The Tax on the Increase in Value of Urban Land, better known as “municipal capital gains tax”, is a conflictive tax that is levied on the increase in value of urban land -whether or not there is construction- as well as real estate with special characteristics -BICE- as a result
Tax on Construction Installations and Works
The tax benefits applicable to ICIO may be established:
- In regulations with the status of law, such as, for example, those that may provide for tax benefits in the General State Budget Laws.
- In international treaties.
- In tax byelaws.
What is the Tax on Construction, Installations and Works?
The ICIO is a local municipal tax of a potestative nature, exclusively owned and managed by the municipality, which is levied on the real and effective economic or contributory capacity shown by the taxpayer through the expenditure incurred for the execution of a construction, installation or work of which he is the owner, and for which the corresponding building or urban planning licence must be obtained, or the presentation of a responsible declaration or prior notification must be made.
Phases of the ICIO:
– The provisional settlement which, as a general rule, is quantified according to the budget provided.
– The definitive settlement.
Once the construction, installation or work has been completed and taking into account its real and effective cost, the local council, by means of the appropriate administrative verification, modifies, where appropriate, the taxable base taken into consideration to make the provisional settlement and makes the corresponding definitive settlement, demanding from the taxpayer or reimbursing him, where appropriate, the corresponding amount.
At Euro-Funding, thanks to our multidisciplinary team and our in-depth knowledge of the regulations, doctrine and jurisprudence on this tax, we check, on the one hand, the correct allocation of each of the items and, on the other, the verification of all provisional or definitive settlements as well as the correct calculation of all possible bonuses, exemptions and deductions pending, given the wide discretion that local councils have to regulate different cases.
Main ICIO rebates
As in the majority of taxes, in the ICIO we find different tax benefits such as:
The allowances, which may be requested or automatic, are classified into those that are compulsory and those that are discretionary.
a) Compulsory. These are established in regulations with the status of law, provided that the necessary objective and subjective requirements are met. Within this type of rebates are those applicable to:
– The cities of Ceuta and Melilla.
– Support programmes for events of exceptional public interest.
b) Optional. Those that local councils may establish at their discretion in the respective ICIO tax ordinances, in the cases expressly provided for by law.
1. A rebate of up to 95% in favour of constructions, installations or works that are declared to be of special municipal interest or utility due to social, cultural, historical, artistic or employment promotion circumstances that justify such a declaration.
2. A rebate of up to 95% for constructions, installations or works that incorporate systems for the thermal or electrical use of solar energy.
3. A rebate of up to 50% in favour of constructions, installations or works linked to plans for the promotion of private investment in infrastructures.
4. A rebate of up to 50% in favour of constructions, installations or works related to social housing.
5. A rebate of up to 90% in favour of constructions, installations or works that favour access and habitability conditions for people with disabilities.
6. A rebate of up to 90% in favour of constructions, installations or works necessary for the installation of charging points for electric vehicles.
Characteristics of the ICIO
The Tax on Constructions, Installations and Works is a local tax, which is exclusively owned and managed by the municipality and is structured in two distinct phases: provisional settlement when the licence is granted or the construction, installation or work begins, and definitive settlement when the construction, installation or work is completed.
The taxable base for the definitive settlement of ICIO is the real and effective cost of the construction, installation or work, understood for these purposes as the cost of its material execution, the specific amount of which is determined by the tax administration after carrying out the appropriate administrative verification of the reality of what has actually been executed:
If the difference is positive, the taxable person must pay the difference.
If the difference is negative, the local council will have to make a refund.
At Euro-Funding we study the different elements that should make up the taxable base and we analyse each of the settlements, providing comprehensive advice and support at all stages.
When do you pay the icio?
In the case of ICIO, the tax is due when the construction, installation or work begins, even if the corresponding licence has not been obtained.
This payment is made in two distinct phases:
1. First, the local council must make a provisional settlement on account.
2. Subsequently, it must make the corresponding definitive settlement.
It should be noted, however, that local councils can also demand ICIO on a self-assessment basis if the corresponding tax ordinance so provides and subsequently check that it is in line with reality, which further complicates the process for the taxpayer.
How is the ICIO calculated?
The full amount of ICIO is the result of applying to the taxable base (which coincides with the taxable base) the tax rate determined by the tax byelaws, which may not exceed 4%.
The taxable base of the ICIO is made up of the real and effective cost of the construction, installation or work, which is understood to be, for these purposes, its material execution cost.
The taxable base does not include VAT and other similar taxes under special regimes, rates, public prices and other local public benefits related, where applicable, to the construction, installation or work, nor professional fees, the contractor’s business profit or any other concept that does not strictly comprise the cost of material execution.
How does Euro-funding help you with ICIO?
We have a multidisciplinary team of architects, engineers, lawyers and economists, who come from the collection bodies of different competent entities and other private sectors and are distributed among our offices in A Coruña, Barcelona, Bilbao, Madrid, Seville and Valencia.
We have extensive experience in the development of technological platforms to monitor our clients’ portfolios in order to make asset management more efficient after each of the changes (regulatory, jurisprudential, doctrinal, town planning, fiscal and technical) of the different Administrations involved in tax management – most of them of shared management – through alert systems, notification control and detection and geographic positioning tools (ICT, GIS, BIM).
Our specialisation in the sector, the continuous monitoring of legislative changes, the exclusive digitalisation of all processes for which we have been obtaining recognition since 2019 with the INNOVATIVE SME seal and the up-to-date training of our consultants allows the optimisation of taxation from all available perspectives, achieving numerous cases of success in the reduction of the tax burden of real estate.
We guarantee 100% successful work, we are only remunerated if we generate savings.
WHAT IS THE DIFFERENCE BETWEEN THE ICIO AND A CONSTRUCTION LICENCE?
The Tax on Constructions, Installations and Works is a local tax, which is exclusively owned and managed by the municipality and is payable when the construction, installation or work begins, even if the corresponding licence has not been obtained.
A building permit is a planning permission that can be defined as a municipal authorisation of a regulated nature that allows the execution of works or use of the land that the planning instruments have foreseen for each plot of land.
Why trust us to manage your ICIO?
We have a multidisciplinary team of architects, engineers, tax experts, lawyers and former tax inspectors. All of them spread throughout our offices in A Coruña, Barcelona, Bilbao, Madrid, Seville and Valencia will help you in the management of this tax. We guarantee a 100% successful work, we are only remunerated if we generate savings.
En Euro-Funding hemos desarrollado nuestros propio Sistema de Gestión Integrado formado por: ISO 9.001 Calidad, ISO 14.001 Medioambiental, ISO 50.001 Gestión Energética y Gestión de Seguridad de la Información 27.001.
Estamos suscritos al Pacto Mundial de Naciones Unidas en las áreas de derechos humanos, mano de obra, protección del medio ambiente y lucha contra la corrupción, cumpliendo con los diez Principios de dicho Pacto, tal y como establece su Código Ético de Conducta.
Tenemos calculada y registrada nuestra Huella de Carbono en el Registro del actual Ministerio para la Transición Ecológica y Reto Demográfico desde el año 2014, manteniendo una reducción constante de emisiones.
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