Spain published Law No. 3/2025 in its Official Gazette on 29 April 2025, updating the Economic Agreement with the Basque Country.

This agreement, originally from 2002, has been revised to include the new global minimum tax rules under the OECD’s Pillar Two framework. The changes follow Spain’s earlier adoption of Law No. 7/2024 to implement these rules, in line with EU Directive 2022/2523.

The new rules apply to large multinational enterprise (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the last four years. These groups are now subject to a minimum tax rate of 15%. The law introduces three key components: the income inclusion rule (IIR), the undertaxed payments/profits rule (UTPR) and a qualified domestic minimum top-up tax (QDMTT).

The law explains how these rules will be applied specifically in the Basque autonomous region. There are different approaches depending on whether a company belongs to both a Basque and a common Spanish tax group, or just one. If a group is part of both, the applicable rules depend on who acts as the substitute taxpayer for corporate or non-resident income tax. If the group is only part of one system, the rules depend on where the substitute taxpayer is based.

When it comes to paying the tax, the substitute taxpayer is responsible for filing and making payments. In general, if the company is based in the Basque region, the tax is paid to the Basque authorities. But if the company exceeds EUR 12 million in turnover and operates significantly in both the Basque region and the rest of Spain, the tax must be split and paid to both authorities in proportion to where the business activity takes place.

Earlier, Spain issued Royal Decree 252/2025 of 1 April 2025 in the Official Gazette, introducing Complementary Tax Regulations to ensure a global minimum tax for large multinationals and national groups.

The regulations clarify Law No. 7/2024 of 20 December 2024 for implementing the Pillar Two global minimum tax under Council Directive (EU) 2022/2523 of 14 December 2022.