The ATC will not be prepared to perform personal income tax collection functions until after 2028

MadridOne of the pillars of the agreement between the PSC and Esquerra to invest Salvador Illa was the collection of all taxes by the Catalan Tax Agency (ATC). However, the truth is that the ATC is currently far from being able to do so at its current scale. Furthermore, the Government's objective is to focus on beginning to assume management functions—not collection functions—for a single tax, the personal income tax (IRPF). In fact, considering the ATC's current situation, any "collection" function would extend beyond 2028 and always "in collaboration" with the Spanish Tax Agency. This is clear from the report (See the chartThe report, prepared by Minsait, an Indra subsidiary, at the request of the Government, concerns the development plan for the ATC (Centralized Temporary Storage Facility), which ARA accessed through a transparency request—initially denied by the Generalitat (Catalan Government) and later accepted following an appeal to the GAIP (Galician Authority for Access to Public Information).

Below, we break down the 59-page report, assuming that all development is contingent upon the success of negotiations. currently stranded: The Catalan government needs Congress to approve the delegation of powers to collect personal income tax (IRPF). In statements to ARA, the Minister of Economy, Alícia Romero, acknowledges the difficulty of the undertaking: "We have to go from managing 5 billion euros to 30 billion. It's very complex; the technological transformation is enormous." She adds that until there is legal authorization to manage IRPF, they cannot deploy the tax agency because it would be like spending money on customs or any other function for which the Catalan government lacks jurisdiction, which—the minister warns—could even be challenged in court. Regarding the Indra report, she clarifies that it is a guide prepared by an external party and that the government will adopt what it deems appropriate.

Up to "70% of the processes"

The document states repeatedly that it is based on a "realistic" approach, therefore only considering it feasible to prepare the Catalan Tax Agency (ATC) to participate in the management of Personal Income Tax (IRPF) in "70% of the associated processes"—not 100%. Specifically, according to the report, the ATC would ultimately have a central role in managing the bulk of IRPF, which is the income tax return (forms 100 and 101), while the remaining tax forms, as well as census management, would remain outside its purview and would be handled by the Catalan Tax Agency. Furthermore, this would not be immediate but would occur sometime after 2028, when the ATC could only begin to perform functions related to IRPF management (not collection). Before then, the Catalan Tax Agency would focus on becoming more accessible to the public and participating in taxpayer consultations.

To complete the plan, the ATC would need double its current workforce of around 850 employees. According to the document, assuming the functions of the Income Tax Office would require a "structural" increase of 857 new hires, effectively doubling its staff. During tax season, the number of workers would need to be even higher, up to another 1,058, although these would be temporary. Currently The number of Spanish tax office workers in Catalonia is 3,800.

The report commissioned by the Government anticipates that this staff increase will be achieved through competitive examinations or by incorporating temporary staff, but it also foresees "the incorporation of personnel from the State Agency." The plan notes that the Public Employee Statute provides for mechanisms for mobility between administrations, although it warns that this is a "complex procedure that can extend between six months and two years." "The difference in conditions could generate discontent and protests, unless equalization is agreed upon," it warns. In this regard, the Ministry of Economy sees it as a possible scenario, but clarifies that it is not currently on the table in discussions with the Treasury.

The phases

Phase 0

The first part of the document is intended to update the Catalan Tax Agency (ATC) regarding the functions it is currently legally granted but does not yet fully exercise because it has not grown sufficiently. For this period, the report recommends: "Progress must be made by giving the ATC institutional visibility, without yet assuming tax application functions." This first phase consists of three blocks, which the report calls 0.1, 0.2, and 0.3, of which the ATC is currently only in the first, according to sources at the Ministry of Economy. In fact, they are now focused on updating the Espriu and Gaudí software to manage their own taxes.

At this stage, the Catalan Tax Agency "provides information and assistance" to applicants with prior appointments for the income tax campaign, which is managed by the Spanish Tax Agency. To this end, The Government has announced this week An increase of 152 jobs has been added to the staff to handle the income tax campaign, although not as a structural change but only to cope with the peak workload. This represents a 49% increase in personnel compared to last year, although the plan calls for hiring 498 people to cover at least 60% of the 384,082 appointments in Catalonia.

The next phase outlined in the report involves raising the public profile of the Catalan Tax Agency (ATC), in conjunction with the Spanish Tax Agency; while stage 0.3 would mark the beginning of the Catalan Tax Agency's participation in operational aspects of Personal Income Tax (IRPF) starting in 2028. However, despite this participation, it would not handle any tax collection, focusing instead on tax administration, inspection, and review. At this point, the report already warns of "high risks," citing the "degree of acceptance" by the Spanish Tax Agency or "resistance to change."

The Government will not be able to reach this phase without certain preconditions that are not currently met: an institutional agreement with the Spanish Tax Agency (the so-called agreement for the management of Personal Income Tax), which, according to the plan, should be reached before March, but of which there is still no evidence, and the legal modification that the Spanish government would enact.

Phase 1 and Phase 2, without a timetable

Phase 0 culminates in 2028, while phases 1 and 2, which would mark the ATC's real leap into personal income tax (IRPF) management, are not yet scheduled. Regarding phase 1, the report states: "The main objective of this stage will be to equip the ATC with the technical, organizational, and operational capacity to independently manage the preparation and filing of IRPF returns." In this sense, it wouldn't be until phase 2 that the Catalan tax authorities would begin to participate in tax collection: the ultimate goal would be to handle "70% of the IRPF workload that Catalonia represents" for the Spanish tax authorities. However, the same document acknowledges: "If the reinforcement of structural staff and their training does not occur in a timely manner, delays, backlogs, and a decrease in service quality may arise."