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Sources of financing

The legal principles of the financing

The Generalitat is financed according to a model established by the Constitution, and which is based on the four following pillars, in coordination with the Spanish tax office:

  • Autonomy. Recognition of this principle implies, regarding the income, that the Generalitat has a tax power to act in three fields: regulation, tariffs and tax management. This financial autonomy cannot entail the existence of barriers to the circulation of goods and factors throughout the Spanish territory.
  • Solidarity. The system pursues the correction of regional imbalances through the distribution of resources amongst the Autonomous Communities.
  • Sufficiency. The Autonomous Communities Public Finance Act (LOFCA) establishes that it is the responsibility of the State to ensure that the autonomous administrations are provided with sufficient resources.
  • Institutional loyalty. The Organic Law on the financing of autonomous communities (LOFCA) establishes the obligation to assess - and if appropriate offset – the positive or negative impact which may be represented by the legislative actions of Spain and of the autonomous communities.

Sources of financing

With the approval of the new Statute of Autonomy of Catalonia by Organic Law 6/2006, of 19 July, on the reform of the Statute of Autonomy of Catalonia, the process began to reform the financing model which culminated in the enactment of three laws: Organic Law 3/2009, of 18 December, modifying Organic Law 8/1980, of 22 September, on financing of autonomous communities; Law 22/2009, of 18 December, which regulates the financing system of the autonomous communities under the ordinary regime and cities with a statute of autonomy and modifies certain tax rules, and Law 16/2010, of 16 July, on the regime of transfer of taxes from the state to the Autonomous Community of Catalonia and on the establishment of the scope and the conditions of transfer. In relation to the previous model, the current model, which has been applied since 2009, represents important improvements in terms of autonomy and financial sufficiency, at the same time as introducing – for the first time - explicit mechanisms of levelling and solidarity.

The income linked to the financing model represents 91.2% of non-financial1 resources of the Generalitat of Catalonia and can be grouped in three main blocks depending on its origin:

  • Income from taxation;
  • The transfer from the guarantee fund of essential public services;
  • The adjustment funds: overall sufficiency fund and convergence fund.


Income from taxation is obtained from taxes transferred - totally or partially - from the State.

  • Inheritance and gift tax
  • Wealth tax2
  • Property transfer and documented legal acts tax
  • Gambling taxes
  • 50% of income tax, constituting the autonomy’s share of this tax
  • 50% of VAT
  • Tax on hydrocarbons3:
    - 58% of the general state rate
    - 100% of the special state rate
    - Yield of the autonomous rate
  • 58% of the special tax on alcohol
  • 58% of the special tax on tobacco processes
  • The tax on electricity
  • The special tax on certain means of transport


These taxes are assigned to each Autonomous Community according to the fiscal address of the taxpayer in the case of personal taxes, or, in the case of taxes on property transactions, the location of the property. Taxes on consumption are applied according to the place of consumption or to statistically calculated consumer indicators.

The aim of the transfer from the guarantee fund of essential public services is to ensure that each autonomous community receives the same resources per unit of need to finance the essential public services of the welfare state (education, health and other essential social services). This transfer is calculated annually from the 75% levelling of the tax resources, and adding a contribution from the State. Its amount is determined by the difference between the indicator of needs -which depends on the adjusted population- and the fiscal capacity. The indicator of the adjusted population is obtained from a series of variables and weightings, in accordance with the following table:


Adjusted population
Equivalent protected population distributed into 7 age groups 38,00%
Population  30,00%
Population from 0 to 16 years old 20,50%
Population over 65 years old   8,50%
Population variables 97,00%
Surface area 1,80%
Dispersion 0,60%
Insularity 0,60%
Rest of variables 3,00%
 TOTAL 100,00%


The autonomous communities with a fiscal capacity lower than the needs receive a positive transfer. In the opposite case, when the fiscal capacity exceeds the needs, the community makes a net contribution to the rest of communities for the difference.

The adjustment funds which ensure the viability of the model:

  • The Overall Sufficiency Fund which covers the overall financing needs on guaranteeing the revised status quo of each autonomous community which corresponds to the resources arising from the previous model plus the additional resources which make up the new model and which are distributed in accordance with the increase in the adjusted population in the period 1999-2009; the adjusted population; the potentially dependent population; the population recognised as dependent; the dispersion and the density. An increase in resources is also foreseen for linguistic normalisation.
  • The Convergence Fund made up of the Competitiveness Fund and the Cooperation Fund:
    • The Competitiveness Fund is intended for those autonomous communities which have a financing per capita lower than the average or lower than their fiscal capacity index with the aim of reducing the differences in the resources per capita and encouraging autonomy and the fiscal capacity. This fund is distributed among the beneficiary autonomous communities (which include Catalonia) in accordance with their relative adjusted population.
    • The Cooperation Fund is intended for those autonomous communities with a GDP per capita below 90% of the average or a population density below 50% of the average or which, having population growth below 90% of the state average, have a low population density. The variables used for the distribution of these funds among the beneficiary communities are relative population and GDP per capita.


The following table shows the settlement of the Generalitat’s income budget for 2015 separating those linked to the financing model. To help compare the data, the income corresponding to the settlement of the financing model, which is carried out with a two-year delay, is included under “other resources”. 


In 2015, it is observed that the total income from the financing model records a €961m increase in relation to the previous year, due above all to the fact that the main taxes, such as personal income tax and VAT, increase by €373m and €513m, respectively. It is, however, also due to others, such as property transfer tax and documented legal acts tax, which increased by €136m and €60m, respectively, due to the upturn in the property market. Inheritance and gift tax also increases by €136m, due to the coming into force of the reform contained in Law 2/2014, of 27 January.

Meanwhile, others, such as the special tax on tobacco and the tax on energy, went down by €148m and €68m, respectively.

In 2015 the contribution made to the state increased due to the fact that the Overall Sufficiency Fund was 1.9% lower than the previous year, and the Fund of Essential Public Services, which was negative, was 12.9% higher.

Resources related to the financing system

The non-financial income other than that coming from the financing model only represents 8.8% of the total. In relation to 2014, the data show a reduction of €128m, above all due to the €328m fall in income on the disposal of real investments, which in 2014 had extraordinary income arising from the sales of buildings.

1Without considering the transfers made by the state to finance Catalan local authorities, as the Generalitat only acts as the paying bank.

2In 2008, the State established an allowance of 100% of the quota and a compensation for the autonomous communities for the loss of their tax revenue (Law 4/2008). However, in 2011, Royal Decree Law 13/2011 was passed, temorarily re-establishing wealth tax for the years 2011 and 2012. This re-establishment of wealth tax has been renewed for 2013 (Law 16/2012), 2014 (Law 22/2013), 2015 (Law 36/2014) and 2016 (Law 48/2015).

3Law 2/2012, of 29 June, on the general State budget for 2012 integrated the Tax on retail sales of certain hydrocarbons into the Tax on hydrocarbons.

Update:  18.11.2016