New minimum rate of Corporate Tax at 15%

The 2022 general state budget introduces a new minimum rate of Corporate Tax that will be set at 15% on the taxable base, a measure that has been justified by the government due to the need to harmonize corporate tax that, by the year 2023 , will be applied in 136 countries. The aim is to ensure that multinationals are taxed accordingly to their profits throughout the EU.

Which companies will be affected by the new minimum rate of corporate tax?

In Spain, this new minimum rate of corporate tax will only affect consolidated groups and companies that have a turnover of at least 20 million euros per year, with which it will only affect the 1% of the Spanish business fabric.

Currently, the effective average rate paid by this type of company in Spain stands at 21.5% on the tax base, according to what is included in the statistics of the Consolidated Annual Accounts of the IS published by the Tax Agency for the financial year of 2018.

Justification

Because this minimum rate of Corporate Tax will affect those companies with a turnover of more than 20 million per year, it is expected that it could affect technology giants such as Facebook or Google, since, let's remember, many of these companies are based in Ireland, where they are taxed at a rate of 12.5%, the lowest in all of Europe.

Since Ireland has adhered to this proposal, the tax rate will increase to 15%, thus having the same minimum corporate tax rate as the rest of the EU countries.

With this measure, it is intended to restructure the taxation of technological multinationals in this country in order to distribute the tax collection throughout the entire continent.

With this measure, it is expected to contribute to the state coffers some 400 million euros by the year 2023.

Necessary reform of the Corporate Tax

The current minister María Jesús Montero defends an urgent reform of the Corporate Tax, the main reason being tax credits (losses pending compensation from previous years), since a time limit is not established to effect compensation, as occurs with other taxes. .

Also, remember that the tax collects half that of 15 years ago, with which a tax reform is expected with special attention to this tax.

As always, it will be necessary to wait a few years to find out the impact of this measure, since on many occasions the estimates differ from the actual data.