Spain To Hike Corporate Tax Burden
The Spanish Government announced a revenue-raising Budget on December 2 that will increase the tax take from corporations.
While the recently formed Government chose to leave the 25 percent corporate tax rate intact, Spain will restrict corporate tax deductions. These will contribute much of the EUR7bn in new revenues the Government is targeting.
The Budget imposes new limits on loss carry backs, and restrictions on the use of losses linked to shareholdings in companies located in “tax havens or in territories that do not an appropriate level of tax,” among other changes.
The new corporate tax measures are expected to raise an extra EUR4.65bn in revenue for the Government.
In addition, property values will be updated for the immovable property tax, to boost revenues. The Government also intends to raise a number of “sin” taxes, including those on alcohol, tobacco, and sugary drinks.
Other changes are designed to modernize the value-added tax system and combat VAT fraud. This includes a new real-time VAT reporting system, which was announced back in 2014. Taxpayers will be required to report transactions for which an invoice has been issued or received, generally within four days. The regime will cover 62,000 of Spain’s largest taxpayers, comprising large companies, groups, and those that file VAT returns monthly. It will therefore cover businesses responsible for 80 percent of taxable supplies by turnover, with other taxpayers also able to use the system voluntarily.
Announcing the plans in 2014, the tax authority said the information will support tax enforcement efforts and ease tax return filing for taxpayers covered by the regime. Further, the compliance burden associated with the completion of VAT returns is to be substantially reduced through automation, it said.
Source: Tax News