Spain cuts corporate tax rate to 28%
Spain will cut its corporate tax rate to 28% from January 1 2015, with a further cut coming in a year later. Incentives used by large businesses will be repealed to fund the rate cut, but the R&D tax credit has been spared.
The two percentage point cut in the corporate tax rate from 30% to 28% will be followed by a further cut to 25% scheduled for January 1 2016.
"Today we are expecting the government will approve a draft Bill of law which will mean major changes to the Spanish tax landscape," said Carlos Gabarro of ALTALEX.
"Corporate income tax is going to be gradually reduced, dropping to 27.5% or 28% in 2015 and 25% from January 1 2016," said Gabarro. "The changes are largely in line with OECD and IMF recommendations, including base broadening measures."
One area where Spain has not followed the recommendations of the OECD, IMF and other multilateral organisations is indirect tax.
"There were recommendations to increase VAT but the government is not willing to. There will be some reclassification of certain products to be taxed at a higher rate," said Gabarro.
These products will include beer and some medical supplies.
More to follow...