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Tax advisor in Madrid — enterprise-grade fiscal planning at the centre of Spain's corporate economy

Corporate tax advisory in Madrid for multinationals, HQ relocations and large groups. Transfer pricing, AEAT inspections, IS planning, and international structuring from Spain's fiscal capital.

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The problem

Madrid is where Spain's corporate tax decisions are made and, increasingly, where they are contested. The AEAT's central inspection bodies — the Delegacion Central de Grandes Contribuyentes and the Unidad de Gestion de Grandes Empresas — are headquartered in Madrid. IBEX 35 groups, major foreign subsidiaries, and the Spanish holding entities of global multinationals are managed from the capital. The concentration of corporate fiscal activity here is unmatched anywhere else in Spain, and the tax issues that arise are correspondingly complex. For a multinational group establishing or expanding its Spanish operations from Madrid, the fiscal questions are substantial: the optimal legal structure for a Spanish HQ entity, the transfer pricing framework to document and defend intercompany transactions, the application of the Participation Exemption to dividends and capital gains within the group, the permanent establishment risk of centralising functions in Spain, the design of financing structures that comply with Spain's thin capitalisation and interest limitation rules, and the interaction of Spanish corporate tax with applicable double tax treaties. These are not issues that generalist advisors handle well. Madrid requires a tax practice with direct AEAT inspection experience, deep transfer pricing capability, and the corporate tax technical depth to plan and defend complex group structures.

Our solution

BMC's Madrid office is the firm's national headquarters and corporate tax centre. Our tax team in Madrid advises large and mid-market Spanish companies, multinational groups with Spanish subsidiaries, and international businesses relocating their European or Iberian HQ to the capital. We handle the full corporate tax lifecycle: annual Impuesto sobre Sociedades planning and compliance, transfer pricing documentation and defence, AEAT inspection management and administrative appeals, M&A tax structuring, HQ relocation advisory, and the tax treatment of group financing and treasury structures. Madrid is also BMC's centre for international tax mandates: inbound investment structuring, treaty application, permanent establishment analysis, and the tax implications of cross-border M&A and corporate reorganisations. Our clients include Spanish operating groups, foreign-owned subsidiaries, and international investors deploying capital into Spain through Madrid entities. All engagements are handled by senior tax lawyers and economists with direct AEAT and TEAC experience.

Process

How we do it

1

Corporate tax diagnostic and IS planning

We review your current Impuesto sobre Sociedades position — the effective tax rate, available credits and deductions, loss carryforward position, and the tax treatment of intragroup transactions — and design the optimal annual IS planning strategy. For groups, we model the consolidated tax position and identify legitimate reduction opportunities within the Regime Especial de Consolidacion Fiscal, capitalisation reserves, and the Research, Development and Innovation (R+D+I) deduction framework.

2

Transfer pricing documentation and benchmarking

We prepare and maintain the full transfer pricing documentation required under Spanish law (Article 18 LIS and Royal Decree 634/2015): master file, local file, and country-by-country reporting where applicable. We conduct economic benchmarking studies, apply the appropriate OECD transfer pricing methods, and document the arm's length nature of intercompany transactions. For groups already under AEAT scrutiny, we prepare the technical defence file and manage all AEAT communications.

3

AEAT inspection management and administrative appeals

When the AEAT opens a corporate tax inspection — whether a full scope Actuacion General or a limited Actuacion Parcial — BMC manages the entire process from the initial notification to final resolution. We represent the taxpayer before the Equipo Regional or the Unidad de Gestion de Grandes Empresas, negotiate the scope of information requirements, prepare technical responses, and if necessary, pursue administrative appeal before the TEAC and judicial review before the Audiencia Nacional.

4

M&A and corporate reorganisation tax structuring

We advise on the tax structuring of acquisitions, disposals, mergers, spin-offs, and corporate reorganisations involving Spanish entities. This includes the application of the Regime Especial de Fusiones y Escisiones (tax neutrality for qualifying reorganisations), the structuring of acquisition financing to optimise deductibility within Spain's interest limitation rules, the design of the exit structure to maximise Participation Exemption eligibility, and the management of the AEAT notification obligations for qualifying reorganisations.

25%
Standard corporate income tax rate in Spain (IS)
95%
Participation Exemption on qualifying dividends and capital gains within groups
30%
EBITDA limit on net financial expense deductibility (interest limitation rule)

We relocated our Iberian HQ to Madrid from Lisbon and needed a tax team that understood both the structural planning and the AEAT relationship. BMC handled the HQ migration, set up the transfer pricing framework for our 12-entity Spanish sub-group, and managed our first AEAT inspection without a single additional tax assessment. The quality of technical advice and the directness of communication were exactly what we needed from a Madrid advisor.

Thomas Brandt CFO, Iberia Region, European industrial group, Madrid HQ

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We respond within 4 business hours · 910 917 811

Madrid: Spain’s corporate tax capital

Spain’s corporate fiscal machinery is centred in Madrid. The Agencia Estatal de Administracion Tributaria (AEAT) has its national headquarters in Calle Infanta Mercedes. The Delegacion Central de Grandes Contribuyentes — Spain’s large taxpayer unit, responsible for inspecting groups above EUR 100 million in revenue — operates from the capital. The Tribunal Economico-Administrativo Central (TEAC), the first mandatory stage of administrative appeal against AEAT decisions, sits in Madrid. When corporate tax disputes in Spain reach judicial review, they go before the Audiencia Nacional and ultimately the Tribunal Supremo, both in Madrid.

For a group with material Spanish operations, being advised by a Madrid tax team with direct AEAT inspection and TEAC appeal experience is not a convenience — it is a structural advantage. BMC’s Madrid office, located in the Barrio de Salamanca at C/ Castello 36, Planta 1, is the firm’s national corporate tax centre and the team that manages the most complex group mandates.

Services for multinational groups operating from Madrid

The tax advisory needs of a multinational operating from Madrid span the full corporate tax lifecycle. At the planning stage: the optimal Spanish holding structure, the application of the Participation Exemption and the ETVE regime, the design of intercompany financing within Spain’s interest limitation rules, and the transfer pricing framework that governs transactions between the Spanish entities and the wider group. At the compliance stage: Impuesto sobre Sociedades preparation and filing, transfer pricing documentation (local file, master file, CbCR), related-party transaction reporting under modelo 232, and IS instalment payments. At the controversy stage: AEAT inspection management, technical defence preparation, administrative appeal before the TEAC, and judicial review before the Audiencia Nacional.

BMC handles all three stages. Our Madrid tax team includes corporate tax lawyers, economists qualified to issue binding transfer pricing reports, and former AEAT officials with direct inspection experience. For large group clients, we provide a dedicated senior partner as single point of contact across all tax matters, including coordination with the group’s home-country advisors on cross-border positions.

AEAT inspections and tax litigation in Madrid

An AEAT inspection of a large Madrid company is a sustained, technically demanding process. The Unidad de Gestion de Grandes Empresas or the Delegacion Central assigns experienced inspectors who focus on high-value issues: transfer pricing, the Participation Exemption, the reality of IS deductions, the substance behind holding and royalty structures, and the tax treatment of complex financial instruments. The process can run for years, and the technical and procedural decisions made in the first months — what information to provide, how to characterise contested positions, whether to regularise voluntarily — have decisive consequences for the final outcome.

BMC brings three capabilities that matter in this context. First, technical depth: our Madrid tax team produces the transfer pricing studies, economic analyses, and legal memoranda that defend contested positions with the rigour the AEAT and TEAC demand. Second, procedural experience: we understand the AEAT’s internal procedures, the mandatory timelines, the rights of the taxpayer during inspection, and the mechanics of the administrative appeal system. Third, strategic judgment: we advise clients when to regularise a position early, when to contest, and how to sequence a multi-issue dispute across the administrative and judicial stages to maximise the overall outcome.

For groups that have received an AEAT notification and need immediate specialist support, BMC Madrid is available for urgent engagement regardless of whether a prior advisory relationship exists.

International tax planning from Madrid

Madrid’s position as Spain’s gateway for international capital makes it the natural base for inbound investment structuring and outbound group reorganisations. Spain’s treaty network of over 100 double taxation agreements, combined with the ETVE regime and the Participation Exemption, creates a competitive platform for holding structures, regional headquarters, and intra-European royalty and finance flows when correctly structured with appropriate substance.

BMC advises international clients on the full inbound investment cycle: pre-entry analysis of the Spanish tax landscape, design of the acquisition or greenfield structure (direct versus corporate vehicle, debt-equity mix, intercompany financing terms), establishment of the Madrid entity with the substance required to access treaty benefits and the Participation Exemption, and ongoing IS planning to manage the effective tax rate of the Spanish operations.

For groups considering Madrid as a European HQ location — attracted by the combination of the ETVE regime, Spain’s treaty network, competitive talent costs, and the time zone advantage for managing both Americas and European operations — BMC provides a comprehensive HQ migration advisory, from the structural mapping and exit tax analysis in the current HQ jurisdiction to the full setup of the Madrid entity and its tax compliance infrastructure.

Our Madrid office is reachable at madrid@bm.consulting and +34 910 917 811. Initial consultations are available in English, Spanish, German, and French.

FAQ

Frequently asked questions

A Spanish subsidiary of a foreign group is subject to Impuesto sobre Sociedades (IS) at 25% on its worldwide taxable income. Key annual obligations include: quarterly IS instalment payments (pagos fraccionados) in April, October, and December; the annual IS return (modelo 200) within 25 days of six months after the financial year end; transfer pricing documentation (local file, and master file if the group exceeds EUR 45 million in consolidated revenue); modelo 232 for related-party transactions above disclosure thresholds; and, if the group exceeds EUR 750 million in consolidated revenue, country-by-country reporting (modelo 231). BMC manages the full compliance calendar for Madrid subsidiaries.
Spain's Participation Exemption (exencion por doble imposicion, Article 21 LIS) exempts 95% of dividends and capital gains received from qualifying subsidiaries, subject to conditions: a minimum 5% shareholding (or EUR 20 million cost), held for at least one year, and the subsidiary must not be in a low-tax jurisdiction. The remaining 5% taxable amount reflects a non-deductible deemed expense. For Madrid holding entities aggregating dividends or capital gains from operating subsidiaries, the Participation Exemption is the central pillar of the group tax structure. BMC advises on structuring acquisitions and the Spanish holding to maximise Participation Exemption eligibility.
The Delegacion Central de Grandes Contribuyentes in Madrid has jurisdiction over taxpayers with consolidated revenue above EUR 100 million and exercises enhanced oversight over these groups through regular compliance reviews and targeted inspections. Inspections are typically triggered by anomalies in IS filings, large transfer pricing adjustments, significant related-party transactions, aggressive tax positions, or as part of sectoral audit campaigns. When notification of an inspection is received, the critical first step is engaging experienced tax litigation counsel immediately — not waiting to see the scope. BMC takes over management of the entire process from notification, briefing the inspection team, controlling information flow, and preparing the technical defence.
Spain's interest limitation rule (Article 16 LIS) restricts the deductibility of net financial expenses to the higher of 30% of EBITDA or EUR 1 million. Expenses disallowed in any year carry forward indefinitely, and unused capacity carries forward for five years. For Madrid groups with significant intercompany financing — acquisition debt pushed down to Spanish entities, cash pooling arrangements, intragroup loans from parent entities in low-rate jurisdictions — the interest limitation rule requires careful modelling of the tax cost of the financing structure. BMC advises on compliant financing architecture that maximises deductibility while managing the transfer pricing dimension of intercompany interest rates.
Madrid is an increasingly attractive European HQ location: Spain's double tax treaty network (over 100 treaties), the Participation Exemption, the ETVE (holding company) regime for international groups, and comparatively competitive effective tax rates for holding and royalty structures. The relocation advisory process begins with a mapping of the current group structure and the tax consequences in the current HQ jurisdiction of a move (including potential exit taxes, permanent establishment de-recognition, and employee mobility implications). BMC then designs the Madrid entity structure, advises on substance requirements to access treaty benefits, and manages the Spanish tax registration and compliance setup.
Yes. The SOCIMI regime (Spain's equivalent of a REIT) provides a 0% IS rate for listed entities distributing at least 80% of IS income, and is available to Madrid-based vehicles investing in residential or commercial real estate. BMC advises on SOCIMI constitution, the qualifying asset and income requirements, the AEAT approval process, and the tax treatment of SOCIMI distributions for shareholders at different levels of the structure. We also advise on the IS and ITP implications of real estate portfolio acquisitions, corporate vehicle versus direct acquisition decisions, and the VAT/ITP election available on commercial property transactions.

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