B Law & Tax
25 April 2023

Tax advisor: Multinationals in Spain pay an effective tax rate of 21.8%.

In 2020, the 126 Spanish multinationals with a turnover of over €750 million paid an average of 24.77% in corporate income tax. Although the tax rate in Spain was 21.8%, in the rest of the European Union the rate was 29.03%, a difference of more than seven percentage points.

Effective rate

The average effective rate paid by Spanish multinationals is very different from one company to another. Of the 126 companies that make up this group, 31 of them paid only an effective levy of 1.75% of profits: 88 million euros in 2020 out of a net amount of 5,043 million.

More than half of these multinationals had to pay an effective levy of less than 20% of profits. However, there are 43 other business groups with an average tax rate of 42.51%, which paid more than €8.5 billion on a profit exceeding €20 billion.

Distortion

All these statistical data do not take much account of the losses of multinationals, which for the Tax Agency means a distortion of the amounts reported. The report made by the OECD obliges multinational companies in Spain with an annual turnover of more than 750 million euros to present complementary data covering all their activity, both in their main headquarters and in any subsidiaries they may have. These data refer to turnover, number of employees and subsidiaries, profits before taxes and amount paid in each territory.

Other countries

The Tax Agency has presented data that allow a breakdown by jurisdiction of the corporate taxes paid by large multinationals. According to these data, of the 12,501 million paid worldwide, approximately 4,300 million euros went directly to Spain. In the other 26 EU countries, almost 6 billion were paid, while just over 1 billion were paid in the rest of Europe and 4.8 billion in the Americas. Within the EU, most of the taxes went to Germany with 343 million and Poland with 311 million. Portugal received a further 257 million euros and the Netherlands some 198 million. Multinationals also paid €37 million in Luxembourg and €20 million in Ireland, both considered low tax territories.

B Law & Tax International Tax & Legal Advisors.

 https://www.blaw.es/

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