The following is a summary of the most significant recently approved tax measures that will be effective for fiscal years 2024, 2025 and beyond.
1. GLOBAL MINIMUM TAX.
The Global Minimum Complementary Tax (“Pillar 2”), which aims to guarantee a minimum effective taxation of 15% in each jurisdiction in which large groups operate, will enter into force for periods starting from 2024.
The new tax will apply to business groups (national or international) with a presence in Spain that have a consolidated turnover of more than EUR 750 million in at least 2 of the 4 fiscal years (i.e. 2020 to 2023).
Its purpose is to ensure a minimum effective taxation threshold of 15% on a global scale. Therefore, a specific calculation must be made to determine whether this threshold is reached in each jurisdiction in which the group has a presence. If this threshold is not reached, a correction mechanism is activated based on: (i) the national top-up tax, (ii) the primary top-up tax, and (iii) the secondary top-up tax.
Finally, the first fiscal year affected by this regulation is 2024, although no tax return or self-assessment will have to be filed until 2026. Nevertheless, we recommend carrying out a review and anticipate the possible impact of this tax on the accounting and financial statements for the year 2024.
2. CORPORATE INCOME TAX.
- Capitalisation reserve
Effective from fiscal year 2025, the reduction percentage for the capitalisation reserve is increased to 20% (previously 15%).
In addition, new reduction percentages related to the increase in the workforce are introduced: (i) a reduction of 23% if the increase is between 2 and 5%; (ii) a reduction of 26,5% if the increase is between 5 and 10%; and (iii) a reduction of 30% if the increase is greater than 10%. This increase must be maintained for the following 3 years.
Finally, the limit on taxable income is increased to 20% (previously 10%). This limit will be 25% for companies with a net turnover (“INCN”) of less than 1 million in the previous fiscal year.
- Tax rates
The tax rate for Small Businesses will be reduced to 20% (previously 25%) and for Micro SMEs to 17% – 20% (previously 23%). Both reductions will be phased in between fiscal years 2025 and 2029.
The table below summarises the evolution of the tax rates:
- Depreciation exemption for investments in facilities using energy from renewable sources
The depreciation exemption for investments made between 2023 and 2025 in installations for (i) self-supply of electricity, or (ii) self-supply of heat, provided that they use energy from renewable sources and replace installations using energy from non-renewable fossil fuels, is extended until 2025. It should be noted that this incentive is linked to the maintenance of employment.
- NOLs limit for tax groups
The 50% limit on the use of net operating losses (“NOL”) within groups taxed under the special consolidation regime is extended for fiscal years 2024 and 2025.
- NOL Offsets, Insolvency Receivables Impairment, Double Tax Deductions and Reversal of Impairment of Investments
The measures declared unconstitutional in January 2024 will be reinstated with effect from 2024. These measures are:
- Limitation of the offsetting of NOLs and of the deductibility of receivables impairments due to insolvency: 50% of the tax base if the INCN is between EUR 20 million and EUR 60 million, 25% if the INCN is higher than EUR 60 million. The EUR 1 million franchise is maintained.
- Limitation of the deduction for international and domestic double taxation to 50% if the net turnover is higher than EUR 20 million.
- Mandatory minimum reversal of impairment of investments in other companies by third parties (fiscal years prior to 2013) pending reversal.
- Equity imbalance and reasons for liquidation
Exclusively for the purpose of determining the concurrence of the dissolution cause (i.e. equity imbalance), the losses of the fiscal years 2020 and 2021 will not be taken into account until the close of the fiscal year starting in 2026.
Although this is not strictly a tax measure, its impact is relevant for groups that consolidate for tax purposes, since the situation of an equity imbalance is a cause for exclusion from the group.
A similar regulation has also been approved for companies affected by the losses resulting from the effects of the DANA.
3. PERSONAL INCOME TAX.
- Increase in the savings tax rate
With effect from 2025 and subsequent fiscal years, the maximum tax rate on interest income will be increased to 30% (previously 28%) for income above EUR 300,000.
- Deduction for energy efficiency improvements in dwellings
The deduction for energy efficiency improvements in dwellings is extended until 2025. It should be remembered that the deduction ranges from 20% to 60% depending on the work carried out, with the deduction base capped at between EUR 5,000 and EUR 15,000.
- Deduction for the purchase of plug-in electric vehicles and the installation of a charging system
The deduction for the purchase of plug-in electric and fuel cell vehicles and the installation of charging points is extended until 2025. It should be noted that the deduction in both cases is 15%, with a deduction base limit of EUR 20,000 and EUR 4,000 respectively.
4. MUNICIPAL CAPITAL GAINS TAX.
With effect from 1 January 2025, the table of maximum coefficients applicable to the value of land for the period of generation are updated.
The summary table below shows the new coefficients:
We at Bové Montero y Asociados remain at your complete disposal for any questions or concerns you may have in relation to this or any other matter.
