The establishment of a minimum effective rate of 15% in this tax for large companies, one of the protagonists of the negotiation of the budgets.
The establishment of a minimum effective rate of 15% in corporate tax for large companies has become one of the protagonists of the negotiation of the future budgets of 2022. But, what does this measure imply?
Is corporate tax going to go up?
The proposal being considered -which was already included in the failed accounts of 2019 and which appears in the government agreement- does not foresee modifying the nominal rate of corporate tax , which is currently 25% for all companies except banking and hydrocarbons, which is 30%.
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Why do you want to impose a minimum effective rate?
To guarantee a certain level of actual taxation that cannot be avoided with exemptions or deductions. The Government’s initial proposal is that this threshold be 15% for all companies and 18% for banking and hydrocarbons.
What effective rate do companies pay today?
In 2018, large Spanish companies -those that are part of groups and had a positive accounting result- paid an effective rate of 19.72% with respect to the tax base and 5.63% with respect to profit or accounting result.
What is the difference between tax base and accounting profit?
The accounting result or profit includes all the profits of the company, including dividends from its subsidiaries abroad, which have normally already been taxed in their respective countries. The taxable base, which is the one on which corporate tax is paid, is the result of making a series of adjustments to the accounting result (for example, with respect to deductible expenses), including eliminating foreign dividends that are fiscally exempt.
How will a minimum rate affect companies?
It depends on how the measure is articulated . If the minimum effective rate is established on the tax base, it will not have a great impact in practice, since the current effective rate is close to 20% on average, above the threshold of 15% that is to be established.
However, if the effective minimum rate is applied to the profit or accounting result , where the current average is just over 5%, it will mean a notable increase in the installment to be paid , since the profits obtained will also be computed to calculate that minimum. abroad, even if they have already paid taxes in those territories. The 2019 budget project provided for applying the minimum rate on the tax base, but United We Can has claimed on several occasions that it be on the accounting result.
What does the Government say?
The Vice President of Labor, Yolanda Díaz , has insisted in recent days on the need to include the minimum effective rate of 15% in the 2022 Budgets . However, the Vice President of Economic Affairs, Nadia Calviño , advocates delaying this measure for several reasons : waiting for the economic recovery to be consolidated, for the committee of experts for tax reform to finish its work and for the proposal for the OECD.
What is the OECD proposal?
Last July, 130 of the 139 countries that make up the OECD agreed to distribute part of the collection of multinationals among the countries where they operate and establish a minimum corporate tax rate of 15% globally.
So, is the OECD reform the same as the government?
No. _ Although in both cases the figure on the table is 15%, the concept is completely different. The Spanish proposal is an effective minimum rate with which it is sought to limit deductions and exemptions.
The OECD proposal is a global minimum rate , with which it is sought to avoid unfair tax competition in low-tax territories.
ow would the minimum rate work globally?
The objective is to guarantee that multinationals pay at least 15% of the type of companies – on a tax base that should be harmonized – in all the territories in which they operate, regardless of whether or not those territories join the measure.
To this end, it is established that if a company pays less than 15% in corporate tax in any of the territories where it operates, it will have to pay in the country where it has its headquarters the difference between what has already been deposited and what it would have had to pay. according to that threshold.
What does the OECD minimum rate proposal mean for Spain?
The OECD proposal is not mandatory , but if Spain decides to transfer it to its legal system, it would have to set the common tax base criteria for multinationals that earn more than 750 million.
