Effective rates

It is estimated that the average effective rate on income and expenditure in 2021 was 15.3%, with an increase of 1.8% compared to 2020 (Table 1,3). The estimate is provisional until 2021 with the annual Personal Income Tax and Corporation Tax returns, which will be known for the most part between June and July. With the information available, the average rate recovered the upward trend that followed before 2020 (Chart 1,21) and reached the highest level that it had already in 2014, the year before the last major reform in indirect taxation. It should be recalled that the growing trend is a consequence, basically, of the continuous growth that occurs in the effective rate of household income. In 2021, this trend was also accentuated by the increase in the effective rate on the basis observed in Corporation Tax. Unlike what happened in 2020, there were some regulatory changes that affected rates in 2021 (among others, the rise of rates in the general terms and conditions of the savings on Personal Income Tax for the highest incomes, the limitation to the exemption of income from abroad in Corporation Tax, the rise of VAT rates for sweetened and sweetened beverages and the reduction of rates in VAT on domestic electricity consumption and the Special Electricity Tax), although its importance in the variation in effective rates was relatively low. Other effects were affected by the changes in the composition of the bases in 2020 (higher unemployment benefits, lower service costs at reduced VAT rates, etc.).

In Personal Income Tax, the effective rate rose to 13.2%, 3.2% more than in 2020, a year in which it had practically remained the same as in 2019 (Table 2,1). The increase was basically due to three elements: Regulatory changes with the rate increase in the general base and savings for the highest incomes (2 points in the state rate from 300,000 euros in the first case and 3 points from 200,000 euros in the second case) and the modification of the limits in the reductions linked to pension plans; The increase in the type of pension (due, above all, to the usual effect of sliding towards higher average pensions by new pensioners who enter the system); And the loss of importance in 2021 of unemployment benefits, with average rates almost zero, and which in 2020 had led to a drop in the effective rate. The rate increase caused by these elements was softened because the contribution in the incomes of the households of the salaries of SMEs that, with lower average rates, pushed down on the effective rate, unlike what had happened the previous year.

The effective rate on the taxable base in Corporation Tax was 2021% in 21.4, 4% higher than the estimated rate for 2020 (Table 3,1). If the rate is calculated on the profits, the result is almost the same as the previous year (9.15% compared to 9.17% in 2020). The variation in rates is an almost exclusive consequence of the different growth estimated for bases and rates in the different groups of companies. The only significant regulatory change with impact (the limitation to the exemptions from external income of article 21 of the law) slightly raised the rate in the group of companies concerned, although its importance in the whole is less significant.

In VAT, the effective rate was 15.3%, 0.1% lower than in 2020 and approximately the same as the average for the last six years (Tables 1,3 and 4,1). In 2021, there were significant changes in the tax, with the rate increase from 10% to 21% for sweetened and sweetened beverages , included in the 2021 Budgets, and the reduction from 21% to 10% of the applicable rate, basically to domestic consumption of electricity, in force since the end of June, which joined the measures inherited from RDL 15, 34 and 35 last year, which they they included in COVID products and vaccines and the super-reduced type of masks. 0 However, all these changes did not result in a variation in the aggregate rate. In addition, expenses were recovered with reduced rates (such as those for hospitality and catering), which were very affected by the limitations activity in 2020, and in the second part of the year there were strong increases in prices for some products that go to the general rate (such as fuels).

The average effective rate in Special Taxes, calculated as the proportion of the tax accrued with respect to the value of consumption, fell by 10.6%, falling to its lowest level since 2014. As noted in all reports, this type is included only for the purposes of completing the analysis of bases, rates and income, but it is not the type applied (in several figures the basis is made up of physical consumption and only in two-tobacco and electricity-the value is important). In addition, in the absence of regulatory modifications, this effective rate moves in the opposite direction to the prices of energy products, which are those that determine the value of consumption. In 2019 and 2020 these prices decreased, leading to a growth in the rate, and in 2021 they increased sharply and this led to a sharp drop in the rate.