Tax Advisory in the Basque Country: Economic Agreement and Three Provincial Treasuries

Tax advisory in the Basque Country is the service of tax planning and compliance for companies with a registered office or activity in the three historical territories of the Autonomous Community of the Basque Country — Bizkaia, Gipuzkoa, and Álava — each with its own Provincial Treasury and autonomous normative powers over the foral CIT, foral IRPF, and other concerted taxes, within the framework of the Basque Economic Agreement governed by Law 12/2002 (BOE-A-2002-9481). The general foral CIT rate is 24% in all three territories, versus 25% in common territory, with its own deductions for productive asset investment, job creation, and R&D that differ between the three foral regulations and from the state CIT Act 27/2014.

The Basque Tax System: Three Provincial Treasuries, Three Regulations, and One Economic Agreement

The Basque Country does not have a regional treasury: it has three. Each of the three historical territories — Bizkaia, Gipuzkoa, and Álava — has its own Diputación Foral with normative and revenue powers over the main direct and indirect taxes. This structure, rooted in medieval Fueros and recognised by the 1978 Constitution’s First Additional Provision, is the foundation of Spain’s most distinctive tax system.

The Basque Economic Agreement (Law 12/2002) is the legal text governing the relationship between this foral tax system and the State. It defines the concerted taxes and establishes the connection-point rules that determine which administration each company must pay each tax to based on its registered office and the location of its activity.

The three foral CIT acts are:

• Bizkaia: Foral Regulation 11/2013 — administered by the Hacienda Foral de Bizkaia (HFB), Bilbao.
• Gipuzkoa: Foral Regulation 2/2014 — administered by the Hacienda Foral de Gipuzkoa (HFG), Donostia-San Sebastián.
• Álava: Foral Regulation 37/2013 — administered by the Diputación Foral de Álava (DFA), Vitoria-Gasteiz.

All three apply a general rate of 24%, versus 25% under state Law 27/2014.

How We Advise in All Three Basque Foral Territories from Madrid

BMC advises in all three Basque historical territories from Madrid, with collaborating members in all three capitals for in-person proceedings:

• Bilbao (Bizkaia): a local registered economist — proceedings before the HFB and TEAF Bizkaia.
• Donostia-San Sebastián (Gipuzkoa): a local registered economist — proceedings before the HFG and TEF Gipuzkoa.
• Vitoria-Gasteiz (Álava): a local registered economist — proceedings before the DFA and TEAF Álava.

Technical planning, compliance, and defence work is led by BMC’s Madrid team, with full electronic access to all three Provincial Treasury platforms.

Key Differences Between the Foral CIT Acts of Bizkaia, Gipuzkoa, and Álava

Although all three foral CIT acts share the 24% general rate and the basic system structure, there are deduction and requirement differences that make a comparison relevant for groups with activity in more than one historical territory:

Productive asset investment deductions: all three provide a 10% deduction on investment in new non-current assets linked to the economic activity, with a minimum five-year holding period, with minor differences in the treatment of certain asset categories.

R&D deductions: all three regulate R&D and technological innovation deductions at their own percentages (different from Art. 35 state CIT Act). The Basque technology parks — Zamudio (Bizkaia), Miramón (Gipuzkoa), and Álava Technology Park — facilitate R&D activity qualification through the Basque Government’s technology support bodies.

Connection Points of the Basque Economic Agreement

The Art. 14 of Law 12/2002 rules determine the competent administration for CIT:

Exclusive payment to the Provincial Treasury: companies with a registered office in any of the three Basque historical territories and turnover below EUR 10 million pay entirely to their Provincial Treasury, regardless of any activity they carry out in other autonomous communities.

Distributed taxation: companies with a Basque registered office and turnover above EUR 10 million that operate in common territory must allocate their tax base between the Provincial Treasury and the AEAT in proportion to activity in each territory, calculated under Art. 20 of the Economic Agreement.

What Our Tax Advisory Service in the Basque Country Includes

Foral compliance: foral CIT (Forms 200B, 200G, 200A by territory), foral VAT, foral IRPF withholdings, foral informative returns, and AEAT coordination for common territory taxation.

Differential planning and analysis: comparison of the three foral regulations to optimise the group structure with activity in multiple Basque territories.

Connection point analysis and documentation: technical determination of the competent administration for each tax and territory, calculation of taxable base allocation percentages, and historical filing consistency review.

Defence before the foral tribunals: TEAF Bizkaia, TEF Gipuzkoa, and TEAF Álava claims, and TSJ Basque Country contentious-administrative appeals.

For more detail on Bizkaia regulations, see our dedicated page on tax advisory in Bilbao.

Request a consultation with our team. Free of charge and with no commitment, we evaluate your company’s obligations before the Basque Provincial Treasuries, identify connection points that need correcting, and present optimisation opportunities under foral legislation.