On November 21st, the Spanish Congress approved, by a narrow majority, the Draft Law that establishes:
- A Complementary Tax to guarantee a minimum global tax rate for multinational and large national groups.
- A Tax on interest margins and commissions of certain financial entities.
- A Tax on liquids for electronic cigarettes and other tobacco-related products.
Through this Draft Law, the legislator also plans to include various tax modifications previously announced by the government.
Below are the main tax measures approved by Congress and sent to the Senate on November 28th to be debated until December 18th.
Approved Tax Measures
Complementary Tax
The complementary tax applies to large multinational groups with a turnover equal to or greater than 750 million euros. The tax will apply when the tax rate does not reach the minimum of 15% on the adjusted accounting result.
Limitations on Compensating Negative Tax Bases (BIN) in Corporate Income Tax (IS)
Effective from January 1, 2024, the limitations annulled by the Constitutional Court ruling on January 18, 2024, are reintroduced:
- 50% of the previous taxable base for companies with a Net Turnover (INCN) between 20 and 60 million euros.
- 25% for entities with an INCN over 60 million euros.
Reversal of Deductible Portfolio Impairments
The obligation to reverse deductible portfolio impairments before 2013 is reinstated.
Increase in the Capitalization Reserve Rebate
The rebate in IS for capitalisation reserve increases from 15% to 20% generally, and to 30% if specific staffing requirements are met.
Also, the maximum rebate increases from 10% of the taxable base to 20% and up to 25% for small businesses.
Temporary Limitation on Integration of Individual BINs in Consolidated Groups
Extension of the 50% temporary limitation until 2024 and 2025. Entities can reverse it within a 10-year period.
Progressive Reduced Rates in IS for Micro companies and SMEs
Progressive reduced rates of 17% and 20% are approved for micro companies (less than one million euros of INCN) and SMEs.
The application will be gradual with a progressive reduction during 2025-2029.
Increase in Personal Income Tax (IRPF) Brackets for Savings Income
Starting January 1, savings income over 300,000 euros will be taxed at 30%.
This increase will affect savings income from Spanish sources benefiting from the Beckham Law regime.
Special Taxes on Tobacco and Electronic Cigarettes
- Increases in the rates applicable to special taxes on tobacco.
- A new tax on electronic cigarettes and other tobacco-related products is implemented.
Tax on Interest Margins and Commissions of Financial Entities
A tax on interest margins and commissions of certain financial entities will replace the temporary levy on credit institutions.
Unapproved Tax Measures
- Elimination of the SOCIMI regime (Spanish REIT)
- Elimination of the exemption from the insurance premium tax for private health insurance
- Implementation of a tax on large inheritances
- Additional levy on luxury goods
- Increased VAT on tourist rentals
- Removal of VAT exemption on education services in private schools
- Implementation of an energy levy
If you have any questions regarding the new tax measures in Spain,
