Law 7/2024 (dated December 20, 2024), which implements the OECD’s Pillar Two global minimum tax as provided under the EU Minimum Tax Directive 2022/2523, was published in the official gazette on December 21, 2024, became effective on December 22, 2024, and applies to tax periods beginning on or after December 31, 2023.
- The new tax seeks to impose a global minimum effective tax rate of 15% in each of the jurisdictions in which large-scale groups (defined as those with consolidated revenues exceeding €750 million in at least two of the four fiscal years preceding fiscal years) operate.
- If the minimum effective tax rate in any given country falls below 15%, a top-up tax must be paid to align it with this minimum rate.
- The top-up tax is applicable to fiscal years beginning on or after December 31, 2023. For entities whose fiscal year coincides with the calendar year, 2024 will be the first year affected.
- The regulations implementing the top-up tax are expected to be approved in the near future (the provisional wording of which was disclosed in the public consultation phase). The future regulations will flesh out some of the aspects already provided for in the Pillar Two Law and will contain certain implementing or interpretative provisions deemed necessary for the tax’s effectiveness. The regulations will be followed by a ministerial order approving the relevant tax returns and self-assessments, and publication of any other formal obligations that may be applicable.
Read a January 2025 report prepared by the KPMG member firm in Spain that describes the new top-up tax
Law 7/2024 also includes amendments relating to:
- Corporate income tax
- Individual (personal) income tax
- Value added tax (VAT)
- Tax on the interest margin and commissions of certain financial entities
- Excise duties, including new tax on liquids for electronic cigarettes and other tobacco-related products
In addition, just days after the approval of Law 7/2024, the government passed Royal Decree-Laws 9/2024, 10/2024, and 11/2024 to incorporate further tax and other measures, some of which amend those introduced by Law 7/2024 itself.
Read a January 2025 report prepared by the KPMG member firm in Spain that discusses the additional amendments under Law 7/2024 and the subsequent Royal Decree-Laws