Confianz

Etiqueta: Impuesto Complementario

  • Tax strategies before and after an M&A

    Did you know that 40% of mergers and acquisitions fail due to undetected tax issues? A poorly planned M&A transaction can drag along millions in hidden liabilities, trigger the Complementary Tax, or clash with European regulations on legitimate economic purpose.

    The reality is stark. Ignoring these factors can turn your dream transaction into a financial nightmare. However, with the right tax strategy, M&A can be the perfect catalyst to accelerate your company’s growth.

    What to review before signing

    Tax due diligence

    The preliminary tax review should unravel critical risks such as buried tax debts, tax credits without solid documentation, and incentives applied without a real economic basis.

    In 2024, for example, a Spanish technology company had to return €2.3 million in R&D deductions incorrectly applied by the acquired company. The fine and interest doubled the initial impact.

    In 2025, the Supplementary Tax has added complexity. Your obligations are assessed based on the post-merger situation of the consolidated group. Two individually exempt companies may, after the transaction, be subject to this 15% tax on profits exceeding £20 million.

    The European filter that can stop your transaction

    The EU Anti-Tax Abuse Directive requires that all acquisitions have genuine economic motivation. A transaction motivated solely by tax benefits may be declared elusive. In Spain, the Treasury is applying this criterion with increasing rigour.

    Remember to document the commercial reasons for your transaction from day one. A solid business case will shield the transaction from tax scrutiny.

    Acquisition structure

    The choice between purchasing assets, acquiring shares or merging determines the treatment of capital gains, the inheritance of tax credits and the degree of exposure to tax liabilities. An intelligent structure minimises the immediate tax burden without mortgaging the future.

    After signing

    The SPA

    The purchase agreement must include dynamic adjustment clauses for tax contingencies and compensation systems. W&I insurance is now standard in transactions exceeding €10 million in Spain.

    According to KPMG (2025), more than 30% of SPAs include specific clauses on the Complementary Tax. The average cost of a W&I policy represents between 0.8% and 1.2% of the transaction value, but can save you up to 10 times that amount.

    Tax integration

    Once the transaction is closed, integration determines the final success. A poorly executed process can lead to tax duplication, trigger tax inspections and create loopholes that compromise the company’s image with investors.

    Successful integration requires unified filing of corporate income tax and consolidated VAT, consistent accounting criteria and centralised management of tax obligations.

    In complex transactions, we recommend setting up a «tax war room» during the first 90 days after closing to detect and resolve discrepancies in real time.

    In the world of M&A, tax is part of the strategic DNA of any successful transaction. Companies that understand this from day one turn tax planning into a competitive advantage.

    Our integrated approach designs tax-efficient structures, anticipates regulatory changes and executes transitions that protect the value of your investment.

    Are you planning an M&A transaction? The best decision starts with a conversation. Contact us and you will find in Confianz your strategic partners with more than 30 years of experience.

  • Impact of the Complementary Tax on Mergers and Acquisitions in Spain

    The impact of the Complementary Tax (Pillar 2) is a new tax figure affecting mergers and acquisitions in Spain. Since its implementation by Law 7/2024 of 20 December, this tax is levied on the difference between the 15% and the effective rate of taxation on profits in each jurisdiction.

    For those involved in M&A transactions, this tax is not just a technicality. It can change the valuation of a company, generate unexpected costs and complicate the tax structuring of a purchase or merger. Crunching the numbers before and after considering this tax is not the same. Let’s review the main problems it can bring and how to reduce risks.

    How Complementary Tax affects M&A

    The Complementary Tax applies to corporate groups with a consolidated turnover of 750 million euros in at least two of the last four financial years. What does this mean for companies in M&A? There are three possible scenarios:

    • Joining forces, but also taxes. Two companies that separately do not reach 750 million can exceed the threshold by joining forces. In that case, tax comes into play and changes the accounts.
    • One step further and under the radar. If a company is already close to that threshold, an acquisition can push it over the threshold and make it subject to the tax. That forces a rethink of the whole operation.
    • New rules. If the buyer is already subject to tax, adding a company in a jurisdiction with a tax rate of less than 15% may involve an additional payment. What appeared to be a profitable transaction may not be profitable if the calculation is not done properly.

    It is not just a question of accounting, but of strategy. There is no room for surprises in M&A.

    Fiscal due diligence.  Better to be safe 

    Due diligence deadlines are often tight, but this tax makes it more important than ever to scrutinise accounts closely. Some points to bear in mind:

    • Where every euro is. Not all jurisdictions are taxed equally. If the target company has operations in countries with a rate of less than 15%, it is necessary to calculate what impact this will have on the final bill.
    • Information in dribs and drabs. It is not always possible to obtain all the necessary documentation within the due diligence deadlines. If there is no transparency in the numbers, the risk skyrockets.
    • Future impact. If after the purchase the structure of the group changes, the tax rules may also change. And that means unexpected additional costs.

    Poor planning here can be costly. It is key that the seller has a detailed tax impact analysis ready before entering into negotiations.

    How to structure the operation to avoid surprises

    Avoiding problems with the Complementary Tax is not just a question of numbers, but of how the operation is designed from the start. Some useful strategies:

    • Clarify who pays what. In procurement contracts, it must be precisely defined who bears the fiscal responsibilities. It is not enough to assume this, it must be written down.
    • Price adjustments. If due diligence does not provide an accurate picture of the impact of the tax, clauses can be included to adjust the price according to the actual costs after the purchase.
    • Find the best structure. In some cases, making the purchase through an entity in a country with a tax rate higher than 15% may reduce the impact of the tax.

    An important detail: at present, guarantee insurances do not cover the risks arising from this tax if they have not been identified beforehand. There is no safety net if something goes wrong.

    Beyond theory, at Confianz we help companies to reduce risks and design structures that avoid problems with this tax. If you are in the process of M&A and want to avoid surprises, let’s talk and see how to approach the operation with clarity.