Global minimum 15% tax for large corporate groups

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1. Creates a Top-up Tax that guarantees that the income of large multinational groups and large purely domestic groups pays at least 15% effective tax. If a jurisdiction taxes below that rate, an additional tax is charged up to the minimum.
2. It only applies to groups whose consolidated revenue is equal to or above 750 million euros in at least two of the four previous tax periods.
3. The tax has three forms: the domestic top-up tax (for entities located in Spain), the primary top-up tax (the Spanish parent answers for group entities abroad) and the secondary top-up tax (applies the undertaxed profits rule when the primary one cannot).
4. The tax base starts from each entity's accounting result, with adjustments, and is reduced by a substance-based income exclusion, calculated from the group's payroll costs and tangible assets in each jurisdiction.
5. There are reliefs to reduce burdens: if a jurisdiction's revenue and profits are very small (below 10 million and 1 million euros on average), the tax can be zero; it is also not charged when another jurisdiction already collects an admissible domestic top-up tax or safe harbor agreements apply.
6. Group entities located in Spain must file a detailed information return and a self-assessment; in some cases one entity acts as a substitute taxpayer. Filing late or with false data is punished with fixed fines of €10,000 per data item, capped at 1% of the group's revenue.
7. The law also creates the Tax on Liquids for Electronic Cigarettes and other Tobacco-related Products, which taxes vaping liquids, nicotine pouches and other nicotine products throughout Spain except Ceuta, Melilla and the Canary Islands.
8. It takes effect the day after publication in the official gazette, for tax periods beginning on or after December 31, 2023; the undertaxed profits rule applies to periods beginning on or after December 31, 2024.

Who it affects

• Large multinational and domestic groups with revenue of 750 million euros or more: They must calculate and pay the Top-up Tax if they are taxed below 15% effective in any jurisdiction, and file information returns and self-assessments.
• Credit institutions and financial credit establishments: They are subject to the new Tax on the margin of interest and commissions, with installment payments and self-assessment.
• Manufacturers, importers and sellers of vaping liquids, nicotine pouches and other nicotine products: They must register, provide guarantees and self-assess the new excise tax on these products.
• Consumers of e-cigarettes and nicotine products: The new excise tax makes these products more expensive, with rates of €0.10 to €0.20 per milliliter or gram.
• Companies and people donating to workers affected by the 2024 DANA flooding: Extraordinary amounts paid by employers between October 29 and December 31, 2024, up to the certified damage limit, are exempt from personal income tax and inheritance and gift tax.

Words worth knowing

Tipo impositivo efectivo (effective tax rate)

The real percentage of tax a group pays on its profits, calculated jurisdiction by jurisdiction.

Regla de inclusión de rentas (income inclusion rule)

Mechanism by which the group's parent entity pays the additional tax owed by group entities with low taxation.

Regla de beneficios insuficientemente gravados (undertaxed profits rule)

Backup mechanism: if the parent cannot collect the additional tax, other group entities located in Spain pay the pending share.

Exclusión de rentas vinculada a la sustancia económica (substance-based income exclusion)

Reduction of the tax base based on the group's payroll costs and tangible assets in each country, so real business activity is not taxed.

Sustituto del contribuyente (substitute taxpayer)

Group entity that, by law, files the return and pays the tax debt on behalf of other contributing entities.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries