The Government of the Community of Madrid, chaired by Isabel Díaz Ayuso, has filed an appeal this Wednesday before the Constitutional Court against the new solidarity tax on great fortunes promoted by the central Executive of Pedro Sánchez.

The decision, which includes the request that the tax be temporarily suspended, was already announced in October by the conservative leader, and adds a new clash between the two Administrations.

On the way to the municipal and regional elections in May, as well as the general elections at the end of the year, the two governments accumulate judicial confrontations in educational, economic, health or fiscal matters.

“It is a new tax that goes against savings and investment, and that will have negative effects for Madrid, which brings together three out of every four euros of foreign investment that comes to Spain, so it could lower the collection by 5,000 million euros ”, the spokesman for the Madrid executive, Enrique Ossorio, defended this Tuesday at a press conference organized after the weekly meeting of the governing council.

"To this we must add the investors who are not going to come due to the application of the new tax: between 1,200 and 1,600 million euros of foreign investment will stop arriving a year," added the regional vice president, raising the calculation of the negative impact of the new tax on Madrid accounts up to a minimum of 6,200 million.

The Community of Madrid has fully subsidized the wealth tax since 2008, one of the hallmarks of the fiscal policy of the different popular governments that have followed one another uninterruptedly in regional power since 1995. As the Executive of Pedro Sánchez has been accusing since 2019 to the Community to bet on

In order to attract large taxpayers from other regions, Díaz Ayuso's advisers now interpret the new tax as a way of harming the interests of the region and its wealthiest taxpayers.

The solidarity tax on large fortunes will affect large estates of more than three million euros.

The Minister of Finance, María Jesús Montero, expects that this new tax will collect a maximum of 1,500 million euros from 23,000 large taxpayers throughout 2023 and 2024.

Beyond the figures, the Díaz Ayuso government considers that Sánchez's has bypassed the legal system with the approval of the tax.

For this reason, he bases his appeal before the Constitutional Court on six aspects: invasion of autonomous powers;

breakdown of financial autonomy;

of the principle of equality, since he considers that the tax is only directed against Madrid and Andalusia (which subsidize 100% the tax on wealth);

of the procedure;

that harms the legal certainty of taxpayers;

and that it is not justified, because the state tax collection is breaking all records.

"The Community of Madrid continues with its policy of defending only a privileged minority at the cost of worsening the public services of the majority," the Minister of Finance, María Jesús Montero, reacted to the announcement.

"While the Government of Spain has taken measures to alleviate the economy of the social majority of the country, with the reduction of VAT on food or the reduction of personal income tax for middle incomes, the Executives of the PP govern and work for a minority", has followed her.

And he has complained: "The solidarity tax on large fortunes is fully constitutional and guarantees the legal certainty of taxpayers by not involving double taxation, since the fee to be paid for this tax can be deducted from the Wealth Tax fee ”.

Fight in the courts

That Madrid has decided to litigate against that decision has not taken anyone by surprise.

Díaz Ayuso has been announcing his intention to appeal against the tax since October 2022.

And, furthermore, there are multiple precedents in all fields, and especially in the economic sphere.

Thus, the Community has already won the lawsuit for the VAT of December 2017 (which meant an extra income of 400 million for Madrid), awaits the solution to the dispute over the deliveries on account of 2019 (54 million are at stake), and also has denounced in the Supreme Court the supposed "arbitrary" distribution of a small part of the European funds.

In parallel, the regional legal services have registered an appeal before the Constitutional Court against the central government's decree on energy saving measures, considering that it acts "arbitrarily, authoritarianly and, above all, that it threatens businesses and other public establishments, at a very difficult time for them."

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