With the start of the 2026 financial year, the Complementary Tax established by Law 7/2024, of 20 December, enters its general regime phase, leaving behind the transitional safe-harbour mechanisms that facilitated adaptation during 2024 and 2025. Spain thereby transposes into domestic law Council Directive (EU) 2022/2523, implementing Pillar Two of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
Scope: who is obligated
The Complementary Tax applies to:
- Multinational groups: with constituent entities in at least two jurisdictions and consolidated revenues equal to or exceeding €750 million in at least two of the four immediately preceding financial years.
- Large domestic groups: with all their entities in Spain, but meeting the same revenue threshold.
Excluded are public bodies, international organisations, non-profit entities, pension funds and investment funds that are the ultimate parent entity.
Tax mechanisms
Income Inclusion Rule (IIR)
The ultimate parent entity (or the designated intermediate parent entity) must pay tax on the difference between the effective tax rate (ETR) borne in each jurisdiction where the group operates and 15%. If a Spanish subsidiary pays an ETR of 12% in another jurisdiction, the Spanish parent must top up to 15%.
Undertaxed Profits Rule (UTPR)
When the jurisdiction of the ultimate parent entity does not apply the IIR (for example, if the parent is in the US), Spanish subsidiaries bear a supplementary allocation proportionate to the number of employees and net tangible assets in Spain.
Qualified Domestic Minimum Top-up Tax (QDMTT)
Spain has opted to implement a qualified domestic complementary tax that allows direct collection of the difference up to 15% on the income of the group’s Spanish entities. This prevents other jurisdictions from collecting the top-up.
End of transitional safe harbours
During 2024 and 2025, groups could use the transitional safe harbours based on Country-by-Country Report (CbCR) data to presume that a jurisdiction met the minimum rate without needing to complete the full ETR calculation. From 2026, these simplified mechanisms are no longer available for most jurisdictions, requiring the full calculation of the effective tax rate in accordance with the GloBE rules.
Declaration obligations: Forms 240, 241 and 242
Order HAC/1198/2025 (BOE of 29 October 2025) approved three new forms for tax compliance purposes:
| Form | Content | Deadline |
|---|---|---|
| 240 | Notification by the designated constituent entity | 15 months from the close of the financial year (18 months for the first year) |
| 241 | Annual information return for the Complementary Tax | Same deadline as Form 240 |
| 242 | Self-assessment of the Complementary Tax | Same deadline as Form 240 |
For the 2024 financial year (first year of application), the extended 18-month deadline falls in June 2026. For the 2025 financial year, the standard 15-month deadline falls in March 2027.
Implications for Spanish subsidiaries of foreign groups
Spanish subsidiaries of foreign multinational groups exceeding the €750 million threshold must:
- Identify the declarant entity: determine whether the Spanish subsidiary must file Forms 240/241/242 as the designated constituent entity.
- Calculate the Spanish ETR: gather the accounting information necessary to determine the effective tax rate in Spain in accordance with the GloBE rules.
- Assess exposure to the UTPR: if the ultimate parent is in a jurisdiction that does not apply the IIR, the Spanish subsidiary may be subject to the UTPR.
- Coordinate with the parent: GloBE report data must flow from the parent to the subsidiaries with sufficient lead time.
Recommendations
- Abandon transitional safe harbours: companies that used the transitional mechanisms must implement the full ETR calculation for 2026.
- Review information systems: ensure that the accounting data required for Forms 241 and 242 can be extracted from ERP systems.
- Assess group structure: analyse whether there are jurisdictions with an ETR below 15% and quantify exposure to the Complementary Tax.
- First declaration deadline in June 2026: groups whose first year of application was 2024 must submit the forms before June 2026.
BMC advises multinational groups and their Spanish subsidiaries on compliance with Pillar Two obligations through our international tax and tax planning practice.
Specific regulatory framework
The Complementary Tax in Spain is built on a five-layer regulatory system:
- Council Directive (EU) 2022/2523 of 14 December 2022, ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union. Spain transposed it in full through Law 7/2024.
- Law 7/2024, of 20 December, on fiscal, administrative and public sector measures (BOE-A-2024-26219). Title III (arts. 14–64) regulates the Complementary Tax, including: subjective scope (art. 14), exclusion of public entities (art. 16), IIR and QDMTT mechanisms (arts. 18–22), GloBE ETR calculation (arts. 25–38), safe harbours (arts. 50–56) and declaration obligations (arts. 57–61).
- Order HAC/1198/2025, of 29 October (BOE of 29 October 2025): Approves Forms 240, 241 and 242. Sets filing deadlines and the format of GloBE data required by the AEAT.
- OECD/G20 Inclusive Framework on BEPS, GloBE Rules (Pillar Two): Published in December 2021, these are the primary technical reference framework developing the ETR calculation, substance-based income exclusions (SBIE) and allocation mechanisms between jurisdictions. The OECD Administrative Guidance (publications from 2022, 2023 and 2024) carries first-order interpretative weight.
- OECD Agreement on Transitional Safe Harbours (December 2022): Defined the simplified CbCR safe harbours applicable during 2024–2025 for jurisdictions with a high ETR according to CbCR data. Their expiration in 2026 requires the full GloBE ETR calculation.
GloBE ETR calculation: simplified formula
GloBE ETR = Adjusted covered taxes / Adjusted GloBE profit
Where:
- Adjusted covered taxes: current tax accrued + temporary differences adjusted under the GloBE rules (arts. 25–32 Law 7/2024)
- Adjusted GloBE profit: accounting result + prescribed adjustments (exclusion of intercompany dividends, adjustment for capital gains and losses between group entities, etc.)
- If ETR < 15%: top-up = (15% − GloBE ETR) × Adjusted GloBE profit
Practical example: multinational group with Irish subsidiary
Scenario: Spanish group (SpainCo) with an Irish subsidiary (Eire Sub) taxed at 12.5% (general Irish CIT rate). Consolidated group revenues: €1,200M. GloBE profit of Eire Sub: €40M. Current taxes in Ireland: €5M (real ETR: 12.5%).
| Item | Calculation | Amount |
|---|---|---|
| GloBE ETR of Eire Sub | €5M / €40M | 12.5% |
| Differential to minimum | 15% − 12.5% | 2.5% |
| Complementary Tax base | €40M × 2.5% | €1,000,000 |
| Substance-based income exclusion (SBIE) | 5% tangible assets + 5% labour costs (example: €8M + €3M) → €550,000 | −€550,000 |
| Complementary Tax payable (IIR, in Spain) | 1,000,000 − 550,000 | €450,000 |
The substance-based income exclusion (SBIE) can significantly reduce the base but requires documented evidence of physical assets and genuine employees in the jurisdiction. Groups with cross-border activity may also need to review their transfer pricing documentation for alignment with GloBE calculations.
Common errors BMC corrects
- Continuing to apply transitional safe harbours in 2026 without verifying their validity by jurisdiction. The CbCR safe harbours were agreed on a transitional basis and their validity varies by country. Applying them in 2026 without OECD confirmation may lead to incorrect filings and penalties.
- Failing to identify the designated constituent entity to file Forms 240/241/242. In groups with multiple Spanish subsidiaries, only one must assume the declarant role. The designation must be notified to the AEAT and coordinated with the parent.
- Calculating the GloBE ETR using the nominal tax rate rather than the adjusted effective rate. The GloBE ETR is calculated using “adjusted covered taxes” which may differ significantly from current tax due to temporary differences admitted and specific adjustments under Law 7/2024.
- Ignoring the UTPR if the parent is in the US. The US has not yet implemented the IIR. In that case, the jurisdictions where the group operates (including Spain) apply the UTPR, which may mean the Spanish subsidiary contributes to topping up the group’s undertaxed profits.
- Failing to align ERP information systems with GloBE data requirements. Forms 241 and 242 require accounting data at a level of granularity greater than usual (profit by entity, disaggregated covered taxes, tangible assets and labour costs by jurisdiction). Without adapting the information system, manual preparation consumes disproportionate resources.
Next steps
- Confirm whether the group exceeds the €750M threshold in at least two of the four preceding financial years to determine the obligation to apply Law 7/2024
- Identify the designated constituent entity that will file Forms 240/241/242 and notify the AEAT
- Calculate the GloBE ETR for each jurisdiction in the group for 2025 and 2026 in accordance with arts. 25–38 of Law 7/2024
- Identify jurisdictions with an ETR below 15% and quantify the Complementary Tax base before applying the substance-based income exclusion (SBIE)
- Adapt information systems (ERP, consolidation) to extract the data required for Forms 241 and 242 in the format required by the AEAT
- File Forms 240/241/242 for the 2024 financial year before the extended June 2026 deadline if the first year of application was 2024
