The Spanish government announced that it is considering reintroducing specific tax measures after the Constitutional Court of Spain has ruled them as unconstitutional. On 18 January 2024, the Constitutional Court ruled that particular provisions of Royal Decree-Law 3/2016 were unconstitutional.
These provisions included limitations on net operating losses, double taxation credits, and the requirement to reverse previous impairment loss deductions. This resulted in revenue losses, and to offset it, the government aims to reintroduce the tax measures with adjustments, which are as follows:
- Companies with a net turnover between EUR 20 and 60 million should limit the offset of loss carryforwards to 50%;
- Companies with a net turnover exceeding 60 million should limit the offset of loss carryforwards to 25%;
- For companies with a net turnover over EUR 20 million, both domestic and international double taxation credits should be limited to 50% of the tax liability;
- Introduce the provision to reverse past impairment loss deductions.
Spain’s government also plans to prolong the loss offset restriction within a tax group, which was initially implemented for tax periods commencing in 2023, by including tax periods starting in 2024.
