SPAIN Trends and Developments Contributed by: Raúl Salas, Elena Ferrer-Sama and Cristina Cavero, RocaJunyent
RocaJunyent José Abascal Street, 56 6th Floor 28003 Madrid Spain
Tel: +34 619 015 251 Fax: +34 917 81 97 64 Email: r.salas@rocajunyent.com Web: www.rocajunyent.com/en/firm
The following provides some Spanish tax insights to be considered by any current or future investor in Spain. Pillar Two: GloBE Rules Implemented in Spain as of 2024 Following the BEPS and Pillar Two OECD Inclu - sive Framework initiative and Council Directive (EU) 2022/2523 of 15 December 2022 (the “EU Pillar Two Directive”), the Spanish Parliament approved Law 7/2024 of 20 December 2024, which implements a minimum tax level rule for both large multinational and domestic groups in Spain, meaning those with annual revenues of at least EUR750 million in at least two of the last four fiscal years. The Law implements the following: • as of 2024, a domestic minimum top-up tax (MNTT), according to which a Spanish company whose effective tax rate is below 15% will be obliged to pay the shortfall below that amount; • as of 2024, an Income Inclusion Rule (IIR), accord - ing to which the Spanish parent entity of a large group (either Spanish or a multinational enterprise (MNE)) is obliged to apply the IIR to its share of top-up tax relating to any foreign subsidiary of the group that is taxed below 15%; and • as of 2025, an Undertaxed Profit Rule (UTPR), according to which Spanish subsidiaries would collect any residual top-up tax of a group sister company in cases where the entire amount of top-up tax relating to low-taxed sister companies could not be collected by parent entities through
the application of either an IIR or an equivalent or qualified MNTT. The Law introduces reporting obligations and tempo - rary safe harbours for MNEs reaching the thresholds that force paying GloBE, and for those companies that have a given level of taxation that provides Country- by-Country (CbC) information and that have a reduced amount of turnover. Tax Inspections Over Mergers, Divisions, Partial Divisions, Transfers of Assets and Exchanges of Shares Carried Out Under the Neutrality Regime Provided for in Council Directive 2009/133/EC of 19 October 2009 As in all EU countries, the Spanish tax regime foreseen for these operations (the “Neutrality Regime”) does not apply when the main purpose of operation is to obtain a tax advantage without a stronger economic business reason. Spanish companies aiming to per - form such operations used to ask the Directorate Gen - eral of Taxes (DGT) whether or not their business case allowed for applying the Neutrality Regime. The DGT would analyse the transaction’s business case and confirm or reject the existence of sufficient grounds for the application of the Neutrality Regime, hence defer - ring the capital gains arising from a reorganisation. From 2023 and 2024, the DGT has changed its approach to these operations and no longer confirms the application of the Neutrality Regime, stating that it can only be confirmed in the course of a tax audit. Together with this, the Tax Inspectorate has taken advantage of the lack of certainty to challenge almost
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