The Councillor of Economy, José Antonio Rovira, highlights that the region has shifted from being among the highest tax pressure areas to offering the most income tax deductions. Around 750,000 taxpayers will benefit from 217 million in deductions.
The Valencian Community has transitioned in three years from being one of the autonomous communities with the highest tax pressure to leading income tax deductions in Spain. This was asserted by the Councillor of Economy, Finance and Public Administration, José Antonio Rovira, during the VII Night of the Economy of the Chamber of Commerce of Orihuela, which this year celebrates its 125th anniversary, according to valenciaextra.com.
Rovira framed this change within the fiscal strategy of the Valencian government since 2023, aimed at attracting investment and supporting the business fabric. In his speech, the councillor stated:
“In May 2023, we were among the communities with the highest tax pressure. In contrast, today the Valencian Community is the autonomous region with the most income tax deductions in all of Spain.”
The impact of these measures translates into approximately 750,000 Valencian taxpayers no longer paying 217 million euros thanks to the regional deductions introduced, according to the data provided during the event.
In addition to expanding the catalogue of income tax deductions, the Generalitat has raised the income limits so that the middle classes can access these tax reliefs. A reduction in the regional income tax rate has also been approved, effective from 2026, and new deductions for hearing aids and veterinary expenses have been announced, along with a second reduction in the income tax brackets.
In the Wealth Tax, the exempt minimum has been raised to alleviate the burden on those accumulating assets without being large fortunes. For new self-employed individuals, a zero fee during the first two years of activity has been implemented, which extends to four years for young self-employed individuals.
In the Inheritance and Donations Tax, the Generalitat has established a 99% discount for transfers between children, spouses, and parents, and has extended discounts to uncles, siblings, and nephews: 25% in 2026 and 50% in 2027. Recently, as Rovira explained, this discount has been extended to the fourth degree of kinship, addressing a long-standing demand from family businesses. The tax is eliminated for family businesses, including agricultural ones, professional businesses, and holdings in holding companies.
The second pillar of the fiscal policy is administrative simplification. With the Simplify Plan, the Generalitat addresses the regulatory and organizational processes of both the regional administration and the local Valencian entities, aiming to reduce bureaucratic burdens, eliminate duplications, and coordinate procedures.
The event also served to recognise the role of chambers of commerce as intermediaries between the business fabric and institutions. The gathering brought together local entrepreneurs in a context marked by the challenges of digitalisation and energy transition.
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