The Spanish Socialist Workers' Party proposes reform of Spanish corporate tax

Published on 22nd Mar 2024

The amendment follows a ruling that declared the Royal Decree-Law 3/2016 as unconstitutional

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The Spanish Socialist Workers' Party (PSOE) party has submitted a proposal to modify the bill that addressed the economic and social impacts of the conflicts in Ukraine and the Middle East and to mitigate the effects of the drought from Royal Decree-Law 8/2023 of 27 December.

This amendment was proposed after some of the measures implemented by the Royal Decree-Law 3/2016 on corporate tax were deemed unconstitutional on 18 January 2024, with the aim of "mitigating the loss of revenue resulting from the removal of these rules from the legal system".

Amendment measures

The amendment, published on 18 March 2024, aims to restore the critical measures impacted by the previous declaration of unconstitutionality. The amendment will reintroduce stricter limits for offsetting tax losses, reducing this  from 70% to 50% of the tax base for taxpayers with a turnover between €20 million and €60 million. Furthermore, for taxpayers with a turnover exceeding €60 million, the limit will be decreased to 25%.

Taxpayers whose net turnover exceeds €20 million can only avail of a 50% reduction in the tax paid by utilising deductions to avoid double taxation.

To ensure that impairment losses deductible for tax purposes before 1 January 2013 are reversed, any impairment losses that have not been reversed yet should be reversed. This reversal must be done in the first taxable period starting on or after 1 January 2024.

Furthermore, the PSOE plans to extend the measure until 2024, initially intended only for periods starting from 1 January 2023. This measure entails that the tax base of the tax group will be determined by considering only 50% of the individual tax losses of each entity that forms the tax group. By 2024, any tax losses that are not part of the tax base of the tax group will be divided equally into 10 parts and become part of the tax base of the tax group from 2025.

Osborne Clarke comment

We should stay vigilant towards any modifications made to the original wording presented by the PSOE, since it is an amendment to a bill being processed.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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