Spain's Tax Agency sets €125m bonus for higher income and VAT collection

Tax Agency links €125 million bonus to increased IRPF and IVA revenue

The Spanish Tax Agency (AEAT) and unions have finalized the twelfth Special Plan for Intensification of Actions (Peia), an incentive worth up to €125 million for staff, fully payable if the agency collects €14.675 billion in 2025. Approximately €100 million is guaranteed, while the remaining €25 million depends on meeting all targets and available ministry funding. Participation is voluntary and open to all AEAT employees.

This mechanism is not new. Launched by Cristóbal Montoro in 2014 after anti-fraud efforts struggled in 2013, it has been renewed annually with minor adjustments. It was signed by SIAT, UGT, CSIF, CCOO, and CIG, who briefly threatened to walk out over pay disparities between groups and distribution criteria. Gestha, the technicians' union, did not sign, arguing that payments lack proportionality and that group A2 is underrepresented compared to inspectors.

Targets required to receive the bonus

The agreement sets two specific goals. For IRPF (personal income tax), net revenue must grow faster than employee compensation. For IVA (VAT), collections must exceed the projected nominal private final consumption rate. A payment is triggered in November if €13.382 billion is collected, and another if the target of €14.675 billion is reached by December 31.

The required figure is €427 million higher than the 2024 target but lower than what was achieved last year and below projections for both 2024 and 2025. Anti-fraud revenues totaled €14.7123 billion in 2023 on a comparable basis, although the AEAT publicizes a figure of €16.708 billion, including reductions from refunds and late self-assessment payments.

The Peia also reduces overtime requirements: from three hours to two in January-April, and from six to four in July-September, out of a total of twelve hours.

Incentive remains valid even if sanctions are overturned

The Spanish Association of Tax Advisors (Aedaf) warns that variable remuneration is unaffected if AEAT actions used to calculate it are later annulled or reduced, whether administratively or judicially. The association notes this practice is uncommon among neighboring tax authorities.

Madrid's Central Administrative Court No. 4, in a ruling dated July 22, 2022, upheld Aedaf's appeal, recognizing its right to information regarding productivity supplement regulations and application criteria. Additionally, a resolution from the Council for Transparency and Good Governance urged the publication of bonus criteria and noted the Agency had failed to respond to requests. The AEAT published reports on inspector incentives in September 2022, but not for staff in Management, Collection, Customs, and Special Taxes.

Origins of the productivity supplement

Productivity supplements at the AEAT are controversial due to their link to higher revenue collection. Senior officials and inspectors have received them since Felipe González's governments, as they lead tax campaigns and strategies. Since 2014, the Peia has extended similar incentives to all staff, tied directly to revenue performance.

Some argue the Peia is a sham that does not work as described: salaries and career pogre have been frozen for decades, and the supplement effectively hides payment for twelve extra hours of annual work, with senior groups taking the largest share. Other estimates suggest the incentive amounts to commissions of up to 10% of salary for both inspectors and non-inspectors. The detailed breakdown of who receives what, by group, is precisely what the Agency has avoided publishing.

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The paradox is hard to ignore: an agency that can pre-set the results measuring its own bonus, refuses to detail how it distributes the money, and keeps every euro even when courts overturn the sanctions justifying it. With such foundations, does anyone believe the issue is merely about the amount?