Cross‑Border Tax Forecast 2026 in Spain

The Council of Ministers has extended the 2025 Budget Bill to 2026 without significant changes.

This move maintains the legal framework and ensures continuity in fiscal matters.

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Pillar 2 obligations remain in force through Forms 240, 241 and 242, which identify the filing entity, group information, safe harbour data and the required self assessment for taxpayers.

The obligations are as follows:

• Form 240: transition filing between May-June 2026; then due in the last 3 months before Form 241’s deadline
• Form 241: transition filing also May-June 2026; then due by the 15th month after the fiscal year-end
• Form 242: tax return due 1-25 July 2026; then within 25 days of the 15th month after the fiscal year-end.

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Set a reminder to file the return on time.

In 2026, corporate income tax taxpayers must, for the first time, prepare, publish and register a public country-by-country report containing key fiscal information.

Spain is enforcing new reporting rules for EU groups and standalone entities with revenues above EUR 750 million for years starting on/after 22 June 2024; publication and registration required within 6 months after year-end (first filing: June 2026). 

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Set a reminder to file the return on time.

The TEAC (Tribunal Económico-Administrativo Central, Spain’s highest administrative tribunal) has modified its position on refunding withholding taxes on royalties when the foreign tax credit cannot be applied. Spanish Audiencia Nacional confirms the point. 

This change aligns Spain’s approach with recent CJEU rulings.

Non-resident companies unable to offset Spanish withholding tax due to losses/insufficient taxable base may now request a refund in Spain.

Identify Spanish withholding done within the 4-year period and assess whether non-resident companies faced losses or insufficient taxable base in the residence jurisdiction of the company.

The deadline to adapt invoicing IT systems is extended to 1 January 2027 for corporate income tax payers and 1 July 2027 for all other taxpayers.

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A testing period allows taxpayers to stop sending Veri*Factu (the mandatory Spanish electronic invoicing regulation) test records and use other invoicing systems until full compliance is required. 

Prepare to bring billing systems into compliance. Note that opting for automatic e-reporting exempts an entity from the new obligations related to Veri*Factu.

The TEAC has confirmed that due diligence reports are inherently tax-relevant. 

This means due diligence reports may be requested during audit and verification procedures.

The new rules may undermine legal certainty, professional secrecy and taxpayer rights and disrupt routine transactions. 

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Courts reaffirm the presumptive validity of tax residence certificates issued for treaty purposes, applying the tie-breaker rules of Article 4(2) of tax treaties.

Supreme Court rulings (July 2024) refine the “main centre of economic interests” test through a holistic analysis of income flows, assets and management; treaty tie-breakers must be applied autonomously. 

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The Supreme Court has clarified the concept of beneficial ownership for royalties subject to non-resident income tax (NRIT) and the cases in which a tax treaty does not apply under current doctrine.

These developments collectively reflect Spain’s alignment with international tax standards and reinforce legal certainty for cross-border taxpayers.

The concept of “beneficial owner” follows the Danish cases, focusing on economic reality and disposal of income; cascading treaty application is rejected when EU exemptions are denied.

The judgement is particularly relevant for multinational groups with centralised IP structures, as it requires real economic substance and effective decision-making capacity at the level of the royalty-receiving entity.

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