The tax reform in Spain introduces significant changes as of 2015

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Tax reform in Spain

On November 28, 2014, the tax reform which had been negotiated over the previous months in Spain was approved. As a result, becoming effective as of 2015 are a new Corporate Income Tax Law and amendments to the Income Tax Law, Non Resident Income Tax Law, Value Added Tax (VAT) Act, Tax System for the Canary Islands, the Law on Excise Taxes, and environmental taxation.

The primary changes to the Corporate Income Tax Law include:

  • the - non-deductibility of impairment losses on tangible and intangible fixed assets,
  • the - reinforcement of the restrictions on the offsetting of tax losses,
  • the - restrictions on the tax deductibility of hospitality expenses, and
  • the - elimination of the deduction for internal double taxation, being replaced by an exemption mechanism which is also applicable to sales of ownership interests and the tightening of lim    itations on the deductibility of financial expenses.

However, there is a gradual reduction of the standard tax rate from the current rate to 28% in 2015 and to 25% in 2016. Additionally as a tax incentive the ‘capitalisation reserved’ is created in order to replace the reinvestment in extraordinary profits tax credit.


From a VAT point of view, the most relevant issue has been the increase of the healthcare products and medical equipment tax rate which has been fixed at 21% in order to comply with the rules provided by the European Union (EU).

Below is an overview of the main developments of the tax reform which may be most significant for companies operating in the pharmaceutical and life sciences sector.