Can the Catalan Treasury assume personal income tax in 2026?

BarcelonaThe ERC-PSC investiture agreement indicated that the Catalan Tax Agency (ATC) would progressively assume the collection of all taxes, starting with personal income tax in 2026. And the bilateral commission between the State and the Generalitat (Catalan Government) is also expected to specify that this Catalan Treasury must "Now, half a year away from reaching the time horizon set by the Socialists and Republicans, all the sources consulted indicate that it is impossible for the ATC to assume this task in half a year. "Now it is unfeasible," say sources familiar with the ATC. Privately, both leaders of the PSC and Esquerra also admit the difficulty.

Efforts are focused solely on making the collection of personal income tax possible and no mention is made of other taxes, since the challenge is already enormous with this one alone, considering that it is one of the most voluminous taxes. According to calculations by sources familiar with the negotiations, the ATC needs to be resized from a capacity to collect "€5 billion to around €30 billion," which could take between three and five years—they claim—provided the collaboration of the Spanish Tax Agency, which has all the data and technology. To clarify the steps to be taken, the Government has tendered the development of a master plan to the company Indra, specifying all the necessary phases, within the contract the CTTI already has with this company. In principle, this planning should be completed this July, but it cannot be implemented until there is a legislative amendment that allows the Generalitat to collect income tax, which is currently being negotiated by the PSOE and ERC.

Lack of staff

Currently, there are about 850 employees, compared to the 3,800 the Spanish Treasury has in Catalonia alone—according to sources within the agency. But not all of those 800 have tax management capacity: according to various sources, there are only 27 inspectors and about 270 tax managers. According to some estimates, the Tax Agency would need to add at least 1,000 to 1,500 more people to its staff, which takes time: they cannot be trained overnight, especially inspectors.

Computer program

The other major handicap is the software. Right now, the ATC operates with G@UDI and e-Spriu, the latter incorporated during the Process years. "It's nothing sophisticated," notes a source who has worked there, especially compared to the software used by the Spanish Treasury. One of the software's problems is adapting to regulations. While in Spain, software updates are immediate because they have their own IT department, in the case of the ATC, every time there is a regulatory change in taxes, a proposal to modify the programming must be made and wait for the company that manages it (it is outsourced) to incorporate it into the system. A situation that slows down the processing of any tax, since this process often takes months.

A collaboration with the Treasury?

To resolve the two main problems facing the Catalan Tax Agency—staff shortages and software—collaboration with the Spanish Treasury is necessary for these initial years. A transitional period that all sources consider essential to begin collecting taxes from Catalonia. This "coordination" is blocking the law. that ERC and the PSOE are negotiating"The ATC cannot be subordinated to the Spanish Treasury," Oriol Junqueras said yesterday. In fact, a first trial was carried out with the signing of the agreement to collect road tax, although it took months to finalize it. All sources consulted make it clear that with G@UDÍ and e-Spriu, the ATC cannot collect personal income tax and that it is necessary to either create new software (which is ruled out due to the time it would take) or use the software from the Spanish Tax Agency, which has its own IT department and already has all taxpayer data available. This implies legal protection for this transition period and specifying what data is necessary to collect personal income tax in Catalonia, taking into account that it is a tax linked to others such as VAT (with the periodic declaration filed by the self-employed), corporate tax, or wealth tax, which would continue to be collected by the State.

Regarding the transfer of personnel, it remains to be seen whether the Spanish Treasury would be willing to create a bridge to the Catalan Treasury so that there could be a subrogation of workers. A solution that has so far met with opposition from the State's own civil service. There was a previous attempt to do this, in 2014 and 2015, which did not prosper: first, an attempt was made to allow Spanish Treasury workers to be seconded to the ATC, but the State ultimately vetoed it. It was then decided to carry out a specific hiring process for the project, attracting up to 11 highly qualified people. expertise –who had been taking leave from the state agency–, but who ended up running into internal resistance within the ATC itself. Of these ten people, according to knowledgeable sources, only five remain.

The PSC had always advocated a consortium to resolve this transitional period, but sources from Esquerra assure that this is not the way forward. They even withdrew it from the political report at the last congress in the face of the controversy it generated after presenting the PSC-ERC agreement as a solidarity economic agreement. It would be a solution already provided for in the Statute of Autonomy: in relation to tax collection, it spoke of creating, within two years after statutory approval, "a consortium, or an equivalent entity, with equal participation of the State Tax Administration Agency and the Tax Agency of Catalonia. The Consortium could be transformed into the Tax Administration in Catalonia." An extreme that almost twenty years later has not been developed.e