Alcabala

The alcabala was an indirect tax that was paid to the treasury in a sale or exchange contract.

In other words, the alcabala was a mandatory collection sales tax, for this reason, it increased the price of the products it recorded.

In this sense, it can be said that the alcabala was the equivalent of the Value Added Tax (VAT). In addition, the tax could be extended to all types of property, for example, in the purchase or transfers of real estate and livestock.

Origin of the alcabala

This tax originates from the Middle Ages. It is commonly associated with the reign of Alfonso XI due to the need for income to support the siege of Algeciras.

However, there are documents that talk about this tax and that date from the 11th century, although without assigning the name, only the substance. Other writings where mention is made indicate that the alcabala dates from the 12th and 13th centuries, before the reign of Alfonso XI.

Furthermore, its technical precedents are not clear, some place it in Roman law and others in Muslim Spain.

Characteristics of the alcabala

In general, a value of 10% is associated with the alcabala. However, it did not always have the same value. Records indicate that it oscillated, approximately, between 5% and 10%, depending on the time.

The payment of this tax fell on the buyer, although the seller was responsible for the collection, as in the case of VAT.

Collection systems of the alcabala

There were three systems for collecting this tax:

• Direct administration: The collection was carried out by an official designated by the crown or by a local authority in representation of this. The person in charge of collecting this tax was called the alcabalero.
• Header: With this modality, other institutions assigned by royalty carried out the collection for the benefit of the kingdom. This right was granted temporarily.
• Lease: In this case, the responsibility for collecting the alcabalas was leased to an individual or group of individuals. It consisted of a contract between the Treasury and the merchant or group of merchants. In this contract, an estimated annual sum of the local taxation capacity was established.

Both in the heading as in the lease, the King transferred the right of collection to other local entities or individuals. It also meant transferring economic rights of the crown to third parties or local agencies. These pacts were carried out by signing a contract.