No tourist tax refunds for Balearic residents

The consequence of the decision not to increase the tax

Excluding residents from payment of the tourist tax would have been discriminatory. | Photo: Jaume Morey

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The Balearic Government (the Partido Popular) had intended to introduce a deduction for payment of the tourist tax from residents' annual income tax declarations. However, a consequence of having had to accept a Vox rejection of an increase in the tax rates for the high-summer months is that there will now be no possibility of a deduction.

The government had envisaged tax relief of up to 250 euros per taxpayer. In order to obtain this, taxpayers would have had to present invoices or receipts from tourist establishments. Only taxpayers with annual incomes below 33,000 euros would have qualified for this.

Reference to the tourist tax and therefore to any tax relief has been removed from the decree for tourism containment that the government has approved. In addition to there not being an increase in high summer (June to August), there is now also no decrease for certain low-season months. The rates for the low season are in any event a quarter of the summer rates.

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When the tax was introduced in 2016, the intention of the then PSOE-led coalition government was that residents wouldn't have to pay it. However, this would have constituted a breach of EU non-discrimination regulations. The government couldn't discriminate between residents and non-residents. Accepting that residents had to pay the tax, the PP's solution was a tax return deduction, which wouldn't have been a breach.

The government is said to be looking at other possible solutions, the PP having made this something of a big issue in its 2023 election manifesto.

It might also be pointed out that IVA (VAT) of ten per cent is charged on the tourist tax. It was necessary to apply this, as the PP Spanish Government of Mariano Rajoy had made the tax liable to IVA in response to Catalonia's introduction of its tourist tax.