Protect your Subsidiary in Spain from the Global Minimum Tax under Law 7/2024
Avoid penalties of up to EUR 30,000, shield your directors from liability and secure your tax credits with our specialised approach for Spanish subsidiaries of German, Austrian and Swiss corporate groups.
The deadline for validation in 2024 is limited
Any accounting movement at the end of this year without considering Pillar 2 may have irreversible consequences. Our specialised team is at your disposal to ensure your subsidiary’s regulatory compliance.
Pillar 2 compliance is a local risk, not just a corporate one
The entry into force of Law 7/2024 in Spain transforms the tax landscape for multinational groups with a turnover of more than EUR 750 million. Although the global strategy is defined at the parent company (UPE), the Spanish subsidiary assumes critical risks if it does not properly manage its local obligations:
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Economic and penalty risk
The specific penalty regime establishes fines of up to EUR 30,000 for formal violations, failure to submit forms (such as form 240) or providing incomplete data to the parent company. -
Liability of directors
Signing the annual accounts entails direct liability for the accuracy of the data reported in Pillar 2. Omitting information in the notes to the annual accounts may result in not fully positive audits and liability for lack of diligence. -
Loss of tax credits (DTA)
Incorrect management of the transition analysis may result in the permanent loss of the ability to provide compensation for loss carry forwards generated in previous years, impacting future tax burdens.
Comprehensive solutions for Spanish subsidiaries to comply with Pillar 2
Our service goes beyond reporting; we ensure the defence of the subsidiary’s interests in Spain before the Spanish Tax Agency (AEAT) in coordination with its parent company.
Validation of Transitional Safe Harbours
We analyse whether your subsidiary complies with the de minimis, simplified effective rate or routine profits tests. This allows for a drastic simplification of obligations, avoiding complex detailed calculations and reducing the Spanish Top-up Tax to zero during the transitional period.
Creation of the Defence File
The regulations require that supporting documentation be kept for the entire limitation period. We prepare a robust Defence File to protect the company from future inspections by the Spanish Tax Authorities, ensuring that the data in the CbCR is considered “qualified”.
Tax credit transition analysis
We carry out an expert study of your deferred tax assets (DTA) prior to the application of the tax. We ensure that the transition to the new system does not destroy the value of your historical tax credits.
Corporate reporting and formal compliance
We take care of the technical drafting of the tax remarks for the Notes to the Annual Accounts, the submission of form 231 and the validation of specific Top-up Tax returns (i.a. GloBE Information Return).
How we shield your subsidiary in 3 steps
Initial diagnosis
We assess the applicability of the Transitional Safe Harbours mechanism based on your CbCR and verify that the data is “qualified” according to Spanish regulations.
Execution and analysis
We prepare the necessary calculations, perform the DTA transition analysis, and draft the documentation for the accounting and tax closing.
Defence and storage
We prepare your Defence File and manage the submission of tax returns to the Spanish Tax Agency (AEAT), ensuring compliance with the “once out, always out” rule.
Tax Specialists in cross-border transactions
between Spain and Germany
The roots of our firm are advising German-speaking companies, in this field we are the leading firm in Spain. We understand the national laws for the implementation of Pillar 2 Germany, Austria and Switzerland as well as the Spanish regulations, which allows us to offer a unique competitive advantage:
- Direct communication: we communicate fluently in German and English with the tax departments of your parent company in Germany, Austria or Switzerland, facilitating technical coordination.
- Agility and efficiency: we offer a dynamic alternative to the bureaucratic structures of large consulting and advisory firms, with direct and personalised service.
- Independence: we prioritise the legal security of the local subsidiary, ensuring that global reporting does not compromise its tax situation in Spain.
Frequently asked questions about Law 7/2024
Why should I take action if my parent company already manages the Global Tax?
Even if the parent company performs the consolidated calculations, the Spanish subsidiary has its own reporting (Forms 240, 242) and communication obligations. If the reported data is not consistent with local accounting or the CbCR is not considered “qualified” for Spain, the subsidiary may not use the simplification mechanisms and is exposed to local inspections.
What happens if I do not apply the Safe Harbours in 2024?
According to the “once out, always out” rule, if you do not opt for the Transitional Safe Harbour in the 2024 fiscal year (even though you are eligible to do so), you will not be able to use this mechanism in 2025 or 2026, forcing the subsidiary to perform detailed calculations, which are much more complex and costly.
What is the Defence File and why is it mandatory?
It is the file that contains all the supporting documentation for the calculations and decisions made regarding the Top-up Tax. The regulations require it to be kept in order to demonstrate vis-à-vis the Tax Authorities that the requirements were met, especially if simplifications such as Safe Harbours were applied.
Does this affect my tax credits (loss carryforwards)?
Yes. The law requires a specific transition analysis for deferred tax assets recorded before the effective date. If this adjustment is not made correctly at the outset, the subsidiary could lose the right to use them to reduce the Top-up Tax burden in the future.