Spain requires multinationals to publish first public country-by-country tax report

Spain has introduced a new tax transparency obligation for large multinational groups with the publication of a public country-by-country report (CbCR) setting out detailed corporate tax report.

Who is affected?

This obligation applies to multinational groups whose consolidated net annual turnover exceeds €750 million in each of the last two consecutive financial years. Where this threshold is met, the legislation distinguishes between the groups depending on the characteristics of the ultimate parent company:

• If the parent is subject to Spanish law, it must prepare and publish the group's consolidated report.
• If it is not subject to Spanish law but is established in the EU, the obligation falls to the parent company in accordance with its own national legislation.
• If the parent is established outside the EU, the obligation falls to the Spanish subsidiary or branch, unless it is deemed a "small entity" under the applicable regulatory thresholds, or where the parent itself already prepares and publishes the information, designating an EU subsidiary or branch to file it with the Commercial Registry together with the annual accounts. Where the ultimate parent company does not provide the necessary information to the subsidiary or branch, the report must still be published with the data available, together with a statement indicating that the parent company has not made the required information available.

Publication deadlines

The report must be approved and published within six months of the end of the financial year and remain accessible on the website for at least five consecutive years. It must also be filed with the Commercial Registry together with the annual accounts.

For groups whose financial year follows the calendar year, the first financial year affected will be 2025, with a publication deadline of 30 June 2026 and filing with the Commercial Registry expected around 31 July 2026.

This six-month deadline is more strict than that provided for in Form 231 (the CbCR that the groups subject to this obligation were already submitting confidentially to the Spanish tax authorities), so tax teams will need to plan ahead for data collection.

Most EU member states opted for the maximum 12-month deadline allowed by the directive from which this obligation comes from. This has practical consequences: according to Spain's Institute of Accounting and Auditing of Accounts, where the reporting entity is the parent company of another member state, the report will be published within the timeframe set by its national regulations, often twelve months, without the Spanish subsidiary thereby incurring any breach of compliance.

What information must be published?

The report must contain virtually the same information as Form 231, although not all of its items. Specifically, it must include a brief description of the nature of the activities, revenues, profit or loss before income tax, income tax accrued for the current year, tax payable, stated capital, accumulated earnings and the number of employees.

The main difference from Form 231 lies in how the information is presented. Form 231 breaks down the data individually for each tax jurisdiction. The public CbCR requires it to be presented by an EU member state, with a separate breakdown for blacklisted territories and for territories that were on the grey list as at 1 March of the current financial year and 1 March of the previous financial year, grouping the rest of the world into a single category.

As for calculating the line items, groups may use the same criteria as Form 231, which means tax teams can rely heavily on work already carried out for confidential submission to the Spanish tax authorities.

However, there is a significant difference in format. The report must comply with the common template and the electronic formats established by the European Commission. This template takes the form of a table with predefined columns. It is, however, permitted to publish additional information alongside this table, though not in place of it, whether in the form of text, images or other formats, which affords a degree of flexibility. The formats must be machine-readable to ensure comparability between the reports of different groups.

Can any data be omitted?

The regulations allow specific data to be omitted where its publication could cause serious harm to the group's commercial position, provided that the omission is reasonably justified in the report itself and the omitted data is published within five years. The scope of the provision is limited: it does not apply to blacklisted and grey-listed territories.

What happens if the group fails to comply?

No specific penalty regime has yet been approved. However, non-compliance may directly affect a group's reputation on tax transparency. The members of the parent company's board of directors are collectively responsible for ensuring that the report is published and filed correctly. The report must also be filed with the Commercial Registry together with the annual accounts, so its absence could cause difficulties in the filing process.

Osborne Clarke comment

The public CbCR represents a further step in the growing trend towards greater tax transparency for multinational groups and increasingly detailed regulation on how this should be implemented.

Spain's choice of a six-month publication deadline is notably shorter than the 12-month period envisaged by most EU member states and significantly brings forward the preparation of the report placing additional pressure on entities required to publish in Spain.

There are further considerations regarding the content. Given that the report is based on the Form 231 framework, its content does not always accurately reflect the group's tax reality. Nevertheless, it must be published in a pre-established format and made publicly accessible as determined by the European Commission. Groups do, however, have the opportunity to contextualise and clarify the published data in the additional information that may be included alongside the mandatory template.