Spain has announced plans to significantly lower social security contributions for employers who recruit permanent members of staff. The Prime Minister has suggested that an upwards revision of the growth forecast for this year and next will enable the Government to lower employers’ contributions to a flat rate of EUR100 (USD137) a month for companies that create jobs. The favorable flat rate is to apply for the first two years, on condition that the new recruit is kept on the payroll system for a period of at least three years. The measure aims to address the issue of high unemployment in Spain. The Prime Minister stated that the move will lower social security contributions for employers by up to 75 percent.
The Spanish Government plans to raise the individual income tax (IRPF) threshold to EUR12,000 from 2015, and confirmed plans to increase family tax breaks. The tax reform is expected to benefit around 12 million taxpayers. Spain’s Confederation of Business Organizations (CEOE) welcomed plans to introduce a flat rate social security contribution, emphasizing that the measure will lower recruitment costs for businesses.
