The Balearic Islands have, since June last year, been one of the preferred regions for companies looking to move their fiscal headquarters because of the formation of regional governments of the left in which Podemos is a partner.
This is the conclusion of the Spanish ratings agency Axesor, which cites 134 examples of relocation to the Balearics from Catalonia, Valencia, Madrid, the Canaries and Andalusia. Of these, the most have come from Catalonia - 65. (In the case of Catalonia the situation is aggravated by companies exiting because of worries over secession.)
The Balearics have not experienced the same effect as regions where there is direct Podemos government involvement. Podemos in the Balearics supports the PSOE-Més government but isn't a formal member of it. Axesor believes that the Balearics are retaining the appeal acquired in previous years because of the economy's tourism base.
In certain regions of Spain, the flight of companies has been high because of significant increases in tax - income, property and inheritance. These include Navarre, Aragon and Extremadura. Changes to tax residence require board meetings and offices in the relevant region and also require registration with the local social security system.
Accordingly, the head of the Tax Agency in the Balearics, Maria Antonia Truyols, considers the figures to be positive. "Every time that a business from another region chooses the Balearics as its base increases the islands' business fabric. We don't know the reasons for this relocation, as the same tax system operates in the Balearics as it does in other regions. We don't influence the business activity tax or IVA (VAT)."
For Truyols, the choice of the Balearics suggests that a new government here and fears of greater tax burden have not had an effect. "Businesses have found that this has not been the case, while it should be said in this respect that the regional government is pressing for the introduction of a special economic regime (REB) for the Balearics, which would attract more businesses and improve the general tax revenue situation here. With the REB, legal mechanisms will be established to offset costs of insularity and thus make the islands even more attractive in tax terms."
In regions where businesses have been leaving there is concern that this flight could increase if political situations do not bring about measures to incentivise new business and indeed the retention of business.
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