Spain to Hike Corporate Tax Take

     On December 2, 2016, Spain announced a revenue-raising budget that would increase the tax take on Spanish corporations.

     Although the corporate tax rate will remain at 25%, Spain will restrict corporate tax deductions. Additionally, the new budget will impose new limits on loss carry backs, and restrict the use of losses linked to shareholdings in companies located in tax havens.

     An additional significant burden to be implemented seeks to protect against value added tax fraud, while simultaneously modernizing the VAT. A new real time VAT reporting system will be implemented, in which Taxpayers will have four days to report transactions for which an invoice has been issued or received.

     These new corporate tax measures are expected to raise 4.65 billion euros in revenue for the Spanish Government.