The 126 Spanish multinationals that in 2020 had an annual turnover of more than 750 million euros paid corporate tax at an average effective rate of 24.77%, adding the tax paid both inside and outside the country. However, while in Spain the tax stood at 21.83% on average, in the rest of the European Union it rose to 29.03%, a difference of more than seven percentage points. There is also a notable gap between Spain and the rest of the world’s jurisdictions, in which the effective rate stood at 26.12%.

The data is taken from the fifth edition, corresponding to the year of the pandemic, of the analysis prepared by the Tax Agency based on the information provided by large companies through the country-by-country information declaration model 231 (CBC for its acronym in Spanish). in English).

The trend is similar when analyzing the effective rate accrued figures. On average, this fiscal indicator stood at 17.5% in Spain, rising to 21.86% in the rest of the EU and 23.42% in non-EU countries. In other words, although the rate paid and the rate accrued are usually different due to the existence of accounting and tax adjustments, due to terms and due to tax deductions and credits, the differences between Spain and the rest of the countries remain.

Together, these large groups, which in turn encompass a total of 14,854 subsidiaries, paid 12,502 million euros in corporate tax worldwide, 16.5% less than in 2019. The figure represents 24.77 % of its profit, which amounts to 50,471 million euros (43.7% less than in 2019). As a whole, the multinationals added a worldwide turnover of 759,300 million euros, 18.7% less than the previous year.

The results of the 2020 statistics are strongly conditioned by the effects of the coronavirus health and economic crisis. Specifically, they explain from the Tax Agency, the existence of much higher effective rates than in 2019 is caused because the result is declared as the balance between profits and losses by jurisdiction.

In other words, the losses caused by the pandemic have notably pushed up the average effective rates when calculated on net results. All in all, if you look at the data for 2019, the amounts actually paid in Spain (12.96%) were also below the rest of the EU (15.49%) and the world (21.45%).

effective rates

The average effective rate paid by the large Spanish multinationals differs enormously from one to the other. Of the 126 groups subject to the declaration, a total of 31 supported an effective tax of only 1.75% of the benefits, paying only 88 million euros in 2020 on a joint net result of 5,043 million.

In addition, another 15 multinationals were subject to a rate of 8.64%, another six groups to a tax of 11.46% and another 18 to a rate of 16.31%. In other words, more than half of the groups supported an effective tax of less than 20%. At the top of the table are 13 multinationals with a rate of 23.22% and another 43 with an average tax rate of 42.51% (which in the case of taxes paid in Spain stands at 72%). . The latter jointly paid more than 8,500 million euros on a profit of more than 20,000 million.

The very high average rates of the last group, according to legal sources, are distorted by the tax planning practices that many multinationals implemented in the year of the pandemic. In fact, in previous years, the highest effective rate is up to 10 percentage points lower than that registered in 2020. The “effective rates” of the statistic “are always overestimated, but the bias is even greater the greater the losses recorded, without this distortion being able to be purged ”, details the organization.

Distortion

The Tax Agency recognizes that the statistics overestimate the losses and distort the series. According to an example provided by the agency itself, if a Spanish group has two subsidiaries in Germany, one with 100 million euros in profits and the other with 120 million in losses, the statistics would mean that the net result is negative 20 million. However, if in Brazil a subsidiary earned 100 million and another lost 80, the statistics would only take into account the positive difference of 20 million euros. That is, the 200 million gross benefits are not counted, continuing with the same example.

The country-by-country report, promoted by the OECD, obliges Spanish multinationals with a worldwide turnover of more than 750 million euros to present complementary data on their activity and that of their subsidiaries. Specifically, they must give accounts of their number of subsidiaries, turnover, their workers, the benefits they have obtained before taxes and the amount they pay in each of the territories.

By countries

The figures shown by the Tax Agency make it possible to disaggregate by jurisdiction how much large multinationals pay in corporation tax. According to the data presented this Wednesday, of the 12,501 million paid by the groups worldwide, some 4,300 million went directly to Spain. In the other 26 countries of the European Union, almost 6,000 million were disbursed and in the rest of Europe, just over 1,000 million. In America, on the other hand, 4,800 million were paid.

Within the EU, most of the tax went to Germany (343 million) and Poland (311 million). Another 257 million euros arrived in Portugal and 198 million in the Netherlands. In other low-tax territories such as Luxembourg and Ireland, multinationals paid 37 and 20 million euros, respectively.

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