B Law & Tax
21 December 2023

Tax Advisor: Spain strengthens 15% additional tax for multinational corporations: Advancement in international fiscal cooperation

The Council of Ministers has approved in the initial phase the Draft Law to transpose the European Directive that establishes a global minimum taxation level of 15% for multinational corporations and large national groups. This step follows the recommendations of Pillar 2 of the OECD’s BEPS program, aimed at combating the erosion of the tax base and profit shifting.

The objective of the draft is to align Spanish legislation with international agreements on taxation, led by Spain by establishing a minimum corporate tax rate for large corporations in 2022. The transposition of Pillar 2 reinforces this effort in collaboration with over a hundred countries.

The text aims to impose a global minimum level on multinational or domestic groups with a turnover exceeding 750 million euros in at least two of the last four fiscal years. This figure coincides with the requirement for country-by-country reporting introduced in 2015, marking progress in international fiscal cooperation.

However, the regulations exclude certain types of entities, such as public entities, international organizations, non-profit organizations, or pension funds, from the application of this global minimum tax, as established in the Directive.

 

Additional 15% Tax: Spain reinforces regulations for multinational corporations

The European Union Directive allows member states to implement an additional tax for multinational corporations or large national groups that, having their headquarters in the country, do not comply with a minimum tax of 15%. Spain has decided to apply this additional tax, which is structured in three complementary configurations:

  1. National supplementary tax: Aims to ensure that entities from multinational or national groups of great magnitude, established in Spain and without a minimum tax of 15%, reach this percentage through this tax. However, it does not affect the group if its taxation already exceeds 15%. It is compatible with the minimum 15% rate established in domestic legislation since 2022, although it differs by requiring a minimum tax of 15% on adjusted accounting income, uniformly applicable in all countries.
  2. Primary supplementary tax: Activated when the parent company of a multinational group in Spain earns income from foreign subsidiaries subject to a lower tax rate than 15%.
  3. Secondary supplementary tax: Acts as a closing mechanism when some companies in the multinational group earn income abroad that has not been taxed at 15%. Unlike the primary tax, it does not affect the parent company but taxes subsidiaries in Spain.

After the approval of the draft law in the initial phase by the Council of Ministers, the text will undergo review by advisory bodies before being ratified again by the Government and sent to Parliament. The final approval of the regulations will provide Spain with a more equitable, modern, and internationally aligned tax system.

 

 

 

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