in 2020 (-33.2%). The reasons for both were the same. On the one hand, in 2020 most of the decrease was due to the drop in installment payments (-27.1%) due to the stoppage of activity due to the pandemic; In 2021, with the relative normalization of activity, the opposite happened (+53.7%), with the addition of extraordinary operations carried out by some tax groups (although without them payments would continue to be 3.1% above 2019). On the other hand, the refunds made in 2020 reached a very high amount because the refunds requested for the 2018 financial year had been the same. This was not repeated in fiscal year 2019, which allowed the returns made in 2021 to be around 2.9 billion lower than the previous year. Compared to 2019, tax revenue in 2021 was 12.2% higher than two years earlier.

The VAT accrued in the period grew by 19.2% (+3% if compared to 2019; Table 4.1 ) thanks to the positive evolution of subject spending (the different regulatory measures were not, together, sufficient intensity to significantly change the rate). In the final part of the year, the recovery of gross VAT intensified due to the rise in prices that combined with the improvement in activity experienced throughout the year. The year ended with an increase of 17.8%, exceeding 2019 levels by 5% ( Table 4.2 ). The improvement was greater in the quarterly statements (18.6%), which include the sectors that were most affected by the limitations on activity. For their part, refund requests increased by 14.4% (13.7% monthly and 17% annually) due to the growth in exports (20.6% compared to 2020 and 7.6% compared to 2019). ) and due to the increase in costs, especially energy costs, in the latter part of the year.

VAT revenues rose to 72,498 million ( Table 4.2 ), a growth of 14.5% that offset the 11.5% drop last year, so that the Collection in 2021 was 1.3% higher than in 2019. The increase would have been greater if it had not been for the regulatory and management measures that, in total, represented a loss of almost 600 million (among them, the reduction in the rate on domestic electricity consumption, in force since the last days of June , subtracted just over 500 million). The recovery in spending translated into an increase in gross income of 11.9% (1.4% more than two years before), income that grew with special intensity, as in other figures, in SMEs (16. 4%, 2.3% over 2019). In all cases the figures are lower than those of the accrual because in 2021 the cash was affected by transferring income from the last part of the year (the one with the greatest growth) to 2022.

Special Taxes accrued increased by 7.1% in 2021, still far (-7.1%) from 2019 levels ( Table 5.1 ). The Tax on Hydrocarbons grew by 13.6%, almost two points above consumption, due to the increase in the effective rate derived from greater use of products taxed at higher rates. In 2020 the opposite had happened (consumption of subsidized diesel, which has a lower rate, grew slightly compared to the drop in gasoline and automotive diesel; 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 diesel. The beginning of the year was not good due to the still existence of limitations on mobility, but as these were being lifted, it was the strong price increases that hindered the recovery of the tax. In the Tax on Tobacco Products, the accrued collection fell by 0.8% (-0.8% in cigarettes and -0.5% in other products; Table 5.6 ). The fall was due to the decrease in the average price, although in the final months of the year the main brands raised their prices. Consumption, for its part, remained practically stable (0.4% of total consumption; 0.2% for packs and 0.7% for other products). Compared to 2019, the drop is estimated at 5%. The Electricity Tax fell by 20% ( Table 5.7 ), as a result of the drastic decrease in the rate (from 5.11% to 0.5%) that came into effect in mid- September. Both consumption and, above all, prices increased in 2021, pushing the liquidable base to a growth of 20.1%. The Tax on Alcohol and Derived Beverages grew by 33.2% ( Table 5.2 ), in line with the growth in consumption and in response to the low levels of 2020. Even so, they could not recover the levels of 2019 (-4.8%), reflecting the still weak situation in 2021 in the hotel and restaurant industry. Something similar occurs in the Beer Tax, whose increase is estimated at 8.7% (-2.2% compared to 2019; Table 5.3 ). The Coal Tax, which has become residual, decreased by 9.4%.

Collection from Special Taxes stood at 19,729 million, 5% above the 2020 figures, but still 1,651 million (7.7%) less than in 2019 ( Table 5.1 ). Its growth is lower than that of the accrued tax due, as mentioned in the VAT, to the displacement of the last accruals from 2021 to the 2022 cash. This is especially relevant in the Tax on Hydrocarbons (11.3%, more than two points below the accrual) and in taxes on alcohol (7% in cash compared to 24.7% of the 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 section of the year.

In 2021, income from figures other than the main ones totaled 9,985 million, 23.4% more than in 2020. The increase allows us to recover the loss that occurred the previous year 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 downward. In 2021, the regulatory measures that affected this income were three: the temporary suppression in the third and fourth quarters of the Tax on the Value of Electrical Energy Production (-760 million for the third quarter only; the fourth should have been entered in 2022), the increase in the rate (from 6% to 8%) in the Tax on Insurance Premiums (476 million), and the introduction of two new tax figures (the Tax on Financial Transactions and the Tax on Certain Digital Services, with revenues of 296 and 166 million, respectively). Together, the measures contributed an additional 178 million, 2.2 points of the increase observed in this group of taxes.

Going into the detail by figures, all of them showed growth compared to 2020, but, if analyzed in comparison with 2019, the situation was not so positive. This is the case of Non-Resident Income Tax ( Table 6.1 ) whose income in 2021 grew by 20.9%, but continued below 22.9% of the 2019 figure. The unfavorable evolution of movable capital income is what mainly determines the progress of this tax. With these results, both the Insurance Premium Tax ( Table 6.4 ) and the have gained importance within these other figures. Taxes on Foreign Traffic ( Table 6.3 ). The first was favored by the increase in the rate, which increased collection by 33%, 2.2% if the impact of the increase is subtracted. This growth would be, compared to the increases experienced before 2020, relatively low. Regarding Foreign Traffic Taxes, their income grew by 17.6% and remained 1.5% below 2019, although slightly above the average level registered between 2017 and 2019.

The other set of figures with a relevant weight in this group of taxes is the one formed by the environmental taxes ( Table 6.2 ) which includes taxation environmental of chapter I and the Tax on Fluorinated Gases. Environmental taxation decreased by 3% due, above all, to the temporary elimination of the Tax on the Value of Electrical Energy Production in the second half of the year (although in 2021 the elimination only affected the third quarter). The drop in this tax for the year as a whole was not large (-3.4%) because it started from a low level (1,146 million when normal income is usually around 1,500 million) due to the decrease in the market price in 2020. wholesale, the complete opposite of 2021 in which prices skyrocketed (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 revenues have been reduced. Except for the year of its implementation, which was not complete, the 2021 figure is the lowest in the historical series.

Chapter III income increased by 16.7% in 2021 ( Table 1.6 ), taxes by 15.2% and taxes by 17.7% % other income. The final collection was below 2019, but that year the income was especially high due to an abnormally high figure for the Canon for the use of continental waters for the production of electrical energy. The 2021 data is in the order of magnitude of 2017 and 2018. The same is seen in the rates ( Table 6.6 ), adding that some still in 2021 did not recover a level that could be considered normal (DNI and passport issuance rate and consular fees ).