Wealth Tax (OZ)

Direct Taxes

Wealth Tax (OZ) (2022 Campaign)

Replaces the previous Tax on Wealth and Large Fortunes (AFHZ) that was in force until the 2017 campaign.

There has been an obligation to file a Wealth Tax return since 2018. Between 2013 and 2018, the Tax on Wealth and Large Fortunes was in force, which was repealed when the new Provincial Law 2/2018 of June 11 on Wealth Tax came into force on June 20, 2018.

The Wealth Tax was also in force in the years prior to 2013.

This tax is a direct, personal tax levied on net assets. On December 31 every year, this tax shall be due on and affect the assets owned by individuals at that date. This tax is collected by Gipuzkoa Provincial Council.

What is this tax levied on?

This tax is a direct, personal tax levied on net assets. On December 31 every year, this tax shall be due on and affect the assets owned by individuals at that date. This tax is collected by Gipuzkoa Provincial Council.

Who is required to declare this tax?

Residents in Gipuzkoa who are in the following circumstances are required to sign up to and declare this tax:

• When the net tax liability, calculated in accordance with the regulatory rules governing the tax, is positive (to be paid in).
• When the value of his or her goods and rights, including those exempt from tax, and determined in accordance with the regulatory rules of the tax are greater than 3 million euro.

When they reside outside the territory of Gipuzkoa but the goods are in Gipuzkoa, there is a 'real obligation' (tax liability by virtue of property, assets, etc. maintained in the tax jurisdiction) to declare the tax and it will be applied as follows.

How is the amount payable calculated?

Goods:

1. Tax Base: The taxpayer must declare all goods and rights of an economic content owned by him/her deducting the personal debts and obligations for which he/she is liable. The persons listed in the table are exempt from the charging of this tax: Goods and rights exempt from taxation.
2. Abatements in the base: €700,000
3. Net Tax Base: Calculated by subtracting the corresponding abatements from the tax base.
4. Tariff or Rate: Percentage to be applied to the net tax base. To determine the percentage to be applied, see Net tax base rate
5. Liability: Calculated by applying the corresponding tax rate to the net tax base.
6. Deductions: The lesser of the following two quantities:

• The amount paid abroad by reason of a charge of an analogous nature to this tax.
• The result of applying the average rate of this tax to the portion of the net tax base taxed abroad.

7. Amount payable:  Calculated by subtracting the corresponding deductions and allowances from the tax liability.

Example

Xabier, a 62-year-old salesman resident in Zumaia, has assets worth €4,000,000 including his usual home and the retail premises where he works. The former is valued at 500,000€ and the latter at €650,000. He also has to meet a debt of €100,000 to pay another property he owns.

1. Total assets: 4,000,000€
2. Exempt assets: 650,000€ (retail premises where he works)
3. Tax base: Because the value €3,350,000 is greater than €3,000,000, Xabier has a personal obligation to declare this.
4. We subtract his debts: 3,350,000 - 100,000 = €3,250,000
5. For his usual home we subtract a maximum amount of €300,000: 3,250,000 - 300,000 = 2,950,000€
6. Abatements in the tax base: €700,000 abatement.
7. Net tax base: 2,950,000 - 700,000 = €2,250,000€.
8. Rate: to calculate the rate, go to the €1,600,000 row. The amount to be paid on this is 10.200€. The rest (2,250,000€ - 1,600,000€ = 650,000€) is taxed at 1.30%, which is 8.450€ (650,000€ x 1.30%)
9. Total tax liability = 10,200 + 8,450 = €18,650€
10. Deductions: In this case there are no deductions.
11. Amount payable: 18,650€

Time to get working!