Executive Summary
The year 2023 was notable in the tax sphere for the convergence of multiple significant developments: the first application of the temporary solidarity tax, the first model 721 campaign on crypto assets, the Whistleblower Protection Act with indirect fiscal implications, and decisive progress towards Pillar Two implementation. At BMC, the tax department oriented its activity towards the proactive management of these developments, helping clients navigate the growing complexity of the regulatory environment.
Tax revenue reached €272 billion, a historical maximum, sustained by the resilience of the Spanish economy and by inflation that continued elevating nominal taxable bases.
Key Highlights
The first model 721 campaign for declaring crypto assets held abroad was one of the year’s milestones. More than 60,000 taxpayers filed the informational declaration on their cryptocurrency holdings at foreign platforms, revealing the magnitude of Spanish taxpayers’ exposure to digital assets. The AEAT cross-referenced this information with personal income tax, wealth tax and corporate tax declarations, initiating verifications in cases of detected inconsistencies.
The solidarity tax on large fortunes generated intense wealth planning activity. Strategies analysed included reviewing the valuation of business participations, relocating assets to exempt structures, analysing tax residence and optimising the deduction for wealth tax paid in the autonomous community of residence.
Pillar Two of the OECD focused the attention of multinational companies. The European Directive was transposed into Spanish legislation effective from 1 January 2024, requiring urgent impact analyses for obliged groups. At BMC, we developed specific jurisdiction-by-jurisdiction analysis methodologies to help clients quantify the potential impact and design adaptation strategies.
Analysis by Tax Category
Personal income tax and capital gains: The year’s elevated interest rates generated significant investment income for savers. The taxation of deposit interest, treasury bills and money market funds became relevant again for many taxpayers who had seen near-zero returns for years. Planning the savings tax base in personal income tax regained importance.
VAT and e-commerce: The full force of the OSS/IOSS single window system for cross-border e-commerce VAT generated growing demand for advice on the correct application of VAT rates in each destination country. The digital economy continued expanding, generating new compliance challenges.
Transfer pricing: Related-party transactions continued to be a focus of attention for the Tax Inspectorate. Transfer pricing documentation, especially for intragroup financing operations and intangible asset licensing, was reviewed with greater rigour.
Regulatory Changes
The Act 2/2023 on the Protection of Persons Reporting Regulatory Infringements (Whistleblower Act) introduced the obligation to establish internal reporting channels for companies with more than 50 workers. Although primarily a compliance regulation, it has relevant tax implications: reporting channels can be used to report tax irregularities, reinforcing the need for robust internal tax control systems.
Proactive tax planning proved more valuable than ever in the face of the multiplication of reporting obligations and intensification of data cross-referencing by the AEAT.
Outlook
The year 2024 would bring the full entry into force of Pillar Two for obliged groups, the first model 721 declarations for 2023 and the expectation of new fiscal measures depending on budget negotiation outcomes. The complexity of the tax environment showed no signs of reduction, which reinforced the value of expert advice and robust compliance structures.
Our international tax and planning team remained at the forefront of these developments, offering rigorous technical analysis and practical solutions adapted to each client’s reality.
