Alcabala
Encyclopedia
The alcabala or alcavala (alkaˈβala) was a sales tax
of up to fourteen percent
, the most important royal tax imposed by Spain under the Antiguo Régimen.
It applied in Spain itself and in other dominions ruled by Spain. The Duke of Alba
imposed a five percent alcabala in the Netherlands, where it played an important role in the Dutch Revolt
. Unlike most taxes in Spain at the time, no entire social classes were entirely exempt (for example, nobles
and clergy had to pay the tax), although from 1491 clergy were exempt on trade that was "not for gain." Certain towns were also, at times, given exemptions.
(22nd edition, 2001), the word derives from the Arabic
alqabála. Editions of the DRAE from 1956–1991 state that that Arabic word means a "contract" or "tax". The 1726 edition agrees that the word comes from Arabic, and gives two possibilities, preferring the one that corresponds closely to the current view. They cite Padre Alcalá as saying it comes from cabála or cabéle, to receive, collect or deliver. They offer an alternative from Sebastián de Covarrubias
, gabál, to limit or tax. In either case, these words would be preceded by the Arabic article
Al. The Arabic term alqabala or al qabála is essentially the same word as Kabbalah
.
The term is often used in the plural, las alcabalas, embracing also some other related taxes.
, a tithe
for the support of the Catholic Church, a substantial portion of which went to the Crown by virtue of agreements with the Holy See
.
The rate of the alcabala varied over time, from as low as two percent to as high as fourteen percent. It was by no means equally imposed everywhere: rates would differ in various parts of the empire, certain goods would be exempted from the alcabala (sometimes because they were considered subsistence goods, sometimes because they fell under a different tax), and tax farming
often led the royal treasury to contract with a city government or merchant guild to collect the tax in a particular geographical area and pay a fixed sum to the Spanish treasury. There were numerous specific exemptions such as (from the time of Philip II
onwards) horses and mules, hunting birds, and books.
Unlike a modern value added tax
, the full amount was (at least in theory) charged at each transaction so, for example, the same food could be fully taxed as grain, meal, and bread. Eventually, baked bread was exempted from the tax.
In 1341, the rate of the alcabala was five percent. It was doubled to ten percent in 1491 and reduced back to five percent in 1539. By 1793, in some places in peninsular Spain it had reached fourteen percent; it was reduced that year to seven percent.
It is not entirely clear what these rates meant in practice. It does not appear that the tax was consistently collected in full. For example, it appears the during the reign of Philip II, "small villages often paid as little as three-and-a-half per cent".
, so tax farming
was more or less inevitable. Because taxes in different jurisdictions were farmed out separately, and because rates were not equal everywhere, the tax location of a particular transaction was important. This could be tricky if, for example, a transaction was made in one place for delivery in another. The theory was that the tax was paid where the article finally came to rest; if goods were handed over at a different place to avoid payment, the fine could be four times the tax owed. There were rules requiring permission to move goods from one town or village to another.
Sellers were supposed to notify the tax farmer of transactions within two days and pay the tax to the alcabalero within three days after that, again on possible penalty of four times the tax owed. Sellers were allowed to make arrangements to pay a fixed, periodic tax instead of paying on each transaction. Buyers were also supposed to report, as a check on the sellers. If the seller was from outside the area, or was a cleric, priest, local council official or a powerful individual ("hombre poderoso"), the buyer was required to report the transaction in advance, and could be held liable if the seller did not pay the tax.
, it is known that in 1342 Alfonso XI of Castile
convinced the Cortes Generales
(the equivalent of a parliament) to make it a royal duty for Castile
. Originally the tax was specified to run for three years. According to at least some sources, in 1349 it was made perpetual. Other sources tell a more complicated story. For example, a 19th century Spanish legal dictionary says that in 1341 it was conceded to Alfonso for three years to defray the costs of the siege of Algeciras
, extended in 1345 to maintain the costs of frontier castles, further extended in 1349 for the siege of Gibraltar
and in 1388 for the war with Portugal
, finally becoming perpetual in 1393.
While Isabella I
considered applying the alcabala to Spain's American colonies as early as 1503, in fact it was not applied there until the late 16th century. It was imposed in Mexico
in 1574 and Peru
in 1591. Typically the capitulaciones (contracts) for those who set out to conquer territory for Spain gave them a certain period of exemption from the alcabala. For example, through the capitulación between the Crown and Francisco Pizarro
, Peru was supposed to be exempt from the alcabala for a century, though in practice the Crown did not wait quite so long.
The alcabala was a trigger for unrest in Quito
when it was first imposed there in the 1590s, and for the Quito Revolt in 1765. In the latter case, the viceroy of New Granada, told to increase revenues but apparently without any direct order from Madrid as to the means by which to do so, had given instructions to remove collection of the alcabala and the brandy monopoly from private tax-farmers and to have royal officials collect the tax directly. An increase to six percent in the late 1770s led to violence in the Viceroyalty of New Granada
(northern South America) in 1780–1781 and in Arequipa
(Southern Peru) in 1780. While these rates of six percent led to violence in the Americas, rates in the Americas were generally lower than in the Spanish mainland. This was the same era in which disputes over taxes were a major factor leading to the American Revolution
in what became the United States.
In the late 18th century, the alcabala generated 2.5 million pesos
annually in Mexico and about a quarter of that amount in Peru.
The alcabala was abolished in the Spanish tax reform of 1845
.
in Colombia and Venezuela
.
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
of up to fourteen percent
, the most important royal tax imposed by Spain under the Antiguo Régimen.
It applied in Spain itself and in other dominions ruled by Spain. The Duke of Alba
Fernando Álvarez de Toledo, 3rd Duke of Alba
Don Fernando Álvarez de Toledo y Pimentel, 3rd Duke of Alba was a Spanish general and governor of the Spanish Netherlands , nicknamed "the Iron Duke" in the Low Countries because of his harsh and cruel rule there and his role in the execution of his political opponents and the massacre of several...
imposed a five percent alcabala in the Netherlands, where it played an important role in the Dutch Revolt
Dutch Revolt
The Dutch Revolt or the Revolt of the Netherlands This article adopts 1568 as the starting date of the war, as this was the year of the first battles between armies. However, since there is a long period of Protestant vs...
. Unlike most taxes in Spain at the time, no entire social classes were entirely exempt (for example, nobles
Nobility
Nobility is a social class which possesses more acknowledged privileges or eminence than members of most other classes in a society, membership therein typically being hereditary. The privileges associated with nobility may constitute substantial advantages over or relative to non-nobles, or may be...
and clergy had to pay the tax), although from 1491 clergy were exempt on trade that was "not for gain." Certain towns were also, at times, given exemptions.
The term alcabala
According to the DRAEDiccionario de la lengua española de la Real Academia Española
The Diccionario de la lengua española de la Real Academia Española or DRAE is the most authoritative dictionary of the Spanish language. It is produced, edited, and published by the Real Academia Española ; the first edition was published in 1780...
(22nd edition, 2001), the word derives from the Arabic
Arabic language
Arabic is a name applied to the descendants of the Classical Arabic language of the 6th century AD, used most prominently in the Quran, the Islamic Holy Book...
alqabála. Editions of the DRAE from 1956–1991 state that that Arabic word means a "contract" or "tax". The 1726 edition agrees that the word comes from Arabic, and gives two possibilities, preferring the one that corresponds closely to the current view. They cite Padre Alcalá as saying it comes from cabála or cabéle, to receive, collect or deliver. They offer an alternative from Sebastián de Covarrubias
Sebastián de Covarrubias
Sebastián de Covarrubias was a Spanish lexicographer, cryptographer, chaplain and writer. He wrote Tesoro de la lengua castellana o española....
, gabál, to limit or tax. In either case, these words would be preceded by the Arabic article
Article (grammar)
An article is a word that combines with a noun to indicate the type of reference being made by the noun. Articles specify the grammatical definiteness of the noun, in some languages extending to volume or numerical scope. The articles in the English language are the and a/an, and some...
Al. The Arabic term alqabala or al qabála is essentially the same word as Kabbalah
Kabbalah
Kabbalah/Kabala is a discipline and school of thought concerned with the esoteric aspect of Rabbinic Judaism. It was systematized in 11th-13th century Hachmei Provence and Spain, and again after the Expulsion from Spain, in 16th century Ottoman Palestine...
.
The term is often used in the plural, las alcabalas, embracing also some other related taxes.
Rate and significance
The alcabala was the most important royal tax imposed by Spain under the Antiguo Régimen. The other tax of comparable importance was the diezmoDiezmo
The diezmo was a compulsory ecclesiastical tithe collected in Spain and its empire from the Middle Ages until the reign of Isabella II in the mid-19th century.-History:...
, a tithe
Tithe
A tithe is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes were required and paid in kind, such as agricultural products...
for the support of the Catholic Church, a substantial portion of which went to the Crown by virtue of agreements with the Holy See
Holy See
The Holy See is the episcopal jurisdiction of the Catholic Church in Rome, in which its Bishop is commonly known as the Pope. It is the preeminent episcopal see of the Catholic Church, forming the central government of the Church. As such, diplomatically, and in other spheres the Holy See acts and...
.
The rate of the alcabala varied over time, from as low as two percent to as high as fourteen percent. It was by no means equally imposed everywhere: rates would differ in various parts of the empire, certain goods would be exempted from the alcabala (sometimes because they were considered subsistence goods, sometimes because they fell under a different tax), and tax farming
Tax farming
Farming is a technique of financial management, namely the process of commuting , by its assignment by legal contract to a third party, a future uncertain revenue stream into fixed and certain periodic rents, in consideration for which commutation a discount in value received is suffered...
often led the royal treasury to contract with a city government or merchant guild to collect the tax in a particular geographical area and pay a fixed sum to the Spanish treasury. There were numerous specific exemptions such as (from the time of Philip II
Philip II of Spain
Philip II was King of Spain, Portugal, Naples, Sicily, and, while married to Mary I, King of England and Ireland. He was lord of the Seventeen Provinces from 1556 until 1581, holding various titles for the individual territories such as duke or count....
onwards) horses and mules, hunting birds, and books.
Unlike a modern value added tax
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
, the full amount was (at least in theory) charged at each transaction so, for example, the same food could be fully taxed as grain, meal, and bread. Eventually, baked bread was exempted from the tax.
In 1341, the rate of the alcabala was five percent. It was doubled to ten percent in 1491 and reduced back to five percent in 1539. By 1793, in some places in peninsular Spain it had reached fourteen percent; it was reduced that year to seven percent.
It is not entirely clear what these rates meant in practice. It does not appear that the tax was consistently collected in full. For example, it appears the during the reign of Philip II, "small villages often paid as little as three-and-a-half per cent".
Collection
The relatively limited administration of a 15th century government was ill-prepared to collect a sales taxSales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
, so tax farming
Tax farming
Farming is a technique of financial management, namely the process of commuting , by its assignment by legal contract to a third party, a future uncertain revenue stream into fixed and certain periodic rents, in consideration for which commutation a discount in value received is suffered...
was more or less inevitable. Because taxes in different jurisdictions were farmed out separately, and because rates were not equal everywhere, the tax location of a particular transaction was important. This could be tricky if, for example, a transaction was made in one place for delivery in another. The theory was that the tax was paid where the article finally came to rest; if goods were handed over at a different place to avoid payment, the fine could be four times the tax owed. There were rules requiring permission to move goods from one town or village to another.
Sellers were supposed to notify the tax farmer of transactions within two days and pay the tax to the alcabalero within three days after that, again on possible penalty of four times the tax owed. Sellers were allowed to make arrangements to pay a fixed, periodic tax instead of paying on each transaction. Buyers were also supposed to report, as a check on the sellers. If the seller was from outside the area, or was a cleric, priest, local council official or a powerful individual ("hombre poderoso"), the buyer was required to report the transaction in advance, and could be held liable if the seller did not pay the tax.
History
Although the origin of the alcabala is unclear, and it may have dated back to the era of Muslim ruleAl-Andalus
Al-Andalus was the Arabic name given to a nation and territorial region also commonly referred to as Moorish Iberia. The name describes parts of the Iberian Peninsula and Septimania governed by Muslims , at various times in the period between 711 and 1492, although the territorial boundaries...
, it is known that in 1342 Alfonso XI of Castile
Alfonso XI of Castile
Alfonso XI was the king of Castile, León and Galicia.He was the son of Ferdinand IV of Castile and his wife Constance of Portugal. Upon his father's death in 1312, several disputes ensued over who would hold regency, which were resolved in 1313...
convinced the Cortes Generales
Cortes Generales
The Cortes Generales is the legislature of Spain. It is a bicameral parliament, composed of the Congress of Deputies and the Senate . The Cortes has power to enact any law and to amend the constitution...
(the equivalent of a parliament) to make it a royal duty for Castile
Crown of Castile
The Crown of Castile was a medieval and modern state in the Iberian Peninsula that formed in 1230 as a result of the third and definitive union of the crowns and parliaments of the kingdoms of Castile and León upon the accession of the then King Ferdinand III of Castile to the vacant Leonese throne...
. Originally the tax was specified to run for three years. According to at least some sources, in 1349 it was made perpetual. Other sources tell a more complicated story. For example, a 19th century Spanish legal dictionary says that in 1341 it was conceded to Alfonso for three years to defray the costs of the siege of Algeciras
Algeciras
Algeciras is a port city in the south of Spain, and is the largest city on the Bay of Gibraltar . Port of Algeciras is one of the largest ports in Europe and in the world in three categories: container,...
, extended in 1345 to maintain the costs of frontier castles, further extended in 1349 for the siege of Gibraltar
Gibraltar
Gibraltar is a British overseas territory located on the southern end of the Iberian Peninsula at the entrance of the Mediterranean. A peninsula with an area of , it has a northern border with Andalusia, Spain. The Rock of Gibraltar is the major landmark of the region...
and in 1388 for the war with Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
, finally becoming perpetual in 1393.
While Isabella I
Isabella I of Castile
Isabella I was Queen of Castile and León. She and her husband Ferdinand II of Aragon brought stability to both kingdoms that became the basis for the unification of Spain. Later the two laid the foundations for the political unification of Spain under their grandson, Charles V, Holy Roman Emperor...
considered applying the alcabala to Spain's American colonies as early as 1503, in fact it was not applied there until the late 16th century. It was imposed in Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
in 1574 and Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
in 1591. Typically the capitulaciones (contracts) for those who set out to conquer territory for Spain gave them a certain period of exemption from the alcabala. For example, through the capitulación between the Crown and Francisco Pizarro
Francisco Pizarro
Francisco Pizarro González, Marquess was a Spanish conquistador, conqueror of the Incan Empire, and founder of Lima, the modern-day capital of the Republic of Peru.-Early life:...
, Peru was supposed to be exempt from the alcabala for a century, though in practice the Crown did not wait quite so long.
The alcabala was a trigger for unrest in Quito
Quito
San Francisco de Quito, most often called Quito , is the capital city of Ecuador in northwestern South America. It is located in north-central Ecuador in the Guayllabamba river basin, on the eastern slopes of Pichincha, an active stratovolcano in the Andes mountains...
when it was first imposed there in the 1590s, and for the Quito Revolt in 1765. In the latter case, the viceroy of New Granada, told to increase revenues but apparently without any direct order from Madrid as to the means by which to do so, had given instructions to remove collection of the alcabala and the brandy monopoly from private tax-farmers and to have royal officials collect the tax directly. An increase to six percent in the late 1770s led to violence in the Viceroyalty of New Granada
Viceroyalty of New Granada
The Viceroyalty of New Granada was the name given on 27 May 1717, to a Spanish colonial jurisdiction in northern South America, corresponding mainly to modern Colombia, Ecuador, Panama, and Venezuela. The territory corresponding to Panama was incorporated later in 1739...
(northern South America) in 1780–1781 and in Arequipa
Arequipa
Arequipa is the capital city of the Arequipa Region in southern Peru. With a population of 836,859 it is the second most populous city of the country...
(Southern Peru) in 1780. While these rates of six percent led to violence in the Americas, rates in the Americas were generally lower than in the Spanish mainland. This was the same era in which disputes over taxes were a major factor leading to the American Revolution
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
in what became the United States.
In the late 18th century, the alcabala generated 2.5 million pesos
Spanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
annually in Mexico and about a quarter of that amount in Peru.
The alcabala was abolished in the Spanish tax reform of 1845
Spanish tax reform of 1845
The Spanish tax reform of 1845 made major changes to the tax system of Spain, and established the basis for a system that continues to this day.- Context :...
.
Another use of the term
The term alcabala also refers to military checkpointsCivilian checkpoint
Civilian checkpoints or Security checkpoints are distinguishable from border or frontier checkpoints in that they are erected and enforced within contiguous areas under military or paramilitary control...
in Colombia and Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
.