Pillar 2 Dashboard: Spain

On October 29, 2025, Order HAC/1198/2025, of October 21 was published in the Official Gazette. This approves the final versions of three specific Pillar 2 forms – Form 240 (registration), Form 241 (the GIR) and Form 242 (the top-up tax return).

On June 3, 2025, the draft Pillar 2 forms were issued for public consultation. This includes Form 240 (registration), Form 241 (the GIR) and Form 242 (the top-up tax return).

On April 29, 2025, Spain published Law No. 3/2025 of April 29, 2025 in the Official Gazette, which modifies the Economic Agreement with the Basque Country to adapt the agreement to Law No. 7/2024 of 20 December 2024 for the implementation of the Pillar 2 global minimum tax.

On April 2, 2025, Spain issued Royal Decree 252/2025 to approve the Regulations for the Global Minimum Tax. The Regulations include a number of aspects of the OECD Administrative Guidance. 

On December 21, 2024, Spain published law 7/2024 in its Official Gazette to transpose the EU Minimum Tax Directive. This includes an IIR and QDMTT from December 31, 2023 and the UTPR from December 31, 2024.

On December 19, 2024, Spain’s Parliament approved the law to transpose the EU Minimum Tax Directive.

On December 4, 2024, Spain issued a draft decree which includes Regulations for the application of the Global Minimum Tax Law. This is subject to a public consultation.

On December 19, 2023, Spain’s Council of Ministers approved a draft law to implement the EU Minimum Tax Directive. It was subject to a consultation and was then subsequently approved as a second draft by the Council of Ministers on June 4, 2024. On June 14, 2024, the Official Gazette of the Spanish Parliament published the text of the Bill.

GLOBE APPLICATION

General

As expected, the Law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation. As provided in the EU Minimum Tax Directive, the GloBE rules also apply to wholly domestic groups.

Whilst the Law is to implement the EU Minimum Tax Directive into domestic Law, it does not reflect most aspects of the OECD Administrative Guidance (either the February 2023, July 2023, December 2023 or June 2024 guidance issued). The April 2025 Regulations, do, however, include a number of these provisions.

The Transitional CbCR Safe Harbour, Transitional UTPR Safe Harbour and the QDMTT Safe Harbour are specifically included in the Law. It also refers to other safe harbours as agreed at the international level.

Law 3/2025, of 29 April, was published in the Spanish Official State Gazette on April 30, 2025. This amends Law 12/2002, of 23 May, approving the Economic Agreement with the Autonomous Community of the Basque Country and includes a new Article 20bis for the application of the Pillar 2 Global Minimum Tax, previously enacted in Spain in Law No. 7/2024 of December 20, 2024. The provisions apply from May 1, 2025.

The changes to the Economic Agreement are principally to determine where the GMT provisions are applied and the tax is filed/paid.

This is in part dependent on the location of the Substitute Taxpayer,. Under Law 7/2024, the Substitute Taxpayer is determined as the following:

-The UPE when it is located in Spanish territory; or

-The parent entity located in Spanish territory whose net book value of tangible assets is the highest among the group’s parent entities located in Spanish territory; or

-The constituent entity of the group located in Spanish territory whose net book value of tangible assets is the highest among the constituent entities of the group that are located in Spanish territory.

The Minimum Tax is a tax of the Basque region for taxpayers who are part of a multinational or large domestic group where the substitute taxpayer (as defined in Law 7/2024) is subject to the Basque regulations on Corporation Income Tax (or, where appropriate non-resident income tax (IRNR) for permanent establishments), when the group has two tax consolidation groups in Spain that apply both the Basque and Spanish regulations.

However, when taxpayers who are part of a multinational or large domestic group do not have two tax groups subject to the Basque and Spanish tax consolidation regimes (because there is no tax group in Spain or because, if there is, the tax group applies the tax regulations of a single territory, and the rest of the companies -or only one company- are taxed under the regimes of other territories):

-the Basque regulations will apply when the substitute taxpayer has its tax residence in the Basque Country; and

-the Spanish regulations will apply when the substitute taxpayer has its tax residence in Spain.

There is a specific rule for groups whose volume of operations has exceeded 12 million euros in the previous year. In this case, the tax residence of the substitute taxpayer will be taken into account, unless the volume of operations carried out in the other territory exceeds 75% of the total. In that  case, the regulations of the territory in which 75% or more of the operations have been carried out will apply.

This mirrors Article 14 of the Economic Agreement which applies a similar provision for corporate income tax purposes

Administrative Guidance

The Spanish Law does not include many aspects of the First or Fourth Set of OECD Administrative Guidance. Additionally, none of the Second Set of OECD Administrative Guidance (issued in July 2023) or the Third Set of OECD Administrative Guidance (issued in December 2023) are included (aside from Safe Harbours), however, they are included in the April 2025 Regulations.

The only aspects of the First Set of OECD Administrative Guidance included in the Law are:

-Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4);

-Excess negative tax carry-forward guidance (Article 2.7);

-Application of Article 7.6 to Insurance Investment Entities (Article 3.1); 

-Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2);

-Portfolio shareholdings election (Article 3.5);

-Deferred tax transitional rules (Articles 4.1-4.3).

Aspects of the Fourth Set of OECD Administrative Guidance included in the Law are:

-Extension of taxes pushed down to include Reverse Hybrids (Article 5.6.2)

-Option to not impose top-up tax liabilities on SPVs used in securitization transactions (Article 6.1.4)

The April 2025 Regulation includes:

-Meaning of “ancillary” for Non-Profit Organisations (Article 1.6);

-Forex hedge election (Article 2.2)

-Excluded dividends – asymmetric treatment of dividends and distributions (Article 2.3)

-Debt release election (Article 2.4)

-Equity gain or loss inclusion election (Article 2.9)

-The extension of Additional Capital to include Restricted Tier One Capital (Article 3.3)

-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)

-Application of Tax transparency election to Mutual insurance companies (Article 3.6)

-Tax Credits Guidance (MTTCs) (Article 2 Second Set of OECD Administrative Guidance)

-SBIE Rules:

o Foreign rules (Article 3 Second Set of OECD Administrative Guidance)
o Stock-based compensation election
o Leases (Article 3 Second Set of OECD Administrative Guidance)

-Mismatch between fiscal years of the UPE and another constituent entity (Article 3.1 of the Third Set OECD Administrative Guidance)

-Mismatch between fiscal year and tax year of a constituent entity (Article 3.2 of the Third Set OECD Administrative Guidance)

Safe Harbour and Penalty Relief Guidance

The Fourth Transitional Provision of the Law includes the Transitional CbCR Safe Harbour based on the OECD provisions outlined in its Safe Harbours and Penalty Relief Guidance. The changes provided in the December 2023 OECD Administrative Guidance (eg for hybrid arbitrage arrangements) are not included.

The Sixth Transitory Provision provides for the Transitional UTPR Safe Harbour.

Article 34(2) of the Law provides for the QDMTT Safe Harbour. In particular, it states that where a constituent entity is subject to a QDMTT in a foreign jurisdiction, the top-up tax in Spain will be deemed to be zero where the foreign QDMTT meets the conditions of a qualifying international agreement on safe harbours.

A “qualifying international safe harbour agreement” is defined as an international set of rules and conditions that all jurisdictions have accepted and that ensures that groups within the scope of the OECD Model Rules are able to elect to benefit from one or more safe harbours for a jurisdiction. This should therefore ensure that jurisdictions qualifying under the OECD Peer Review process for the QDMTT Safe Harbour will allow Spanish groups to qualify.

In addition, Article 34(3) of the Law seeks to include any future safe harbours announced by the OECD by deeming the top-up tax to be zero when constituent entities meet the conditions of a “qualifying international safe harbour agreement”.

ELECTIONS

Elections in the OECD Model Rules

All of the elections included in the OECD Model Rules and the EU Minimum Tax Directive are provided in the Law, including:

-Excluded Entity Election (Article 7(2) of the Law)

-Stock-Based Compensation Election (Article 10(3) of the Law)

-Election to use the Realization Method (Article 10(6) of the Law)

-Election to Spread Capital Gains (Article 10(7) of the Law)

-Consolidation Election (Article 10(9) of the Law)

-Unclaimed Accrual Election (Article 18(1) of the Law)

-GloBE Loss Election (Article 19 of the Law)

-Prior Year Adjustment Election (Article 21 of the Law)

-De-minimis Election (Article 33 of the  Law)

-Substance-Based Income Exclusion Election (Article 14(2) of the Law)

-Taxable distribution Election (Article 45 of the Law)

-Tax Transparency Election (Article 44 of the Law)

-Distribution Tax Regime Election (Article 42 of the Law)

Elections in the Administrative Guidance

The law includes the Excess Negative Tax Carry-Forward Election (Article 17(5) of the Law) and the Portfolio Shareholdings Election (Article 10(2)(b) of the Law).

The April 2025 Regulations include the:

-Debt Release Election

-Foreign Exchange Hedge Election

-Equity Investment Inclusion Election

DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE

Domestic Groups

The application of the global minimum tax follows the EU Minimum Tax Directive (eg it also applies to wholly domestic groups and requires a constituent entity applying the IIR to apply it not only to foreign subsidiaries but also to all constituent entities resident in that Member State (which isn’t mandatory in the Model Rules)).

UTPR

The OECD Model Rules allow flexibility as to how to apply the UTPR. Spain’s approach is to apply a UTPR top-up tax rather than a denial of deduction.

As such the carry forward provisions in Article 2.4.2 of the Model Rules for UTPR amounts not sufficient to provide for the additional cash tax expense are not relevant and these rules are not included in the Law.

DOMESTIC MINIMUM TAX

General

Chapter III of the Law provides that Spain will apply a domestic minimum top-up tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.

QDMTT Design Features

The Law provides that the standard GloBE calculation rules apply for determining the top-up tax. As such it refers to the general GloBE calculation in Article 24 for the determination of adjusted taxes and allowable net profits (to determine the QDMTT ETR).

This also ensures that the special rules of chapters 9 and 10 on corporate restructuring, holding structures, and for investment entities also apply for the application of the QDMTT.

There are two key amendments to the standard GloBE rules in the QDMTT calculation. The first relates to the accounting standard used.

Under Section 25(2) of the Law, the default position is that the general GloBE rules apply and the accounting standard of the UPE used to prepare the consolidated financial statements is used. However, when it is not reasonably possible to use this, Spanish GAAP can be used. Permanent differences in excess of EUR 1 million must be must be conformed to the UPE Accounting Standard.

This does not apply if the accounting period of the constituent entity differs from the accounting period of the UPE in the consolidated financial statements.

Note that the Law does not include currency provisions from the July 2023 OECD Administrative Guidance.

Secondly, Section 25(3) of the Law reflects the OECD Administrative Guidance which restricts the push-down of taxes to CFCs, PEs, hybrid entities and for taxes on distributions (aside from Spanish withholding tax on distributions).

The June 2024 OECD Administrative Guidance provides various options to jurisdictions that have implemented a QDMTT in respect of securitisation vehicles:

(i) application of the jurisdiction’s QDMTT to securitisation vehicles without any specific adjustment of the rules;

(ii) exclusion of securitisation vehicles from the scope of the QDMTT; or

(iii) inclusion of securitisation vehicles in the scope of the QDMTT while providing that the amount of QDMTT that has been determined for a securitisation vehicle is imposed on another Constituent Entity located in the same jurisdiction and forming part of the same MNE Group.

Article 25(4) of the Law applies option (iii). However, if there are no other constituent entities located in Spain, the amount of QDMTT for a securitisation vehicle is allocated for the purposes of the payment of the QDMTT to the securitisation vehicle itself.

The Third Transitional provision in the Law applies the international activity exemption for QDMTT purposes.

Registration

Article 18(1) of the April 2025 Regulations provides that any constituent entity located in Spain that forms part of a large multinational or domestic group is required to file an information return with the tax authority. It must notify the Tax Authority of the identification, the start and end date of the tax period and the country or territory in which the ultimate parent entity is located, when the latter is required to file the return or, if it is not required to file the return, it must notify the Tax Authority of the identification and the country or territory in which the entity designated to file the return is located.

Note that this can be submitted as a single registration form for all constituent entities located in Spanish territory that are part of an MNE or large domestic group.

This must be filed at least 3 months before the GIR filing deadline.

A draft registration form (Form 240) was issued on June 3, 2025 for consultation. This requires basic information on the filing entity, the constituent entities in Spain and the group structure. 

For periods before March 31, 2025 the submission deadline is between May and June 2026.

Filing

The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the EU Directive.

The approach is that every Constituent Entity located in Spain will have an obligation to file a GIR in Spain. However, this obligation can be discharged if the GIR is filed by:

-The Ultimate Parent Entity,

-A Local Filing Entity; or

-The Designated Filing Entity.

Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification with the Revenue.

The notification must contain:

-Details of the entity that is filing the GIR, and

-The jurisdiction in which such an entity is located.

Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.

Both the GIR and associated notifications must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).

The published Form 241 is to provide for the GIR, however, this is a list of information that will be contained with the electronically filed GIR that is based on the XML schema and user guide approved by the OECD.

Article 50 of the Law requires that a Top-Up Tax Return must be filed  within 25 calendar days following the 15^th  month (18^th month for the transitional year) after the end of the tax period.

The Third Transitional provision to the Regulations provides special filing requirements for a transitional fiscal year.

For the Basque Region, the substitute taxpayer will file the self-assessment of the global minimum tax and pay the tax to the Spanish State Administration or the Basque State Administration based on the rules established for the levy of Corporation Tax (or for the IRNR for permanent establishments).

In general, if the fiscal domicile is in the Basque region, the tax is paid to the Basque competent authority if turnover in the previous year did not exceed 12 million euros.

If turnover exceeds this then the tax is paid according to Article 15 of the Economic Agreement and, irrespective of tax residence, the tax is paid to both the Basque and Spanish State Administration in proportion to the volume of operations carried out in each territory during the year.

Form 242 is the template for the top-up tax return that will be filed electronically.  

Payment

Article 51 of the Law provides that any Top-Up Tax must be paid by the deadline for filing the Top-Up Tax Return. Note that for taxpayers with accounting periods ending December 31, 2024, the direct debit period will be from July 1 to 21, 2026.

Penalties

Article 48 of the Law provides that failure to file a GIR (or filing a GIR with incorrect information) will be subject to a penalty of 10,000 euros for each set of data that should have been included in the declaration (subject to a maximum penalty of 1 percent of the net of the turnover of the group).

On October 29, 2025, Order HAC/1198/2025, of October 21 was published in the Official Gazette. This approves the final versions of three specific Pillar 2 forms – Form 240 (registration), Form 241 (the GIR) and Form 242 (the top-up tax return).

On June 3, 2025, the Spanish State Tax Agency issued the draft Pillar 2 forms for consultation. 

This includes Form 240 (registration), Form 241 (the GIR – although this is essentially a list of information that will be issued via the OECDs GIR XML Schema) and Form 242 – the top-up tax return.

See: Draft Pillar 2 forms

See: Spain Issues Draft Pillar 2 Forms for Registration, GIR and the Top-Up Tax Return