Will any taxes increase in 2026? The third consecutive year with extended budgets begins.

BarcelonaAs in Catalonia, the national budget is beginning its third consecutive year with an extended budget. So far, the Catalan government has extended or approved its budget 25 times since 1980, and the national government 15 times since 1978. The Spanish government's extension of the 2023 budget includes a new "component 32" under the heading of "support for recovery," aimed at "strengthening the country's capacity to cope with extreme weather events (such as the DANA storm) and external crises that affect the Spanish economy." As a result, actions within the transition plan are being redirected towards new investments from already completed budget items or adjustments resulting from the plan's evolution since its approval in 2021. In the case of the Generalitat's extension, a decree also comes into effect that will implement the salary increase by 2026, a maximum of 1.5%, which could be increased by an additional 0.5% if inflation is equal to or greater than 1.5%. A 3% increase in the Guaranteed Income Indicator (IRS) has also been authorized, bringing it to €801.85 per month. Likewise, it is guaranteed that accrued healthcare spending—which includes all expenditure by the Department of Health, CatSalut, and the Catalan Health Institute (ICS)—will increase by the maximum percentage allowed by the spending rule, that is, 3.5%, to preserve the "essential service" status of healthcare. With extended budgets, investment is usually the main victim.

In the Generalitat, from 2010 – when José Montilla was president – until 2021, none of the Generalitat governments had managed to approve the budgets on time and had to resort to extensions under the governments of Jordi Pujol in 1982 and 1989 and 1986, 1987, 1990, 1996, and 2000; in 2004, under Pasqual Maragall; in 2007, under José Montilla; in 2011, 2012, 2014, and 2015, under Artur Mas; in 2017, under Carles Puigdemont; and in 2020, under Quim Torra.

Democracy began with an extension in the case of the State in 1978 due to the Transition and the establishment of the new legal framework after the approval of the Constitution. Subsequent extensions occurred in 1982, during the change of government from Leopoldo Calvo-Sotelo (UCD) to Felipe González (PSOE); in 1995 due to a lack of parliamentary majorities with Felipe González in government; in 2011, under José Luis Rodríguez Zapatero (PSOE); in 2016 due to a caretaker government following the general elections, with Mariano Rajoy (PP) as president; in 2019 and 2020, under Pedro Sánchez (PSOE); and in 2024, 2025, and now 2026, also under Sánchez. Furthermore, the budget was approved late on five occasions: 1983 and 1990, under Felipe González; 2012 and 2017, with Mariano Rajoy, and 2018, with Pedro Sánchez.

The state extension also preserves an addendum that simplifies the recovery plan "to streamline verification and implementation processes with reduced bureaucratic burdens, reinforce strategic priorities, and optimize the use of available resources before the end of the Resolution and Resilience Mechanism (RRM) in year 2."

In addition, new tax obligations and aid come into effect with the new year:

More control over Bizum and cards

Financial institutions will have to report monthly to the Tax Agency the accumulated total billing made through Bizum by businesses and professionals. They will also have to do so for all types of card transactions made by taxpayers exceeding €25,000 annually.

Diesel Taxation

To avoid losing Next Generation EU funds, the Spanish government will have to increase taxes on diesel, as stipulated in the transition plan. Since the government was having difficulty securing sufficient parliamentary support, Brussels granted Spain an additional six months to meet this commitment.

Aid for energy efficiency and electric vehicles

The Spanish Tax Agency has implemented tax measures for those who carry out energy efficiency improvements in their homes. Income tax deductions of 20%, 40%, and 60% are available. Deductions of up to 15% are also available for those who purchase an electric vehicle by December 31, 2026. Subsidies are also available for the installation of charging points. Unemployed individuals are not required to file an income tax return.

Another new development is that those receiving unemployment benefits will no longer be required to file an income tax return.