Keys to the new special funding for Catalonia and the communities that wish to do so

The special funding agreed between the Spanish Government and the Generalitat has opened the door to a change in the model in force since 2009 and will in future allow Catalonia and the communities wishing to join this scheme to collect all taxes, starting with the IRPF.

These are some of the keys to the model agreed in Barcelona by the Bilateral State-generalitat Commission, in the view of the Catalan Government.

• Paradigm shift: from receiving resources to collecting

The Generalitat stresses that the new funding it has agreed with the State implies a "paradigm shift", since Catalan institutions would move from receiving resources to collecting them.

This would increase Catalonia's fiscal co-responsibility by taking greater responsibility for revenue. Catalan Government sources stress that this is not just an "update" of the current system.

• A "special" but "general" model

The details of the new financing model will be detailed below and leaves the collection of all taxes to the Tax Agency of Catalonia (ATC).

It would be a "special" model, because it gives the Generalitat the leading role in the collection, but at the same time it can be "generalized", because it could be transferred to communities that wish to do so.

• How would the new model work?

The planned model, in principle, leaves the entire collection of Catalan taxes to the Generalitat and provides for the allocation of part of these resources to the State in return for the services it provides to the community.

The remaining resources would be left to the community to finance competences; then the Catalan institutions would make an undetermined contribution to common solidarity for the time being, and finally the State would provide Catalonia with resources to finance its exclusive competences, such as prisons or the Mossos d'Espadra.

• Termination of existing funds and advances

The initial design of this financing model implies the disappearance of funds from the current system of march, such as compensation or competitiveness, which, in the view of the Generalitat, distort the distribution of resources.

Similarly, once this system has been applied, in theory, the mechanisms for anticipating money to Catalonia would disappear.

• An unspecified system that includes the tax basket

The system is based on the fiscal capacity of the territories and is based on the definition of a tax basket, that is, a percentage of each tax corresponding to Catalonia, which will be derived from Catalonia's contribution to the expenditure of the State and based on "objective and verifiable criteria".

From this basket, a balance would be applied to contribute in solidarity to the welfare of other territories.

Lastly, the model provides for additional funding for the specialities of Catalonia in the field of exclusive competences.

• A model with no implementation date at the moment

For the time being, the Spanish Government and the Generalitat have only agreed on the basis of the model, a purely explanatory scheme of how it would theoretically work, and have therefore not set a deadline for its implementation.

According to the Catalan Government, the Spanish Government should propose a new model to the Fiscal and Financial Policy Council, while at the same time amending various state laws in Congress, such as those on autonomous financing or the transfer of taxes.

Catalan Government sources have stressed that they have taken the "first step" towards obtaining special funding, but have recalled that the final implementation will depend on having a parliamentary majority in Congress.