The Spanish Confederation of Business Organizations CEOE and SSPA network, the adovacy group of the sparsely populated areas of Southern Europe, have presented the Report “A differentiated taxation for the progress of the depopulated territories in Spain“.

This report has been prepared by a group of experts from the University of Valladolid, coordinated by the Doctor in Economics José Antonio Herce San Miguel, and funded from the SSPA network with local action groups funds.

Previously SSPA has delivered the report to the Commissioner of the Government in front of the Demographic Challenge, Isaura Leal, so that be taken into account in the national strategy. They have told her that if measures of fiscal reduction can be implemented to combat depopulation, and for this, only political will is needed.

They have conveyed that if policies and specific measures capable of correcting this situation are not implemented immediately, the imbalance between urban and rural areas will continue to grow to the extreme, with the European Union suffering the inexorable loss of a fundamental part of social values, cultural, economic and environmental factors associated with rural areas. The SSPA network is convinced that this situation can be reversed, as has been demonstrated in other parts of Europe such as Scotland, explaining the reasons why a differentiated fiscal policy is needed and the most effective and efficient measures to achieve positive results.

This report presents a fiscal proposal for the repopulation of a territory that in the report denominates like the “Demographic Ultraperiphery”, with the objective to create the incentives that avoided the depopulation and foment the repopulation. The justification, assessment and socioeconomic impact of a tax proposal for repopulation has been presented, as well as the potential effects of a series of fiscal stimuli of a certain magnitude applied to natural and legal persons of all the territories affected by the depopulation and those that decide to settle in them.

This report assesses the legal reserve, since territorially differentiated tax incentives must pass a strict examination based on the provisions of the Treaty on the Functioning of the European Union (TFEU) to avoid being considered “State aid”. There are precedents in Spain and in other countries adaptable to the case of depopulation, such as the Economic and Fiscal Regime of the Canary Islands that is reflected in the Spanish Constitution as an “Ultraperipheral Region” (due to its geographical distance.) These exceptions, reinterpreted in the plan of the low density and high population dispersion, are those that would help to meet the regulatory challenge posed by the fiscal exceptionality for the depopulated Spain that is defended in this report.

The legal analysis that has been carried out in this report concludes that the recognition of a special Fiscal Zone for the unpopulated territories could have an appropriate interpretation, and that a reasoned request from the Government of Spain could initiate a process towards its authorization by the EU. They have also analyzed that the cost to the state of these differentiated fiscal measures would be minimal and could recover in the medium term with the increase in economic activity that would be generated in these territories.

It is a key moment for the rural environment and the depopulated zones of our country, and this report is the result of the concern for the progressive and unstoppable depopulation of a large part of the Spanish territory, and of the irrevocable commitment of the SSPA network towards the reversion of said process of depopulation providing rigorous proposals. This network will soon make presentations of the report in Cuenca, Soria and Teruel with discussion tables to give more details and analyze them with the whole society.