Spain

Over the past year, the following significant amendments have been made to Spanish law on the taxation of companies:

• Royal Decree-Law 5/2023, which was enacted on 28 June, through which measures to respond to the economic and social consequences of the war in Ukraine and to support the reconstruction of the island of La Palma and other situations of vulnerability were adopted and extended, and the EU Directives on structural modifications of trading companies and the work/life balance for parents and caregivers were transposed, ensuring the execution and compliance with European Union Law. The most important measures contained in this legislation that affect the corporate taxation are:
  
  
  • An accelerated depreciation system is introduced in CIT for the installation of systems to charge batteries for plug-in electric vehicles provided that they come into use in tax years 2023, 2024 and 2025.
  • The tax benefits foreseen for the island of La Palma as regards business tax and real estate tax are extended until 31 December 2023.
  • The extension until 31 December 2023 of the 0% VAT rate applicable to basic food products and the 5% VAT rate  on olive and seed oils, as well as pasta.

Law 13/2023 which was enacted on 24  May, amending the General Tax Law,  because of the transposition of EU Directive 2021/514 as well as other tax laws, was published in the  Official State Gazette on 25  May 2023. The main amendments included in this law that affect the corporate taxation are the following:

• The deductibility of financial expenses for corporate income tax purposes is modified with effect for tax periods beginning on or after 1 January 2024.

The amount of net deductible financial expenses in the tax period is generally reduced to 30% of operating profit (financial expenses of less than EUR 1 million being deductible regardless of the 30% limit).  Because of this amendment, revenues, income or expenses that have not been included in the corporate income tax base will not be considered in the determination of  operating profit.

Additionally, the limitation of the financial expense rule  is amended to exclude from its non-application mortgage securitization funds and asset securitization funds.

• Several amendments are included in the mutual agreement procedure regime contained in the non-resident income tax law.
• As regards VAT, the most important amendments are the following:
  •  With effect from 26 May 2023, the use and enjoyment rule, that allows taxation in the Spanish territory of application of the tax (TAI) of those services carried out outside the Autonomous Community, but whose effective use occurs in the Autonomous Community, is amended to exclude its application to financial and insurance transactions between entrepreneurs.The aim of this amendment is to guarantee VAT neutrality and  competition in these strategic sectors of the Spanish economy on equivalent terms to the other sectors of economic activity excluded from the application of this rule.

• • The import regime for electronic commerce (IOSS) is amended to allow entrepreneurs and professionals who have the headquarters of their economic activity in the Canary Islands, Ceuta or Melilla to benefit from this regime without the need to have a representative established in the Autonomous Community.
  • Some modifications are included in the non-customs deposit regime for products subject to excise duties.
•  Additionally, several amendments are introduced to the General Tax Law, specifically:
  • Council Directive (EU) 2021/514 of 22 March 2021, amending Directive 2011/16/EU on administrative cooperation in the field of taxation, known as DAC 7 is transposed and a new reporting obligation is introduced for digital platform operators. A penalties regime is also established for non-compliance with information, due diligence and registering obligations. Communication obligations concerning  the information collected from sellers and storage obligations regarding  supporting documentation are also introduced.
  • As regards DAC 6, the legal regime governing the reporting obligation on cross-border tax planning mechanisms is modified as a consequence of the signing by Spain of the Multilateral Agreement between Competent Authorities on the automatic exchange of information regarding Common Reporting Standard circumvention arrangements and opaque offshore structures and Standards for Mandatory Reporting to address circumvention of the Common Reporting Standard and opaque offshore structures within the OECD. The amendment aims to enable the Spanish Tax Administration to have the necessary information to proceed with the exchange of information.
  • The reporting obligations between individuals are amended to comply with EU Court jurisprudence. In this regard, the regime governing reporting obligations for certain tax planning mechanisms is amended to exempt certain intermediaries from the reporting obligation on the grounds of professional secrecy.
    
    Intermediaries will need to communicate to individual taxpayers that they will provide the Tax Authorities with information related to them and that such information will be transferred according to Directive 2011/16/EU and international agreements in order to guarantee the exercise of the right to the protection of their personal data.
  •  The obligation to report information on cross-border tax planning mechanisms is clarified to include as obligated parties  persons or entities that are considered intermediaries or interested taxpayers, according to the Multilateral Agreement between Competent Authorities on the automatic exchange of information.

• •  Reporting and due diligence obligations relating to financial accounts in respect of mutual assistance are clarified in order to guarantee the exercise by individuals of the right to the protection of personal data regarding existing information obligations.
  • The possibility of carrying out common tax audits with the tax authorities of different member states is introduced in relation to mutual assistance among the tax authorities of different Member States. 

• • The procedure to correct self-assessments is amended, implementing a unique system to rectify, complete or modify the self-assessment previously submitted, regardless of the result of the same.
  • The tax administration’s powers in limited verification procedures are extended. In this regard, it will be possible to check the accounting records to verify that they are consistent with the information in possession of the tax authorities. Additionally, it will be possible to require third parties to provide supporting documentation to verify the accuracy of the information in possession of the tax authorities.
  •  Corporations or entities will be obliged to communicate to the Spanish tax authorities their beneficial owners in accordance with anti-money laundering legislation.

Law 9/2023 which was enacted on 3 April, amends Law 12/2002, of 23 May, which approved the Economic Agreement with the Autonomous Community of the Basque Country, was published in the Official State Gazette on 4 April 2023. The main amendments included in this law that affect corporate taxation are the incorporation of 2 new taxes: the Tax on Financial Transactions and the Tax on Certain Digital Services:

• The Tax on Financial Transactions will be governed in the Historical Territories by the same substantive and formal regulations established  by Central Government.
  The taxpayers  subject to this tax will pay tax to both Administrations in proportion to the volume of operations carried out in each territory during the assessment period.

This proportion will be determined based on the percentage that the taxable base of the Tax corresponding to operations related to shares of companies with registered office in common or provincial  territory represents with respect to each taxpayer’s total taxable base.

The inspection will be carried out by the competent Tax Administration by reason of the territory in which the taxpayer has his tax domicile.

•  The Tax on Certain Digital Services will be governed in the Historical Territories by the same substantive and formal regulations established by Central Government from time to time.

The taxpayers subject to  tax will pay both Administrations in proportion to the volume of digital services rendered in each territory.

The provision of digital services will be understood to be carried out in common or regional territory depending on the place where the users are located.

The inspection will be carried out by the competent Tax Administration by reason of the territory in which the taxpayer has his tax domicile.

• Likewise, the wording regarding VAT has been modified in order to adapt it in relation to cross-border electronic commerce.

Law 38/2022, passed on December 27, on the establishment of temporary energy taxes and taxes on credit institutions and financial credit establishments and creating the temporary solidarity tax on large fortunes and amending certain tax rules, was published in the Spanish Official Gazette on December 28, 2022. The main measures contained in this Law regarding corporate taxation are the following:

• For tax periods starting in 2023, the taxable income of tax groups for CIT purposes will not be the sum of the taxable income of each of the companies forming the group but the sum of all the positive taxable income and 50% of the negative taxable income of such entities. Unused negative taxable income will be recovered in equal parts during the first ten tax years starting on or after 1 January 2024.

If the entity that generated the negative taxable income ceases to form part of the tax group, the group will be the one to continue recovering the unused negative taxable income.

If the tax consolidation regime no longer applies or the group ceases to exist, the unused negative taxable income will be fully recovered in the last return filed by the tax group.

• Regarding tax credits for investments in cinematographic productions, audio-visual series and live performances of performing and musical arts, the limit for tax credits related to the cinematographic production of Spanish and foreign audio-visual series is increased to EUR 20 million. Previously, this limit was EUR 10 million. In the case of audio-visual series, the tax credit will be determined per episode and the limit will be EUR 10 million for each episode produced.

The tax credit for investments in cinematographic productions, audio-visual series and live performances of performing and musical arts is amended effective for tax periods beginning on or after January 1, 2021. The purpose of this amendment is to provide a tax credit for the taxpayer who finances some or all of the production costs of Spanish feature films and short films, audio-visual series and live shows of performing and musical arts (as well as the cost of obtaining copies, advertising and promotion at the expense of the producer, up to a limit of 30% of the production costs), regardless of whether the contribution to financing is made before or after the producer incurs the production costs.

This tax credit will not be applicable when the taxpayer participating in the financing and the taxpayer who generates the tax credit are related entities.

The taxpayer participating in the financing will have a joint limit for the application of the deduction of 25% (or up to 50% in certain circumstances).

• Two new temporary levies are established for financial years 2023 and 2024. During the last quarter of 2024, the Government will study the effects of these two levies and will consider whether to make them permanent.
   
  • The temporary levy on energy will be charged to the main operators in the energy sectors and to individuals or entities involved in crude oil or natural gas production, coal mining or oil refining in Spain, with certain exemptions. The levy will be 1.2% of the net turnover derived from the activity carried out in Spain for the year before the one in which the payment obligation arose, paid in advance. It will not be considered a deductible expense for CIT purposes. The levy may not be economically passed on, either directly or indirectly.

In the case of tax groups for CIT purposes, the net turnover considered will be the sum of the turnover of the group’s member entities.

• • The temporary levy on credit institutions and financial credit institutions applies to credit institutions and financial credit institutions operating in Spanish territory whose sum of interest income and commissions for the year 2019, determined in accordance with their applicable accounting regulations, is equal to or greater than EUR 800 million.

In the case of tax groups for CIT purposes, the income considered will be the sum of the income of the group’s entities. The levy will be 4.8% of the sum of the net interest income and commission income and expenses derived from the activity carried out in Spain, payable in advance. The levy will not be considered a deductible expense for CIT purposes and may not be economically passed on.

Royal Decree-Law 20/2022, of December 27, on measures to respond to the economic and social consequences of the war in Ukraine and to support the reconstruction of the island of La Palma and other situations of vulnerability, was published in the Official State Gazette on 28 December 2022. The main measures contained in this Law regarding corporate taxation are the following:

• The following measures are extended until 31 December 2023:
   
  • the reduction to 5% of the VAT rate on all components of the invoice for deliveries of natural gas, biomass briquettes or 'pellets', and firewood used as fuel in heating systems. In relation to this measure, a new rate of equivalence surcharge, amounting to 0.625%, is introduced on the sale of these products.
  • the application of the VAT tax rate of 5% to certain electricity supplies until 31 December 2023, to reduce household electricity bills and the application of the 0.5% rate on the Special Tax on Electricity.
  • the temporary suspension of the tax on the value of electricity production.
• With effect from 1 January 2023, the following temporary and extraordinary measures are introduced to contain food prices. These measures will be in force until 30 June 2023, subject to the annual evolution of the year-on-year core inflation rate:
  •  VAT on basic food products such as bread, bread-making flours, milk, cheese, eggs, vegetables, fruit, legumes, tubers, and cereals considered as natural products is reduced from 4% to 0%.
  • For these products, as long as the VAT tax rate of 0% is maintained, the rate of the equivalence surcharge applicable to these transactions will be 0%.
  • VAT rate on olive and seed oils, as well as pasta, is reduced from 10% to 5%. A new equivalence surcharge rate of 0.625% is introduced for these products, which will apply as long as the VAT tax rate of 5% is maintained. 

• The following measures in the area of the health crisis caused by COVID-19 are also extended until June 30, 2023:
  • The application of the 4% VAT rate to deliveries, imports, and intra-Community acquisitions of disposable surgical masks.
  • The application of the 0% VAT rate to intra-Community supplies, imports and acquisitions of certain goods and services necessary to combat the effects of SARS-CoV-2, as well as for the purposes of the special equivalence surcharge regime. 

• Certain tax benefits relating to the island of La Palma are extended.

Law 31/2022 approving the State Budget Bill for 2023 was passed on December 23 and published in the Official State Gazette on December 24, 2022. The main measures contained in this Law regarding corporate taxation are the following:

• For tax periods starting on or after January 1, 2023, a reduced CIT tax rate of 23% is introduced for companies whose turnover in the previous tax year was less than EUR 1 million. This reduced rate is not applicable to entities that are considered equity companies.
• For corporate groups, the turnover of all group companies must be considered for this purpose. Special rules apply for the first tax period in which an economic activity is carried out or short tax periods.
• An accelerated depreciation incentive is introduced in CIT for investments in new vehicles classified as FCV, FCHV, BEV, REEV or PHEV that are used for business purposes and that come into operation in tax periods starting in 2023, 2024 and 2025. These vehicles may be depreciated for tax purposes by applying the maximum depreciation rates in tables multiplied by 2. 

• The tax rates applicable to certain headings of the Business Activities Tax (BAT) are amended and some new groups are created.
• As regards local Capital Gains Tax on Urban Land, the maximum rates that apply to the value of the land when the tax accrues are amended.
• The most significant amendments to VAT are the following:
• An exemption system like the one for NATO armed forces is introduced for armed forces of other EU Member States.
• A reduced tax rate of 4% is introduced for sanitary towels, tampons, and panty liners and for condoms and other non-medicated contraceptives, which were previously taxed at a rate of 10% .
• The use and enjoyment VAT location rule is substantially limited for B2B services. It will only apply to insurance or financial services which do not generate the right to offset input VAT, and to vehicle rentals for the purposes of avoiding tax fraud.
• Mediation services in the name and on behalf of others, services provided electronically, and broadcasting and television services will now be subject to general VAT location rules (i.e., they will be taxed at destination).
• The use and enjoyment VAT location rule is extended and will apply to B2C supplies of intangible services to final customers not established for VAT purposes in the EU, when the consumption of the service takes place in Spanish VAT territory.
• The services to which this rule will apply include, amongst others, transfers of copyrights, licenses and other intangibles, transfers of goodwill, advertising services, consultancy services, data processing, translation services, insurance and banking services, rentals of movable property, access to gas and electricity services.

• Two new events are introduced in which the reverse charge mechanism applies:

 Supplies of plastic waste, scrap, or cuttings

• Used rags, twine, rope, or cordage

• In parallel, the reverse charge mechanism will no longer apply to taxable and non-exempt leases of real estate by non-established VAT taxpayers, to guarantee that service providers can take advantage of the general offset and refund regimes. Additionally, with the aim of stemming tax avoidance, the reverse charge mechanism will not apply to real estate leasing brokerage services provided by non-established taxpayers.
• To guarantee harmonisation with EU regulations, some technical amendments are introduced in relation to e-commerce. These amendments aim to better define the rules governing the place where intra-Community distance sales take place and the calculation of the limit for continuing to be taxed at source for these operations in the case of entrepreneurs who only have sporadic e-commerce operations. Regarding this limit, it is specified that for the application of this threshold the supplier must only be established in one Member State and the goods must be exclusively dispatched from the State of establishment.
• Also, the procedure for recovering the VAT on bad debts is amended to bring it more in line with EU law. The modification of the taxable base is now allowed for bad debts from bankruptcy proceedings declared by a court of another EU member state.

Additionally, the minimum amount of the taxable base of the operation is reduced when the defaulting recipient is considered an end consumer and the procedure is made more flexible by introducing the possibility of replacing the necessary prior judicial claim or the notarial summons with any other means that reliably evidences claim for collection from the debtor.

• The period for recovering VAT is also extended to six months from the time the debt is declared uncollectible.
• Certain amendments are introduced into VAT law to guarantee harmonisation and alignment with EU customs regulations and to strengthen the legal protection of operators.

• Regarding the Canary Islands General Indirect Tax, certain amendments are introduced to keep it aligned with VAT regulations. The amendments relate to the place of supply of certain services, the right to offset input VAT and alignment with EU customs regulations.
• A new special tax regime is introduced for the Balearic Islands, with effects for tax periods starting between January 1, 2023, and December 31, 2028. The regime is like the Canary Islands Investment reserve, but the tax incentive is more limited in the case of the Balearic Islands, as the Canary Islands are considered an ultra-peripheral region and the incentive is considered a form of authorised State Aid.

As in the case of the Canary Islands, the incentive will apply to Spanish Corporate Income taxpayers and Spanish Non-Resident Income taxpayers with permanent establishments in the Balearic Islands. 

The CIT taxable base is reduced by an amount equivalent to the amount allocated to a special reserve for certain specific investments in the Balearic Islands, up to a limit of 90% of annual undistributed earnings for taxpayers with establishments in the Balearic Islands.

The application of this reduction may never result in negative taxable income. The reduction is incompatible, for the same goods and expenses, with the CIT tax credits to promote certain activities (R+D and technological innovation tax credits, tax credits for job creation, etc.) or with any other tax incentive or measure that is considered State Aid for EU Law purposes if the accumulated amount exceeds the applicable thresholds.

The amounts allocated to this special reserve must be invested in qualifying investments within three years (including that in which the reserve is established). Investments will be subject to certain maintenance requirements.

As in the case of the Canary Islands reserve, earnings from establishments in the Balearic Islands are those derived from business activities, including earnings from the transfer of the assets related to such business activities.

In turn, undistributed earnings are understood as those used to fund reserves, excluding legal reserves. However, neither the earnings derived from the transfer of assets whose acquisition would have determined the investment of this reserve, nor those derived from securities representing ownership in the capital or own funds of other entities, nor transfers of own capital to third parties are considered as such.

PIT taxpayers whose business activities are taxed under the direct estimation regime will also be entitled to a tax credit for the net operating income allocated to the reserve derived from business activities carried out in establishments in the Balearic Islands. The reserve must be invested in a qualifying investment within three years.

• Another special tax regime is introduced in the Balearic Islands for industrial, agricultural, livestock and fishing companies.

According to this regime, CIT taxpayers and NRIT taxpayers will be entitled to a tax allowance amounting to 10% of the gross income tax liability from the sale of tangible goods produced in the Balearic Islands that derive from industrial, agricultural, livestock and fishing activities.

This tax benefit can be applied by companies that are domiciled or have a permanent establishment in the Balearic Islands

The allowance is contingent upon maintaining the workforce. If the workforce increases, the incentive will be increased up to 25%.

This regime will also apply to PIT taxpayers in the same terms as it does to CIT taxpayers whose net income is determined by direct estimation.

• The two tax regimes mentioned above must comply with the provisions of European Union law as regards both the activities carried out and the limits on aid. 

• Certain amendments are introduced regarding the regulation of deferrals and instalments of tax debts.
•  As usual, priority patronage activities and tax benefits of public interest are set for the year 2023.
•  Legal interest for 2023 is fixed at 3.25% and default interest is fixed at 4.0625%.

Law 28/2022, passed on December 21 for the promotion of the ecosystem of emerging companies, was published in the Official State Gazette on 22 December 2022. The main measures contained in this Law regarding corporate taxation are the following:

• A more favourable regime is introduced for companies qualifying as start-ups for the purposes of this regulation. According to this regime, the tax rate for Corporate Income Tax and Non-Resident Income Tax (with a permanent establishment) is reduced to 15% in the first tax period in which the company obtains positive taxable income and in the following three periods, contingent upon maintaining the conditions to qualify as a start-up.
• Companies qualifying as start-ups may not need to file advance payment returns in the two tax periods following the first one in which the company obtains positive taxable income, provided that the company maintains the conditions to qualify as a start-up.
• The CIT or NRIT tax debt may be postponed in the first two tax periods in which the company obtains positive taxable income, with no need to provide guarantees or to pay default interest for a period of 12 months in the case of CIT and 6 months in the case of NRIT, as from the end of the voluntary filing period. For these purposes, the company should be up to date with its tax obligations and the return must be filed within the voluntary filing period.
• A company will be considered a start-up for the purposes of this law if the following requirements are met:
  
  
  • In general, it must be newly created or the public deed of incorporation must have been filed in the pertinent Commercial or Cooperative Registry no more than five years previously; or seven years previously for companies in the biotechnology, energy, industrial and other strategic sectors or companies that have developed their own technology, designed entirely in Spain.
  • It must not have arisen from a merger, spin-off, or transformation of companies that are not considered emerging companies. The terms “concentration” or “segregation” are included in the previous operations.
  • Companies/cooperatives must not distribute or have distributed dividends or returns.
  • It must not be listed on a regulated stock market.
  • Its registered office, company domicile or permanent establishment must be in Spain.
  • 60% of its workforce must have an employment contract in Spain. For cooperatives, for the sole purpose of this percentage, working members and partners with whom there is a corporate relationship count as part of the workforce.
  • It must be developing an innovative entrepreneurial project with a scalable business model. When the company belongs to a business group, the group or each member company of the group must meet the above requirements.
• Companies that meet the requirements qualifying as start-ups will not be entitled to the application of the tax benefits mentioned above when:

1. • The company ceases to qualify as a start-up or the five-year period or seven-year period from its incorporation has elapsed.
   • The company is extinguished.
   •  The company is acquired by another company that does qualify as a start-up.
   • The company’s net turnover exceeds EUR 10 million
   • The company carries out an activity that causes significant damage to the environment in accordance with Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020, regarding the establishment of a framework to facilitate sustainable investments and whereby which Regulation (EU) 2019/2088 is amended.
   • Holders of a direct or indirect interest of at least 5% of the share capital or the directors of the emerging company have been convicted via a final judgment of the types of offences envisaged by the Start-ups Law.

•  An obligation is introduced into the Spanish Audit Law for certain companies and branches to report on corporate or similar taxes for tax periods starting on or after June 22, 2024. The audit report will need to state if in the previous tax year the company was obliged to make public a report on CIT or any identical or analogous taxes and, if so, whether the report was actually made public in keeping with legal requirements:
  •  The ultimate parent company of a group subject to Spanish law that prepares consolidated annual accounts and whose net consolidated annual turnover on the year-end date has exceeded a total of EUR 750,000,000 in each of the last two consecutive years will be obliged to file this report. Companies that do not belong to a group and subsidiaries of entities subject to Spanish law whose ultimate parent company is not subject to the law of an EU member state but that exceed this threshold will also be subject to the reporting obligation. 

• • The company/group will no longer be required to report when the net turnover for the previous two tax years is less than EUR 750,000,000.
  •  The report must contain the name of the ultimate parent company or the entity that does not belong to a group, the tax year, the currency used and a list of the subsidiaries, if any. It must also contain a description of the company’s/group’s activities, the workforce, income, pre-tax profit or loss, the CIT or analogous tax due and paid and the reserves at the end of the tax year.
  •  The report should be approved and published within six months of the year end and filed with the Commercial Registry together with the annual accounts and must be available on the website for the next five years at least.
  •  Directors of the ultimate parent company or the entity that does not belong to a group will be collectively responsible for preparing, publishing, filing, and making the report accessible.

Royal Decree-Law 19/2022, of 22 November 22, published in the Official State Gazette of 23 November  and coming into force the following day, and which establishes a Code of Good Practices to alleviate the rise in interest rates on mortgage loans on primary residences declares the contractual novations of mortgage loans and credit facilities occuring under the new Code of Good Practices exempt from Stamp Duty (variable amount).

Law 22/2022, passed on 19 October , amending Law 28/1990, of 26 December, approving the Economic Agreement between the State and the Autonomous Community of Navarre, was published in the Official State Gazette on 20 October, 2022 and came into force the following day, with some exceptions. The amendments introduced by this law adapt the Articles of the Economic Agreement to the tax amendments carried out in recent years. The net turnover threshold to determine the competent Administration is updated from EUR 7 to 10 million.

Royal Decree-Law 18/2022, passed on 18 October , approving measures to reinforce the protection of energy consumers and to contribute to the reduction of natural gas consumption and measures related to the remuneration of the public workforce and protection of temporary drought-affected agricultural workers, was published in the Official State Gazette. The main measures contained in this Law regarding corporate taxation are the following:

• Tax relief is introduced in CIT consisting of the unrestricted depreciation of investments using energy from renewable sources that meet certain conditions. The investments may be freely depreciated in tax periods starting or ending in 2023. The facilities must be placed at the taxpayers’ disposal after the entry into force of this tax incentive, the entry into operation of the new facilities must take place in the year 2023 and the entity’s total average workforce must be maintained in relation to the average workforce in the previous 12 months for 24 months following the starting date of the tax period in which the acquired items enter into operation. Buildings and compulsory installations under the Technical Building Code regulations are not eligible for this regime.
• The maximum amount of the investment will be EUR 500,000.
• With effects for the tax years starting on or after 1 January 2022 new rules to tackle reverse hybrid situations are introduced as part of the anti-hybrid mismatch provisions transposed from the EU ATAD 2 Directive.

Law 18/2022, passed on 28 September, on the creation and growth of companies, was published in the Official State Gazette on 29 September 2022.

This law establishes the general rule governing the obligation of all entrepreneurs and professionals to issue, send and receive electronic invoices in their commercial relations with other entrepreneurs and professionals. This general rule will take effect as follows:

• For employers and professionals whose annual turnover exceeds eight million euros: one year after the enabling regulations have been approved.
• For all other entrepreneurs and professionals: two years after the enabling regulations are approved.

The entry into force of this amendment is contingent on the obtention of the EU exception to Articles 218 and 232 of Council Directive 2006/112/EC of 28 November 2006, on the common system of Value Added Tax.

Royal Decree-Law 17/2022, passed on 20 September, in which urgent measures are adopted regarding energy, in application of the remuneration regime for cogeneration facilities and in which the VAT rate for supplies of goods, imports and intracommunity acquisitions of certain fuels is temporarily reduced, was published in the Official State Gazette on 21 September 2022.

The most significant amendment that affect companies’ taxation is the reduction from 1 October 2022 to 31 December 2022 of the VAT applied to supplies, imports, intra-Community acquisitions of natural gas, and to supplies, imports and intra-Community acquisitions of briquettes and pellets from biomass and wood for firewood. The applicable VAT rate will be 5%.