The full tax is a quantity used to calculate the payment of a tax with a variable tax rate. In this sense, it is the result of applying the tax rate corresponding to the taxable base.
Before seeing what the full fee is, we must know a few things.
Let’s go by steps.
The specific tax rate and percentage
When we talk about taxes, we talk about tax rates. And when we talk about tax rates, we must know that there are different types.
In this case, as it is the full tax, we refer to a quantity used to calculate a tax with a variable tax rate.
And what does “variable tax rate” mean?
Imagine the case where the State establishes a flat tax on fuels. For example, $ 0.50 per liter of gasoline. It is not applied on a monetary basis, but is established in a fixed way for each liter of gasoline consumed.
When the tax is calculated in this way, we say that the tax has a specific tax rate. Well, it is specified so it does not vary.
Now let’s look at the VAT case.
In the case of VAT, the general VAT tax rate is 21%. When we buy a product, the VAT will depend on the sale price, to which a surcharge of 21% will be applied. In this case we are talking about a monetary base, and a tax rate that economists call a “percentage tax rate” or, as we said above, variable.
Under this assumption, it is not $ 0.50 per product purchased. It is the result of applying a surcharge of 21% to the price of the product, so, depending on what the product is worth, we can talk about one amount or another.
This is a variable tax rate.
What is the full fee?
That said, the full tax is a quantity used in the calculation of a tax with a variable tax rate. In this case, we are talking about the result of applying the tax rate to the taxable base.
Therefore, we are talking about a variable tax, and that it is a monetary base (taxable base) and a percentage tax rate.
In the case of VAT, for example, it would be the following:
Let’s imagine that we buy a T-shirt that, without VAT, costs 35 dollars.
The taxable base in this case is $ 35.
And to this base we must apply VAT, so we must apply the VAT tax rate, which in the case of a shirt is 21%.
After applying it, it turns out that the VAT is $ 7.35, which we will add to the price of the shirt. Therefore, the final price is the result of the sum of the sale price plus the VAT surcharge, being $ 42.35.
The full fee in this example is $ 42.35.
The full share in personal income tax
In the Personal Income Tax, better known as IRPF, the full fee is obtained by applying the scale of tax corresponding to the taxable base.
However, and unlike VAT, the resulting amount will not coincide with the amount that we will finally pay. After obtaining the full quota, we would still have to subtract the corresponding deductions and bonuses, giving us the liquid quota.
Income Tax: State full share and autonomous full share
Personal income tax is a tax on people’s income, this being a progressive tax that goes by sections. In other words, it increases as income grows, creating sections with different tax rates in which we would classify our income.
- First tranche: Income up to 12,450 euros, 19%.
- Second tranche: Income up to 20,200 euros, 24%.
- Third tranche: Income up to 35,200 euros, 30%.
However, we must know that we are talking about a state tax that is partially assigned to the Spanish autonomies, so this tax rate is a total tax rate, which is divided into the sum of a state rate and an autonomous one.
Let’s see an example:
Autonomous rate: 9.5%.
State rate: 9.5%.
Now, total rate: 9.5% + 9.5% = 19%.
As we can see, the tax rate of the first tranche, and of all, is the sum of the two rates, the state and the autonomous.
Therefore, when we calculate the full tax, and since both tax rates vary, we must calculate the full tax for both.
That is, we must apply the state rate, and then the regional rate, to the taxable base, thus obtaining two full installments, the full state rate and the autonomous one.