The Constitutional Court (TC) has rejected the amendment of the law adopted last year by the Government of Catalonia, according to El Nacional. Law No. 88 “Law on Fiscal, Financial and Administrative Measures in the Public Sector and Creation of Tax on Installations with an Impact on the Environment”. The change made in 2020 increased by 10% the annual revenue forecasts for the exemption from Personal Income Tax: From EUR 5,550 to EUR 6,105. The Constitutional Court has rejected the law on the grounds that it exceeds the autonomous powers: “The Government of Catalonia has overcome the limitations that the State envisages in order to give effect to this competence granted in the Autonomous Community.” The resolution specifies that citizens benefiting from the 2020 income declaration will not have to face the payment of savings. According to data from the Generalitat, 205,043 citizens have benefited from the reduction of Catalonia.

Appeal by the Spanish Government

The Spanish Government brought the law to court, which was amended in April 2020. The Spanish Minister of Finance, María Jesús Montero, explained that the autonomous communities have the competence to make small adaptations of the IRPF, but not to “create new categories”, and that is what the Government of Catalonia did. The Constitutional Court has given the job seeker the right to do so. The law that has been rejected by the government of the PSOE-Podemos was agreed by the executive presided over by Quim Torra with Catalunya in Comú in the context of the negotiations to approve the budgets.