The Spanish government threatens aid to Prohens' self-employed

PalmaThe State threatens the tax deduction of the Balearic Government so that direct aid intended for self-employed workers affected by the war in the Middle East does not have to be taxed under the Personal Income Tax (IRPF). The Spanish government has sent a request to the autonomous executive questioning the constitutionality of the measure, which is part of the anti-crisis decree approved by the Executive. It considers that this measure could cause economic and fiscal competition between autonomous communities.

In a statement, the Minister of Economy, Finance and Innovation, Antoni Costa, has rejected the State's arguments and has assured that it is "unthinkable" that the deduction could generate business "relocations" or movements of economic activity between territories that could harm other communities. Costa has argued that the aid is exclusively directed at sectors established in the Islands, such as the primary sector, land transport, industry, construction, and trade.

The measure is limited to economic activities established in the Islands during 2026 and the tax deduction is temporary, limited to this tax year. The vice-president has defended that it is not reasonable to think that companies or self-employed individuals from the Peninsula can transfer their activity to the Islands to benefit from extraordinary aid linked to a specific economic context and specific sectors. In the same vein, he has defended that the purpose of the deduction is to prevent beneficiaries from having to pay taxes on aid conceived precisely to compensate for the damages derived from an exceptional situation caused by international instability.