Accrued taxes and tax revenues

Accrued taxes grew by 8.7% in 2023 ( Table 1.4 ) thanks to the increase in bases by 7.6% and an increase in the implicit average rate of 1.4%. In the four main figures the increase was 9.2% (Graph 1.26 and Table 1.3 ). Without the estimated differential contributions of Personal Income Tax and Corporations, accrued taxes grew by 7%.

Tax revenues grew less than taxes accrued, 6.4%. The main reason for this discrepancy is due to the fact that the taxes accrued include the contributions accrued in fiscal year 2023, which are estimated to be more positive than those associated with the previous fiscal year and which have been mostly entered into the 2023 cash flow.

As in previous years, the important role played by regulatory and management changes must be taken into account when analyzing the evolution of income. In 2023 these changes subtracted 3,342 million from income in cash terms. Details of the measures taken into account can be found in Table 1.5 . The estimated impact assumes that, without these measures, income would have grown by 7.8%, a rate similar to the growth experienced by the bases.

By figures, the greatest impact occurred in Personal Income Tax with a cost of 3,841 million. Almost everything is concentrated in two measures. The first is the increase in the reduction for work income, which meant a loss of 1,726 million in withholdings for the year. The effect was seen, above all, in SMEs and in pensions, groups where low incomes who are the beneficiaries of the measure have a greater presence. However, the influence of the measure was also detected in Large Companies, something that, on other occasions, with similar changes, had not occurred. The second is the group of various measures that the CC approved. AA. in the part of Personal Income Tax over which they have powers and which were mostly aimed at compensating for the effects of inflation. Their character was very different in the different territories, although they basically consisted of the elevation of family minimums, the partial deflation of the rate and the approval of new deductions or the expansion of existing ones. Every year the CC. AA. They exercise these powers, but never with an impact as pronounced as that which occurred in 2023. The negative impact on net income was valued at 1,677 million.

The rest of the measures have a very different origin. Those that were included in the PGE -2023 (improvement of the maternity deduction and measures to reduce the tax on personal entrepreneurs) meant a loss of 215 million, while those that came from Previous regulations (modification of the limits on contributions to pension plans and the deduction in rehabilitation works for energy efficiency) reduced income by 30 million. The changes, approved already at the start of the campaign, also took effect in the annual declaration to exceptionally reduce the yields on which farmers are taxed in an objective estimate. Finally, the modification of the regulation of deferrals in order to facilitate them meant a deferral of income in the amount of 33 million and measures from other years with consequences even in 2023 of greater collection of 6 million.

VAT was, in relation to income, the figure most affected by the regulatory changes. The impact is estimated at 3,097 million, which means 3.7% of the collection that occurred in 2022. Of them, 2,452 million were the result of the reduction in rates on energy, basic food and feminine hygiene products and contraceptives. The highest cost (1,703 million) occurred with the reduction in rates, since January 1, in food (to 0% in products that were taxed at the super-reduced rate of 4% and from 10% to 5% in oils and pastas ). In energy (electricity and gas) the 728 million impact refers to the differential effect with respect to the situation in 2022. This happens in all the measures evaluated in Table 1.5 , although it is important to note this at this point because the measures were already in force in previous years. In electricity, the loss of income is being measured as the 5% rate has been in force throughout 2023 compared to 2022 in which that rate was only in force for half a year, the other half year the rate was 10 %. In the case of gas, the year 2023 is compared with the rate reduction throughout the year compared to the three months of 2022 in which the measure was present. This also applies to the Electricity Tax and the Tax on the Value of Electrical Energy Production. In these two taxes, the 2021 and 2022 measures were extended under the same conditions to 2023 and, therefore, no cost appears in Table 1.5. Other measures also implied a significant reduction in VAT collection: The change in deferrals meant a shift of income amounting to 285 million to 2024 and some extraordinary returns caused 421 million to be lost.

In Corporate Tax the sign of the impact was positive (2,645 million). Nearly 1,000 million came from the different amount of extraordinary returns in 2022 and 2023; In 2022, returns of almost 2,300 were made (for sentences and DTA ) and in 2023 only 1,300 million were returned (for DTA ).

Regarding regulatory measures themselves, in 2023 the minimum rate of 15%, approved in the PGE -2022, began to operate in the annual declaration, for groups and for companies with a amount of turnover equal to or greater than 20 million euros, and, with effect only in 2023, the tax base of the fractional payments of the groups was calculated by adding the positive bases and 50% of the negative bases of the companies belonging to those groups. The first increased collection by 596 million, while the second increased it by 1,098 million. Regarding the latter, it should be noted that its effect on the base was much greater than that reflected in the payments. The measure represented a positive adjustment of more than 11,500 million, although only 6,000 translated into a larger tax base and, of them, just over 3,800 were transformed into a higher payment. These differences are produced by the existence of three types of groups: those that had a negative basis even with the adjustment; those who paid based on their basis, but without the adjustment would have had a negative basis; and those who, despite the adjustment, continued to earn the minimum payment and in which, consequently, the adjustment had no impact on the payment.

Of the rest of the measures, it is worth highlighting the two taxes that were introduced in 2023: the Tax on Non-Reusable Plastic Packaging (591 million) and the temporary Solidarity Tax of Great Fortunes (623 million). Furthermore, in 2023 the Canon for the use of continental waters for the production of electrical energy was recovered (81 million), which was not in force in 2022 after a ruling that annulled its previous configuration. The extraordinary refunds corresponding to Non-Resident Income Tax (more than 450 million) also had a significant impact, although it was partially offset by the existence of other extraordinary movements in 2022. Finally, a small positive impact is computed in the Tax on Financial Transactions and in the Tax on Certain Digital Services derived from the fact that in December 2022 the adjustments with the provincial territories were regularized for two years, while the adjustment in 2023 It corresponded only to one exercise.

Moving on to analyze the behavior of accrued taxes and income by figures, the personal income tax accrued grew by 12% in 2023, a result of the increase in income household gross income by 9% and the type by 2.8% ( Table 1.3 ). It is the third consecutive year with increases of around 12%, the result of the positive evolution of the bases and the increases in average rates derived mainly from the increase in average incomes and pensions.

The increase in withholdings from work and accrued economic activities reached 10.2%, due to the good performance of returns (7.1%) and the higher average rate (2.8%, Table 2.3 ). The most important component, earned wages, increased by 9.3%, driven by the positive evolution of the wage bill (7.6%), to which was added a moderate growth in the average rate (1.6% ), affected by the reduction in the rate for the lowest incomes. Withholdings associated with private salaries grew above those associated with the public sector, although the former showed a slowing profile, unlike the latter, in line with the evolution of the bases and given the similar advance of the rate in both sectors. The rate reduction had a greater impact on SMEs, so the slowdown was more intense in this group. Withholdings derived from public pensions grew by 17.6% (close to 19% if January is not taken into account, conditioned by the comparison with January 2022 with the last payment due to price deviation) thanks to the increase in the mass of pensions and the rate, which increased by 7.5%.

Withholdings on economic activities grew by 2.9% in 2023, losing about seven points compared to the 10% of the previous year, due to the negative evolution of sales by agricultural entrepreneurs, and the lower progress in the gross income of professionals ( Table 2.3) . Regarding installment payments, their increase is estimated at 8.1%, almost two points below the company's income, due to the impact of regulatory changes that included increases in expenses that are difficult to justify in the estimation modality. direct and the reduction of net performance in the objective estimate.

The growth of withholdings on capital income was high, 18.1%, although slightly lower than that achieved in 2022 (18.8%, Table 2.1 ). The main cause of these high rates has been the intense increase in withholdings on movable capital income subject to withholding, which after two years of strong growth (29.7% in 2023 and 28.4% in 2022), were at levels that have not been reached since 2013. It is worth highlighting the sharp rise in withholdings associated with interest on bank accounts and the good performance of dividends. For its part, withholdings for leases, mainly for premises, rose by 6.3%, some four points below the rate recorded the previous year, while withholdings derived from capital gains from investment funds fell by 39%. .1%, thus marking the minimum level of the series (231 million) since this figure was implemented.

income in personal income tax increased by 9.9%, almost six points less than in 2022 (15.8%) and more than two points below the rate reached by the accrued tax. The main reason for this divergence is that the latter include the estimate of the differential fee accrued corresponding to the year 2023, while the cash income includes the income and returns corresponding to the result of the annual declaration associated with the year 2022. Thus, although the positive quota increased by 7%, due to the growth in 2022 of income not completely subject to withholding or payment on account (real estate income, income from business activities and capital gains), the returns made increased by 14.6 %, exceeding by almost 1,700 million the amount returned the previous year and bringing the net result to a level lower by about 500 million than the previous year. The main cause of this evolution is found in the downward corrections of regional rates and the increase in family minimums and deductions also in the regional section of the tax, changes that represented a loss of income of 1,677 million ( Table 1.5 ). It must be remembered that withholdings are calculated with a general rate and that any change in the regional competition variables means a decrease in positive differential quotas or an increase in negative ones.

Withholdings for income from work and economic activities grew by 11% in 2023, with a greater increase in those from the AA.PP. (12.6%) than in those associated with the private sector (10.3%; Table 2.3). The cause of the greater growth of the former is found in the intense increase in withholdings linked to pensions, which have grown since March by close to 19% (in February they were compared to a month in 2022 that had the last update payment), an increase that It occurred even despite the effect of the rate cut on lower pensions. The impact of the rate reduction was also felt in SMEs whose income from withholdings grew by 7.7% (which would have been 10.2% without the reduction). In Large Companies the effect of the reduction was smaller, but it was enough to reduce the increase in income by one point (they grew by 11.7%). Finally, in withholdings derived from public salaries the increase was slightly more than 8%.

The second largest contribution to the growth of the tax was made up of withholdings on capital income, which increased by 26.7% thanks to the good performance of dividends and the recovery of income from withholdings on interest on bank accounts in the heat of the escalation of interest rates.

The contribution of installment payments from personal companies, which grew by 7.6% in 2023, was also positive. The increase would have been greater, up to 10% (in line with the estimated increase in the income of these companies), if the impact of the regulatory changes is discounted ( Table 1.5 ).

Income from withholdings on leases grew by 6.7%, showing a profile of gradual deceleration throughout the year. For its part, the income associated with withholdings on investment funds fell by 44.7%, reducing its amount to a level similar to that observed in the period between 2016 and 2020, after the good results observed in 2021 (the maximum of the series) and 2022.

Finally, it should be noted that the returns associated with the Allocation to the Catholic Church were approximately 230 million lower than those made a year before, positively affecting income. The reason for this difference is that in 2022 what used to be the usual pattern of the annual settlement of this Allocation was broken again. Said settlement was usually made in January for the outstanding balances of the declaration from two years earlier. However, the payment for 2021, which should have been paid in January 2023, was brought forward to December 2022.

The Corporate Tax accrued increased by 22.5% in 2023, 13.7% without the differential fee ( Table 3.1 ). The evolution of installment payments, the main component of the tax, explains this result. Payments grew by 15.2% (14.6% for consolidated groups, 17.8% for Large Companies not belonging to groups and 12.3% for SMEs ). Fractional payments already link three years of strong increases, driven in part in 2023 by the regulatory change that affected the calculation of the groups' tax bases.

income from the Corporate Tax increased by 9% ( Table 3.1 ), with the fractional payments and the income from the annual declaration being the two concepts that drove the advance. The former grew by 15.2%, in line with the benefits associated with the fractional payments of Large Companies and groups.

For its part, annual declaration income increased by 12.1%. Income from the settlement of fiscal year 2022 rose by 11.3%, which is explained by the growth in profits in 2022 of companies, not including collective investment institutions, with a peculiar evolution due to their activity and with little weight in income when taxed at 1% ( Table 3.1 ). To this we must add the effect of the new minimum rate of 15% applicable to groups and other companies with a turnover of more than 20 million, a measure that, when approved in the 2022 Budget, had its first effect in the year. 2022 whose declaration was submitted in 2023.

Finally, note the importance of the returns of the result of the annual declaration (including settlements) in 2023, which exceeded those already high in 2022 by 21% ( Table 3.3 ) . The reasons are two: the existence of a large volume of refund requests from the 2021 financial year, most of which were paid in 2023, and the advance in the schedule for making refunds for the 2022 campaign.

The VAT accrued in the period grew by 2.4%, growth lower than the subject final expenditure (7.1%), due to the reduction of the type derived from discounts on food, electricity and gas. The VAT accrued experienced a similar increase.

The VAT gross accrued ended the year with zero growth ( Table 4.2 ), after beginning it following the path of gradual deceleration that began in 2022, and despite of the moderate recovery observed in the fourth quarter of 2023. In Large Companies, gross VAT was reduced by 3.3%, while in SMEs an increase of 7.3% was observed. The divergence has to do with the way in which the rate reductions are carried out (these affect large companies in the first instance, but subsequently the impact is reduced by reducing the VAT borne by the SMEs ) and with the profile of the two types of companies (the first with greater weight in the energy sectors).

From another perspective, it should be noted that the VAT gross accrued with income key was reduced by 1.4%, while the accrual associated with deferrals, recognition of debt with request for compensation or inability to pay, increased by just over 1,700 million, due to the changes introduced in the regulation of deferrals.

Also in refund requests, a different behavior was observed between monthly requests (mainly linked to Large Companies and exports) which fell by 9.3%, and annual requests ( SMEs ) which increased by 10.1%. Overall, the total amount requested was reduced by 5.7%.

In cash terms, gross income also remained stable in 2023, although the slowdown in collection from self-assessments was greater than in accrual, especially in SMEs, a fact that has its explanation in the mechanics of the tax itself. On the contrary, the collection associated with deferrals increased by 11.9%, driven by the aforementioned increase in requested deferrals that were entered within the same year. It is estimated that the deferred income due to this change and whose collection will be carried over to 2024 amounts to 285 million ( Table 1.5 ).

For their part, refunds made for VAT decreased by 3.8%, which contrasts with the almost 6% decrease in refund requests. Part of the discrepancy is due to the fact that rate cuts have an immediate impact on gross income, but a delayed impact on refunds made.

The Special Taxes accrued increased by 3% in 2023 to 20,896 million euros ( Table 5.1 ). The Hydrocarbon Tax increased by 0.1%, despite the fall in aggregate consumption (-1.2%), due to the increase in the effective rate derived from greater use of products taxed at higher rates. In this regard, the consumption of gasoline and bioethanol increased by 5.9%, driven by the fall in prices, while that of the rest of the products decreased, especially the consumption of subsidized diesel fuel (-10%) which includes heating whose evolution is determined by temperatures. The Tax on Tobacco Products accrued increased by 0.7% ( Table 5.6 ), with the increase being greater in other products (4.1%), than in cigarettes (0. 3%). This increase in the accrued tax occurs driven by the increase in the average price before taxes and despite the fall in consumption of all tasks. The Electricity Tax was reduced by 20.1% ( Table 5.7 ), due to the decreasing trend in electricity consumption (-3.3%) and the significant drop in prices (- 18.4% before taxes), in a context in which the rate reduction was extended throughout 2023. The Tax on Alcohol and Derived Beverages was reduced by 5.1% in 2023 ( Table 5.2 ), in line with the drop in consumption, which could have been affected by the increase in price before taxes (7%). Something similar occurs in the Beer Tax, which remained at levels practically identical to those of 2022 ( Table 5.3 ). The Coal Tax resumed its downward trend, with a drop of 36.6% to 33 million, maintaining a residual role within the system. The Special Tax on Non-Reusable Plastic Packaging, which came into force in 2023, contributed 663 million.

Collection from Special Taxes reached 20,757 million, being 2.6% higher than the 2022 figures. Its growth was lower than the tax accrued, among other elements, because the 2023 box only reflects 11 months of the accrual of the Special Tax on Non-Reusable Plastic Packaging, which came into force in 2023. If this tax were not taken into account, both collection and the tax accrued would register a drop of 0.3%.

The collection of figures other than the main ones reached 11,929 million in 2023, exceeding the level of 2022 by 8.6%. Of the 946 million highest income, 623 correspond to the new Temporary Solidarity Tax on Large Fortunes ( Table 1.5 ). Discounting their amount, the increase in income associated with this group of taxes would be only 2.9%.

Income from the Non-Resident Income Tax ( Table 6.1 ) increased by 8.9%, exceeding 3,000 million for the first time of euros, thanks to the greater dynamism of capital income that explains the good performance of collection from withholdings and deposits on account. In gross terms, these income grew by 19.9%, but the existence of extraordinary returns reduced net income to 11.8%. The effect of the greater returns was also noted in the collection from the annual declaration, which was reduced by just over 40% despite the fact that gross income exceeded that of the previous year by 10.4%.

Another group of taxes that contributed positively to the increase in revenue was environmental taxes ( Table 6.2 ), although their amount is marginal compared to the level they had before the suspension of the Tax on the Value of Electrical Energy Production from mid-2021, within the framework of measures aimed at moderating the price of electricity. The growth was concentrated in the Tax on the Production of Spent Nuclear Fuel, although in comparison with a year 2022 with extraordinary returns. For the same reason, but in the opposite direction, extraordinary income in 2022, the collection of other taxes in Chapter I was reduced (basically the Property Transfer Tax by real obligation and in Ceuta and Melilla and the Inheritance and Donation Tax).

In Chapter II, revenue from Insurance Premium Tax increased (4.6%, Table 1.6 and Table 6.4 ). On the contrary, those of Taxes on Foreign Traffic fell by 5.6% ( Table 6.3 ) after the notable increase in the previous year (a 42.9%), driven by price increases. Collection from the Tax on Financial Transactions remained practically stable, while that derived from the Tax on Certain Digital Services contributed 25 million more than the year former. Table 1.5 of regulatory and management changes shows a small positive impact on these figures due to the fact that in 2022 the adjustments with the provincial territories were regularized for two years compared to the adjustment of only an exercise in 2023.

income from Chapter III decreased by 0.2% ( Table 1.6 and Table 6.6 ) with evolutions disparate between its main aggregates. Thus, tax collection increased by 13.9%, due to the recovery of the Canon for the use of continental waters for the production of electrical energy, which was not in force in 2022 after a ruling that annulled its previous configuration. Collection for the rest of the fees increased by 2.4%, thanks mainly to the positive evolution of consular fees. On the contrary, the radioelectric rate had a negative contribution. As for the rest of Chapter III, its income decreased by almost 9%, with a negative behavior of its main components (surcharges, interests and penalties).