The Spanish government on 20 January 2015 announced that it will issue regulations, expected to be adopted in the first half of 2015, that will require country-by-country reporting by multinationals. The new regulations would enter into force on 1 January 2016.
Under the new regulations, certain amendments have been introduced in line with the (OECD) Base Erosion and Profit Shifting (BEPS) project. In particular, measures have been included in relation to the tax treatment of hybrid instruments and the Spanish Controlled Foreign Companies (CFC) rules, including, for instance, additional substance requirements in the CFC rules in order to avoid imputation of foreign low-taxed income.
The Spanish Government has also announced that the new Corporate Income Tax Regulations, which are expected to be adopted in the first half of 2015, will include a new country-by-country reporting obligation. No draft bill has been released yet but, in principle, the measure will require that multinationals exceeding a certain turnover will have to file with the tax administration a comprehensive report reflecting the activity and taxes paid in every country where they operate.
