Update about Spanish legal regulations

Spain has a provisional government since December of last year, so this financial year of 2016 have not been implemented any reforms yet. There are 2 key dates to explain this situation:

First of all, on December of 2015 Spain held general elections and after 6 months there was no agreement between political parties. Consequently, the past June were held elections again, but if there is not agreement before the end of October Spain will celebrate elections again, for third time in a year.

Meanwhile, in 2016 Spain has continued with the reforms planned for 2015. It should be pointed out that during this period with the provisional government, the acting minister of economy has established a minimum rate of payments of corporation tax in order to get the 8.000 million euros of fiscal adjustment planned for 2016 and 2017 by the current government. This fiscal adjustment is due to a threat of European Commission to Spain for the noncompliance of deficit. They are established a payment of 23% of the accounting result, a 25% for banks and oil companies, and it will be applicable to business that have a turnover of more than 10 million euros. Around 9.000 companies will be affected.

The effect of this measure on the cash flow of companies is significant as soon as the money is no longer in the pocket of the companies and is part of Spanish Tax Agency, so the private sector advances liquidity to the public sector.

Author: Cristina Valenzuela, Ceasa Asesores Fiscales, S.L.