The Council of Fiscal and Financial Policy (CPFF) convened on 4 September 2026 and formally approved the draft reform of the autonomous community financing system. The agreement, reached after months of technical negotiations, establishes a new methodology for calculating the shares of IRPF, VAT, and special taxes allocated to each region. The reform introduces a “funding guarantee” mechanism ensuring that no community receives less than 95% of its previous allocation during the transition period. The Ministry of Finance will submit the legislative proposal to Parliament before year-end.
Key Takeaways
- Funding Guarantee Clause: A transitional safeguard prevents abrupt revenue losses, capping annual reductions at 2% of the previous year’s allocation until full convergence.
- Tax Autonomy Expansion: Regions gain limited powers to set rates on certain environmental and tourism taxes, subject to central government coordination.
- Implementation Timeline: The new model applies from the 2027 fiscal year, with the first recalculated settlements expected in March 2028.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement