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Finance Business Service

Spain increases the burden of the corporate tax

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The government of Spain declared growth of a budget income on December 2, that will increase tax revenues from corporations.

In spite of the fact that recently created government decided to leave the 25 percent corporate tax rate untouched, Spain will limit the corporate tax deductions. They will contribute the most part of 7 billion euros in the new income at which the government is aimed.

The Budget imposes new limits on loss carry backs and restrictions for use of the pecuniary losses connected with shareholdings in the companies located in "tax harbors or in the territories with not appropriate level of a tax" in number with other changes.

New measures of the corporate tax, as expected, raise the additional amount of 4.65 billion euros in revenue for the government.

Besides, real estate value will be updated for property tax to increase revenues. Also, the government intends to lift a number of "guilty" taxes, including on alcohol, tobacco, and sweet drinks.

Other changes are directed on modernization VAT and the fight against fraud VAT. It includes a new reporting system of the VAT in real time which announced in 2014. Taxpayers will be obliged to report about transactions for which it is necessary to draw up the sent or received amount, as a rule, within four days. Such system will cover 62000 largest Spanish taxpayers, including the large companies, groups, and also those who submit the documents VAT monthly. Therefore, will be covered entities which responsible for 80 percent of leviable deliveries on turnovers, with other taxpayers who are also able to use system voluntarily.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Сергей Панов
Author
managing partner
Finance Business Service