The Balearic government is to take a long hard look at the region's tax system and how the Balearics' money could be better managed and re-invested into the region. The aim is to make the region more financially self-funded and reliable. Yesterday the government announced that a special commission is to be established to examine the current situation and one of the areas for study is the payment or non payment of taxes by non-residents who spend a substantial amount of time in the Balearics each year. In short, the government is looking for ways in which non-residents who “live” in the Balearics pay local taxes. The working commission which will examine the viability of the proposal has been set up by the Balearic Ministry for Finance and it will also take a global look into how much money the Balearics is losing via non paid taxes. The commission has been asked to come up with a variety of solutions to the non-resident issue and the Ministry for Finance fears that a substantial amount of money is being lost through the non-resident loop hole and that the community as a whole could benefit from the extra funding. Balearic Finance Minister, Joan Mesquida, said yesterday “the project is still being studied, but our objective is to offer some form of compensation so that non-residents register and pay their taxes in the Balearics. It will generate more funds for the Autonomous Community.” His department has started preliminary work on the project. At the moment, the Balearic government receives a percentage of IRPF, personal income tax paid to the State, while in other cases the Balearic government receives 30 percent of taxes paid to Madrid. Mesquida said “there are many non-residents who spend more than 183 days, which is the legal maximum without being considered a resident and therefore eligible to pay taxes, per year in the Balearics.”


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