Since January 2024, Spain has been applying a new minimum supplementary tax of 15%, which is a crucial measure in the era of economic globalisation. It is especially aimed at large multinational companies and its purpose is to guarantee a minimum level of taxation at a global level.
An international initiative to combat tax evasion
In fact, the implementation of this new tax is part of an international effort to combat tax evasion by large companies and to establish a fairer tax framework at the international level. 138 OECD countries have reached a pact that in the EU has materialised through the 2022 Directive that all Member States must apply since 1 January.
In Spain, the Tax Agency has configured this tax as a new tax that complements corporate income tax.
830 companies affected in Spain
The new supplementary tax will be levied both on multinational companies and their subsidiaries in Spain and on large national groups with a turnover of 750 million euros or more in at least two of the last four financial years and taxed at a rate of less than 15%.
It is estimated that the new tax affects a total of 830 companies in Spain, both national and international. The vast majority, 707, are foreign multinationals with subsidiaries in Spain. 113 are Spanish multinational companies of which 41 are taxed below 15% (at an average rate of 6.21%) and 109 have subsidiaries abroad that are also taxed below 15% (average rate of 5.14%). In addition, the supplementary tax also affects 10 national groups that are taxed at an effective average rate of 9.2%.
How it works
While corporate income tax is levied on the taxable base, this new supplementary tax is levied on the accounting result. In other words, income minus expenses.
However, the Draft Supplementary Tax Bill allows for adjustments to reflect «the significant permanent differences that typically exist in most tax systems between accounting profit and the tax base of a tax on corporate profits».
The supplementary tax is configured through two taxes:
- The primary supplementary tax. This is the general rule or income inclusion rule. It is levied on multinationals or large groups based in Spain whose subsidiaries abroad are under-taxed.
- The secondary supplementary tax. This is the closing rule or insufficiently taxed profits rule. It establishes that in the event that a company has a parent company in a country that does not have this complementary tax, «Spain, as the country of residence of the Spanish subsidiaries of that foreign parent company, has the right to collect the complementary tax corresponding to the Spanish subsidiaries».
Entry into force and derogations
We said at the beginning that the supplementary tax came into force on 1 January last. This is true for the primary supplementary tax. However, in the case of the secondary tax it will enter into force for tax periods starting from 31 December 2024.
Furthermore, the Treasury recognises the complexity of this new tax and for this reason foresees the exceptional case of being able to get rid of the tax during 2023 and 2026 if certain requirements are met in the information contained in the country-by-country report.
Nor will the tax be applied during the first five years to groups undergoing internationalisation or to companies with a turnover in excess of 750 million and which therefore become taxable under the new tax.
The Confianz tax consultancy team can help you avoid errors in the application of this tax.