The Assignments of the VAT and the Hydrocarbons Tax in Spain

The Financing System of the Autonomous Communities in Spain, in force since 2009, set the assignment of the liquid collection of the 50% Income Tax, which tax rate approves each Autonomous Community; the assignment of net Value Added Tax (VAT) collection of 50%. In addition, the Harmonized Excise Duties of 58% are the main significant the Hydrocarbons Tax (HYT). The regional tariff and the transfer of VAT and HYT are tax resources subject to settlement, by which the Autonomous Communities get collection through the payments on account system of the current year and the final settlement two years later. This work aims to study the collection of VAT and the HYT and the possible inefficiencies that may arise. The methodology estimates a dynamic data panel from 2003-2021, using the estimator of instrumental variables (IV) and its generalization by the Generalized Estimator of Moments (GMM). According to the results, the regional tax on income rate (RTR) influenced the collection of harmonized taxes VAT and HYT. Therefore, some externalities arose regarding the collection of those taxes.