Do tourist companies support a greater direct tax burden? The case of Spain

Most of the literature on tourism taxation focuses on indirect taxes, on their use as a policy to promote tourism or as a system for collecting and controlling revenue. This document addresses an issue which has thus far remained almost unexplored; the direct taxation of tourism through the corporate tax borne by companies in the sector. The proposed objectives are twofold: first, to verify whether direct taxation leads to an additional tax on the tourism sector, which compensates for the lower collection due to the application of reduced rates in indirect taxation; and second, to ascertain whether there are differences between the different subsectors of the tourism sector in this regard. For this, a random sample of 16,266 Spanish companies for the period 2014–2018 is used, taken from the SABI (Iberian Balance Analysis System) base. Results show that Spanish tourism companies are taxed above average, although less than most subsectors of the services sector, such that it cannot be said that there is compensation for the lower VAT tax burden. However, the exception is travel agencies, who bear a much higher levy on corporate tax whilst at the same time enjoying a special VAT regime.