1,060 companies moved from Catalonia to Madrid for tax reasons since 2010, according to Madrid’s Government

Madrid (ACN).- In the last three years, 1,060 companies moved their headquarters from Catalonia to the region of Madrid, according to a report published on Monday by Madrid’s regional Government. Since 2010, 5,000 companies based in the rest of Spain decided to move to Madrid; 21.4% of them were from Catalonia. The report states that most of them took the decision because of the lower tax rates that are in place in Spain’s capital, compared to other areas such as Catalonia. Paradoxically, 43 cents out of every euro paid in taxes in Catalonia pays for investments and services made in other parts of Spain, following the fiscal redistribution scheme imposed by the Spanish Government. This means that Catalonia suffers from an annual fiscal deficit of 8.5% of its GDP, with the result that Catalan citizens and companies give away €16.5 billion per year. Meanwhile, the Catalan Government is under-budgeted and obliged to implement severe budget cuts in public services and raise taxes to reduce public deficit in order to balance the budget. An example of this is the fact that in January 2013 there were 40.7 civil servants for every 1,000 inhabitants in Catalonia, while the Spanish average was 57.4 and it was as high as 79.6 in the Autonomous Community of Extremadura.

Madrid’s Finance Minister, Enrique Osorio, explained on Monday that a total of 1,060 had left Catalonia since 2010 and moved their headquarters to the Autonomous Community of Madrid. The figure represents 21.4% of the almost 5,000 companies that abandoned the areas where there were previously based and transferred their headquarters to Madrid. According to Osorio, the figures “show that the mix between liberal policies based on austerity and budget stability, policies of selective tax reductions and the decreasing of bureaucratic obstacles to set up new businesses generate in our region a more favourable environment for companies”.

After Catalonia, the second Autonomous Community with the highest number of headquarter transfers to Spain’s capital region was the Valencian Country (also called Valencian Community) with 784 companies, followed by Andalusia with 763 enterprises. The figures are obtained from a report with data from a publication of the Mercantile Registration Office (BORME).

The report explains that 60% of the companies that within the last three years moved to Madrid had a turnover below €5 million per year, while 9.5% had a greater turnover. 30% of companies have a turnover which is, surprisingly, unknown. From the group of companies with an annual turnover higher than €5 million, 25% come from Catalonia.