2026 EN

We would like to congratulate all the newly elected officers of the British Chamber of Commerce in Spain, including Christopher Dottie MBE as President, José Manuel Rodríguez Martínez and Joan Sintes Segarra as National Vice Presidents, and Albert Garrofé as Secretary. In the regional positions, key partners as Daniel Tovar, Susana Rodríguez and DEREK A LANGLEY.

We look forward to seeing the positive impact they will bring to the Chamber and the broader business community.

We are specially proud that our founding partner, Miriem Diouri García, will continue to contribute to the Chamber in her new role as Treasurer, following two consecutive terms on the General Council.

Her appointment reflects MDG Advisors’ ongoing commitment to engaging with the economic environment around us and striving for excellence in all that we do.

The reduced rate of 15% for corporation tax is one of the main tax incentives for newly created companies, as it allows them to be taxed below the general rate.

However, this tax benefit does not automatically apply to all newly formed companies. The application of this incentive requires an analysis of whether there is actually a new economic
activity or whether, on the contrary, the new company is a continuation of an activity previously carried out by the partners or by related entities.

In this context, Binding Ruling V1627-25, of 15 September, of the Directorate-General for Taxation (DGT) reviews the requirements for applying the reduced rate when the newly created entity carries out the same activity as its partners or entities related to them.

Regulatory framework: the reduced rate for newly created entities

Article 29.1 of Law 27/2014 on Corporation Tax establishes that newly created entities carrying out economic activities will be taxed at a rate of 15% in:
– the first tax period in which they obtain a positive tax base, and
– the following tax period.

This regime aims to encourage the creation of new companies and alleviate the tax burden in the first years of activity.

However, the regulation itself establishes a series of cases in which a truly new activity is not considered to exist, which would prevent the reduced rate from being applied.

Cases in which the reduced rate cannot be applied

Article 29.1 of the Corporation Tax Law excludes the application of the reduced rate, among other cases, when:

1. There is a transfer of the activity from related persons or entities
A new activity is not considered to have been started when the economic activity has been previously carried out by related persons or entities and subsequently transferred, by any legal means, to the newly created entity.

2. The activity was already carried out by a natural person with majority control
Nor is it considered a new activity when the activity was carried out during the previous year by a natural person who owns more than 50% of the new company.

3. The entity is part of a commercial group
Entities that are part of a commercial group under the terms of Article 42 of the Commercial Code are not eligible for the reduced rate.

4. The company is of a patrimonial nature
The reduced rate is also not applicable when the entity is considered a patrimonial entity, i.e. when its assets are mainly composed of property or rights not related to an economic activity.

Coincidence of activity with partners: DGT criterion

One of the most common questions in practice is whether the reduced rate can be applied when the newly created company carries out the same activity as its partners or another
related entity.

Binding Consultation V1627-25 clarifies that the mere coincidence of activity does not, in itself, prevent the application of the reduced rate.

For the exclusion provided for in the law to apply, there must be a legal transfer of the activity or business from the entity or person that was carrying it out.

Consequently, if there is no transfer of the business and the legal requirements are met, the newly created company can benefit from the reduced rate, even if its partners have previously
carried out a similar activity.

Conclusion
The administrative doctrine confirmed by Binding Ruling V1627-25 of the DGT makes it clear that the application of the reduced rate of 15% in Corporation Tax requires an analysis of the
specific circumstances of each case.

In particular, it is essential to check:
– whether there is a transfer of the activity from another related entity or person,
– whether any of the partners holds a majority stake after having previously carried out the activity, and
– whether the entity is part of a commercial group or is of a patrimonial nature.

In short, the coincidence of activity between the new company and its partners does not automatically determine the exclusion of the incentive, but it does require a detailed analysis of the corporate structure and the origin of the activity in order to avoid tax risks.

An increasing number of international professionals are relocating to Málaga to benefit from the special regime for posted workers, commonly known as the Beckham Law.
When the employer is a foreign company without a legal entity in Spain, a key question arises: how should Social Security contributions be managed?
There are two main options:

1. A1 Certificate (where a treaty exists)
If the country of origin has a bilateral Social Security agreement with Spain (as is the case within the European Union and certain non-EU countries), the employer may apply for an A1 certificate.
This document allows the employee to continue contributing to the Social Security system in their home country during their temporary assignment in Spain.

In this case:
– There is no obligation to contribute to the Spanish Social Security system.
– The company is not required to register in Spain.
– Social security coverage remains in the country of origin.
This is generally the simplest solution; however, it is only valid if the assignment is temporary and the issuing country’s requirements are met.

2. Registration of the Foreign Company with the Spanish Social Security Authorities
If no agreement exists or it is not possible to obtain the A1 certificate, the foreign company must register in Spain with the Spanish General Treasury of Social Security (Tesorería General
de la Seguridad Social).

The process includes:
– Obtaining a Spanish NIE (Foreigner Identification Number) for the director or legal representative of the employing company.
– Applying for a Contribution Account Code (Código de Cuenta de Cotización – CCC).
– Registering the employee under the Spanish General Social Security Regime.
– Complying with monthly contribution obligations.

Even if the company does not have a Spanish incorporated entity, it may assume these obligations as a foreign employer.
Proper prior planning is essential to avoid labor and tax risks for both the company and the posted employee.

Conclusion

Before relocating to Spain, it is crucial to properly analyze the employment and contribution structure. Inadequate planning may create contingencies for both the foreign employer and the employee, potentially complicating the application of the Beckham Law regime.

Binding Ruling V1372-25, dated 21 July 2025, addresses a highly relevant issue in the context of international mobility: whether a taxpayer benefiting from the special inbound expatriate regime under Article 93 of the Spanish Personal Income Tax Act (commonly known as the “Beckham regime”) forfeits such regime by virtue of being a partner in a UK Limited Liability Partnership (LLP) that attributes profits to him for tax purposes.

Background:

The taxpayer relocated to Spain in 2023 and opted for the special regime under Article 93 of the Personal Income Tax Act. Since 2011, he has been a partner in a UK LLP engaged in financial services and systematic investment strategies.

The LLP:

– Is not subject to a personal income tax in the United Kingdom.
– Attributes its profits directly to its partners, irrespective of actual distribution.
– Maintains the nature of the income at partner level.
– Has no offices, clients, assets, bank accounts, or business presence in Spain.
– The partner performs no professional activity in Spain for the LLP and holds no authority to contract on its behalf in Spain.

The Issue Raised:

Article 93(1)(c) of the Spanish Personal Income Tax Act requires that, in order to remain within the special regime, the taxpayer must not obtain income deemed to be derived through a permanent establishment located in Spain.
The question was therefore whether the mere attribution of profits from the UK LLP could be regarded as income obtained through a Spanish permanent establishment, thereby jeopardizing the application of the Beckham regime.

The Position of the Tax Authorities:

First, the Spanish Tax Authorities conclude that the UK LLP is analogous, for Spanish tax purposes, to a tax-transparent entity (entity under an income attribution regime), since it is not subject to entity-level income taxation and its profits are automatically attributed to its partners.

However, the decisive factor is whether the LLP carries out an economic activity in Spain. The Directorate General of Taxes determines that no permanent establishment exists because:
– The business activity is carried out entirely in the United Kingdom.
– There are no premises, personnel, or material resources in Spain.
– There are no Spanish clients or assets located in Spain.
– The partner does not organize or manage business resources in Spain on behalf of the LLP.

Accordingly, the requirements of Article 93(1)(c) are not breached, and the taxpayer may continue to benefit from the special expatriate regime.

Conclusion:

This ruling provides important clarity and reassurance: the mere attribution of profits from a foreign tax-transparent entity does not, in itself, give rise to a permanent establishment in Spain.

The determining factor is not tax transparency as such, but the actual existence of an economic activity carried out in Spanish territory. This interpretation is particularly relevant for internationally mobile professionals who retain interests in foreign transparent structures prior to relocating to Spain.

Recent Supreme Court rulings have significantly strengthened the position of the taxauthorities in procedures for verifying values in Property Transfer Tax (ITP).
Specifically, the High Court has confirmed that the Treasury may use mortgage appraisals as the tax base when they exceed the price declared in the deed.
This line of case law, consolidated in STS 1915/2024 (4 December), STS 1942/2024 (9 December) and STS 1976/2024 (17 December), represents a significant change in real estate tax practice and requires both buyers and advisors to rethink their strategy.

The core of the debate lies in Article 57.1.g of the General Tax Law, which allows the Administration to verify the value of the transferred assets by means of the mortgage appraisal carried out for the granting of loans.
The Supreme Court has confirmed that this method:
– Is a legally valid means of verification.
– Does not require additional justification when there is an objective discrepancy between the declared price and the appraisal value, although the action must be technically justified.
– Can be used without the need to provide a supplementary administrative expert report.

The practical consequence is clear: if the bank appraisal is higher than the registered price, the Administration may issue a supplementary assessment based on that value, while respecting the taxpaye’s right to challenge it.

Although the mortgage appraisal strengthens the Administration’s evidentiary position, it does not constitute a formal reversal of the burden of proof. The taxpayer retains the right to challenge, having to technically prove that the appraisal does not reflect the real value of the property, justify unique circumstances (state of repair, encumbrances, limitations, etc.) or promote a contradictory expert appraisal with sufficient technical support.

In this new context, prevention and specialised advice are essential to minimise tax contingencies and avoid unexpected additional assessments.

At MDG Advisors, we analyse each real estate transaction with a preventive and strategic approach, designing solutions adapted to possible tax audits and optimising our client’s tax security.

Many business owners are unaware that a simple change in their turnover can require
them to file more tax returns, undergo an audit, or lose tax benefits. For this reason, it is crucial to review net turnover, especially at the end of the fiscal year.

One of the first limits we encounter is that of 100,000 euros, which means that remuneration paid for the position of administrator is subject to a fixed withholding tax of 35%, instead of 19%.

In larger companies, we may encounter the limit of 1 million euros in turnover, losing the exemption from Business Tax.
For larger companies, if the volume of operations during a calendar year exceeds €6,010,121.04, the entity is considered a large company for tax purposes from the following year. This gives rise to the obligation to notify the Tax Agency of this status using Form 036.
In addition, the company must submit monthly self-assessments of withholdings and VAT, and must also comply with the obligations arising from the Immediate Supply of Information. The latter exempts it from submitting Form 347 and the annual VAT summary via Form 390.

Finally, the obligation to submit installment payments must be fulfilled in accordance with the provisions of section 3 of article 40 of the Corporate Income Tax Law, which must be submitted in both cases of profits and losses.
Another important limit is reached when the net turnover exceeds 10 million euros, at which point the company is no longer considered a small business (ERD) and, as a result, certain tax incentives (free depreciation, accelerated depreciation, losses due to impairment of credits for possible debtor insolvency, tax base equalization reserve) no longer apply.

When this limit is exceeded, in addition to the requirements indicated in the previous limit in relation to installment payments, there is a requirement to pay a minimum amount in the case of profits.
We must not forget that in companies with high and sustained business amounts over several financial years, an audit of accounts may be mandatory if, over several financial years, the INCN remains above €5.7 million, together with certain asset and employee requirements.

If your company has exceeded any of these limits, or any higher limits, and you have questions about your obligations, please do not hesitate to contact MDG Advisors, and we will help you resolve your doubts.

In an increasingly interconnected world, labour relations have transcended
national borders. Millions of international workers — migrants, expatriates and
remote employees — are now an essential part of the global economy.
However, their integration into labour markets poses legal, social and economic
challenges that require urgent attention.

According to data from the International Labour Organisation (ILO), more than
160 million people work outside their country of origin. These workers support
key sectors such as construction, agriculture, domestic work, technology and
health services.

The rise of remote work, driven by the COVID-19 pandemic, has also
transformed international labour relations. Companies based in one country can
hire talent on another continent, which opens up opportunities but also raises
questions about applicable legislation, social security and trade union rights.
One of the main challenges is to ensure that international workers receive the
same treatment as nationals. Instruments such as the conventions promoted by
the International Labour Organisation and the United Nations seek to establish
minimum standards in areas such as wages, working hours, safety and health
at work, and freedom of association, among others.

Governments face the challenge of balancing the attraction of foreign labour
with the protection of local employment. Meanwhile, multinational companies
must adapt their internal policies to diverse and, in many cases, contradictory
regulatory frameworks.

Experts in international labour law emphasise the need for bilateral and
multilateral agreements that harmonise rules on contributions, pensions and the
recognition of professional qualifications.

International labour mobility will continue to grow in a context of ageing
populations in developed countries and labour shortages in strategic sectors.
The key will be to build more inclusive, transparent and coordinated labour
systems at the global level.

Ensuring decent conditions for international workers is not only a matter of
social justice, but also of economic stability and sustainable development.

Every year, many companies make their Corporate Income Tax prepayments almost
automatically, without stopping to consider whether the calculation method they are
using is still the most appropriate. However, choosing the right option can make a
significant difference to a company’s cash flow.
The Spanish Ley del Impuesto sobre Sociedades provides two different methods for
calculating these advance payments. One, regulated under Article 40.2, is based on
the results of the last filed financial year. The other, set out in Article 40.3, is based on
the actual performance of the current financial year. The difference is not minor: it can
mean paying more or less tax in advance throughout the year.
Imagine that your company closed last year with high profits due to a one-off
transaction or an exceptional peak in sales. However, the current year has started
more cautiously: the market has slowed down, new investments have been made, or
results are simply more moderate. If you keep the meth
od based on the previous year’s figures, your advance payments will be calculated on
a reality that no longer reflects your current situation. In practice, you could be
advancing tax on profits you are not actually generating this year.
By contrast, the method provided for in Article 40.3 allows payments to be aligned with
the company’s real-time performance. It is not about paying less tax overall, but about
matching advance payments to actual results and avoiding unnecessary pressure on
cash flow.
This decision should not be taken by default. The beginning of each financial year is an
ideal moment to review projections and assess which option best fits the expected
development of the business.
Making the right choice can help you protect cash flow during periods of lower
profitability, adjust advance payments to the current year’s economic reality, and avoid
excessive prepayments that may affect the company’s financial capacity.
In short, advance Corporate Tax payments are not just an administrative formality.
They are a tax planning tool. Taking the time to analyse which method to apply can
make the difference between overpaying in advance or keeping those resources
working within your business.

MDG Advisors has reinforced its Labor Department with the appointment of Montse Buitrago as its new manager. This addition is part of the firm’s strategy for growth and specialization in key areas, responding to the increasing demand for labor advisory services from companies across various sectors.

Montse Buitrago brings over 20 years of experience in the labor field. She holds a diploma in Labor Relations and a degree in Labor Sciences from the University of Málaga, with a specialization in labor jurisprudence, enabling her to provide a technical and up-to-date perspective in a constantly evolving regulatory environment.

Her appointment addresses the growing need for specialized labor advice, especially in high-complexity sectors such as technology, where talent management, regulatory compliance, and adaptability are key factors for success.

With Montse leading the labor area, MDG Advisors strengthens its commitment to excellence in service and personalized attention, ensuring clients receive effective solutions tailored to each company’s unique needs.