The Spanish Cabinet on June 20, 2014, approved the downsizing the corporate and individual income tax rates to encourage investment and employment.
Under the revised plans, the corporate tax rate will fall from 30% to 28% in 2015 and to 25 percent in 2016. The personal income tax rate for income up to EUR 12,450 will be reduced to 20% from 2015 and to 19 % from 2016. The number of tax ceiling will decline from seven to five with the lower and upper rates of 24.75% and 52 % failing to 20% and 47% in 2015, and to 19% and 45% in 2016.
The Spanish government takes this reforms which are in line with recommendations from the European Commission and IMF that the country should cut corporate and individual income tax rates. However, Government rejected recommendations from both bodies that the country should increase the headline VAT tax rate.
