Direct taxes directly tax the income of citizens. In other words, direct taxes fall on each person with name and surname, that is, the citizen who must pay the tax is clearly identified.In addition, by this fact, the accrual moment is also determined and identified.
By directly taxing the person, direct taxes can be progressive, so that whoever has more money has more pay, thus serving to redistribute wealth. And is that taxing directly the manifestation of capital, can be articulated so that those who have more, more also paid, something that can not be done directly with the indirect taxes, like the VAT , where everyone pays the same in percentage terms Pay more who consumes more. This is because direct taxes are levied on the person, while indirect taxes are levied on the goods or services consumed.
Types of direct taxes
Income Tax on Individuals (Personal Income Tax)
It is a direct tax because it taxes an amount of money, which varies according to one citizen or another, that is, according to the income obtained by each individual in a given year. Most direct taxes are progressive, because their amount varies depending on the income and assets of that person. The more income and equity you have, the more you pay. In addition, taxes are hardly transferable, due to their particular condition. If a person has to pay their personal income tax, no other person can do it instead.
Non-Resident Income Tax
This tax is for those income that have been obtained in Spain by people who are not in national territory but carry out activities in this territory. An example would be a person who charges rent for real estate in Spain but does not reside in Spain.
It is like personal income tax but applied to companies. It is applied to the net profit that companies obtain but it is much less progressive than personal income tax.
Inheritance or Donation Tax.
This tax falls on the money or goods that are received free of charge. The characteristic of this tax is that it does not apply to money that is consideration for work but has been transferred by someone. The autonomous communities are those that manage the tax rate depends a lot on the family closeness of who is inherited or who donates.
This tax falls on the possession of an estate, which is supposed to represent an additional economic capacity for those who own it. They call it the tax for the rich because they mean having a wealth of more than 700,000 euros. This section does not include habitual housing, unless it exceeds 300,000 euros.
The above taxes are the most prominent but there are other taxes, which are managed by local governments.