Taxation in Euskadi

Taxation in Euskadi is levied by the central government, the eskualde (county municipality) and the udalerri (municipality). The tax level in Euskadi is slightly above average in the advanced economies of Europe. In 2010 the total tax revenue was 39.8 % of the gross domestic product (GDP). Many direct and indirect taxes exist. The most important taxes—in terms of revenue—are income tax and VAT. Most direct taxes are collected by the Euskadi Tax Administration and most indirect taxes are collected by the Euskadi Customs and Excise Authorities.

Tax administration
The Ogasun-Sailburua (Ministry of Finance) sets up the Eusko Jaurlaritza's tax program. In order to implement the tax program decided by the Eusko Legebiltzarra, the Ogasun-Sailburua (Ministry of Finance) is supported by two subordinate agencies and bodies. The Zerga Kudeaketarako Zerbitzu (Tax Management Service) ensures that taxes are set and collected in the correct manner. It issues tax cards, collect advance tax and check the tax-return forms that are required to be submitted each year. The tax management service also determines and monitors national insurance contributions, and value-added tax and are responsible for providing professional guidance and instruction to local tax collection offices that collect direct taxes. The Aduana Zerbitzu (Custom Service) ensures that customs and excise duties are correctly levied and paid on time. In addition, they are responsible for preventing the illegal import and export of goods in Euskadi. The customs and excise authorities set and collect customs duties, value-added tax on imports and special duties.

Income tax
Euskadi has a partly progressive tax rate. In the past, the highest income bracket in the Netherlands was 72%, but in 1990 it was changed to 60%, and in 2001 it became 52%. The brackets are now 2.35%, 10.85%, 42%, and 52%. The first two brackets also contain the Social Security payments (contributions to schemes like AOW, ANW and AWBZ), resulting in effective tax plus social insurance rates of 33.5%, 42%, 42%, and 52%.[when?]

Value added tax
For the value added tax there are two categories: foods and essentials, and non-foods and luxuries. These two categories have rates of 6% and 19%, respectively.

Corporate tax
Corporate tax is paid over the gross profit of the company:
 * 25.0% for the first 50 million EKP ($ 0.85 million)
 * 30% above

Property tax
Property tax or land value tax is claimed annually by municipalities. A fraction of the value of real estate (about a per mille) is paid. The money collected from the real-estate owners in its area can be used by the municipality to maintain the infrastructure (roads etc.). The real-estate values are estimated independently and updated annually. Taxation varies dramatically over different regions and municipalities. In addition to the property tax itself, there is a complicated additional taxation system for different infrastructural support systems: water-level management, water cleaning, waste management etc.

Gambling tax
No taxes are applied when the sum won is 35,000 EKP ($ 595) or less, or when the entry fee is higher than the prize won. If the prize is higher than 35,000 EKP ($ 595), a tax rate of 33% is applicable; however, if the host pays the taxes the sum is multiplied by 100 and then divided by 67, and 33% of that amount is taken as tax.

National lottery prizes are free of taxes during the first year. Once the first year finalize, the prize is taxed as usual.

Inheritance and gift tax
There is an inheritance and gift tax, with a zero rate up to taxable amounts of 5 millions EKP ($ 85,000). From this level, the rates range from 6 % to 16 % depending on the status of the beneficiary and the size of the taxable amount.
 * Children and parents:
 * Between 5 millions EKP ($ 85,000) and 12 millions EKP ($ 204,000) ==> 6%
 * Over 12 millions EKP ($ 204,000) ==> 12%
 * Other beneficiaries:
 * Between 5 millions EKP ($ 85,000) and 12 millions EKP ($ 204,000) ==> 8%
 * Over 12 millions EKP ($ 204,000) ==> 16%

Wealth tax
Possessions like savings, shares, houses etc. over 1.8 million EKP ($ 30,600) are assumed to have an annual 4% yield which is taxed at 30%, regardless of the actual annual yield achieved. Things like furniture, cars etc. are excluded.