Where hire cars (and companies) are registered is an issue in the Balearics.

23-06-2015Gemma Andreu

Regional finance minister Catalina Cladera told parliament today that the previous government of the Partido Popular was to blame for a seven million euro loss of tax income from hire cars that were registered in municipalities on the mainland. She said that it is estimated that some 40% of hire cars "left" the Balearics.

Cladera was responding to a question by the Podemos parliamentary deputy Carlos Saura, who wanted to know what tax measures the regional government plans in order to prevent car-rental companies paying taxes outside the Balearics.

She said that it was not the case that car-rental companies bring no benefit to the Balearics. Those which are domiciled for tax in the Balearics pay 50% tax in the Balearics and 100% of the tax on hydrocarbons as well as 58% of the state tariff for this tax.

The minister explained that the Balearic government has "no margin" to approve tax measures to incentivise companies to return, because the incentives which could be applied are state taxes. These make it difficult to attract the companies to be domiciled in the Balearics. She therefore urged the national government to amend the law on local finance.

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