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January 12, 2022

Spain approves State Budget Bill for 2022

On 29 December 2021, Spain’s State Budget Bill for Fiscal Year (FY) 2022 (the Budget Bill) was published in the Spanish Official Gazette following its approval by the Spanish Congress and Senate.

The FY 2022 Budget Bill does not include as many tax changes as has been customary in previous years. This is largely due to the Anti-Tax Fraud Law that was enacted earlier in the year and introduced major reforms in various areas of the Spanish tax system (See EY Global Tax Alerts, Spain approves Anti-Tax Fraud Law, dated 16 July 2021, and Spain's amendments to CFC rules and participation regime may require action by multi-tier international structures under Spanish holdings, dated 1 December 2021).

The tax measures included in the Budget Bill are primarily aimed at increasing the tax revenues for FY 2022, with one measure standing out: the introduction of a minimum Corporate Income Tax (CIT) amounting to 15% of the taxable base for certain taxpayers.

Key highlights

Minimum Tax Payment

The Budget Bill introduces a minimum corporate tax (generally amounting to 15% of the taxable base) for tax periods starting on or after 1 January 2022. The taxable base is calculated as the accounting profit plus/minus book-to-tax adjustments (such as the disallowance or limitation of certain expenses, participation exemption, etc.).

This Minimum Tax Payment applies to:

  • Companies that had over €20 million in revenue during the 12 months preceding the start of the tax year.

  • Companies that are taxed as part of a tax unity (e.g., consolidated tax group), regardless of their revenue.

  • Foreign companies that obtain income through a Spanish permanent establishment and are subject to the Nonresidents’ Income Tax.

Specific minimum rates for the calculation of the minimum payment apply to newly created companies (10%) and financial institutions and companies taxed under the oil & gas regime (18%). The minimum tax does not apply to taxpayers taxed at 10%, 1% or 0% rates nor to Spanish real estate investment trusts (SOCIMIs).

The way this minimum CIT rate operates is that companies may not use credits and incentives (e.g., R&D tax credits) to reduce their income tax liability below the minimum tax threshold, except for foreign tax credits and certain tax incentives (bonificaciones), which must be applied first. In other words, the tax liability resulting from applying the general CIT rate to the taxable base and after the application of certain tax credits may not be below this minimum CIT liability. Unutilized tax credits due to this new rule may be carried forward.

Reduction of incentives for entities devoted to rental of residential property (EDAVs)

A special regime available for entities devoted to rental of residential property (Entidades Dedicadas al Arrendamiento de Viviendas) provides a tax incentive that reduces the CIT quota related to the qualifying net income from residential properties lease.

For tax periods beginning on or after 1 January 2022, the incentive will amount to 40% of the tax quota (previously 85%).

Delay interest

Delay interest for tax purposes is set at a 3.75% rate (same as for 2016 to 2021), effective until 31 December 2022.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Abogados, Madrid

Ernst & Young LLP (United States), Spanish Tax Desk, New York


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