Taxation and the circular economy in Spain: current situation and potentialities of the use of tax benefits

The transition to the circular economy (CE) implies a fundamental change in production and consumption. Its promotion requires coordinated action by different policies (e.g., environmental, regulatory, industrial, innovation, and public procurement) and especially, tax policies. The environmental orientation of fiscal instruments could be key to the transition to the CE and sustainability. This study analyses the current situation in Spain, noting the absence of tax benefit instruments that support the CE, and then identifies those that have the potential to promote the CE and sustainability. The paper shows the volume and diversity of these tax mechanisms, the cost in collection and the figures with the highest incidence, all of which have allowed us to highlight the potentialities, adversities and challenges shown by the policy of tax benefits in Spain for promoting the CE and sustainability.