Spain's Treasury sends draft regional financing reform to autonomous communities

The Ministry of Finance (Hacienda) delivered on 10 July a draft of a new financing system to Spain's 17 autonomous communities. The proposal keeps the 55 % share of IRPF and raises the IVA share to 56.5 %, and introduces a voluntary "IVA pymes" scheme that would allocate VAT from small‑business sales to the region where the company is domiciled. The reform would add about €20.975 billion a year to the total pool of regional resources, bringing the total to €224.5 billion by 2027.

Catalonia would receive the largest boost – an estimated €4.686 billion extra annually – and backs the plan. Galicia, citing a gain of only €380 million, and the opposition parties PP and Vox consider the proposal unacceptable and refuse to negotiate. Asturias shows internal division, while the central government seeks support from other regional leaders. The draft will be debated by the Consejo de Política Fiscal y Financiera on 29 July before heading to the national parliament for a final vote.