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Practical Handbook for Companies 2021

Joint tax system with the Basque Country

This section on page 26 of form 200 must be completed by all those corporate income taxpayers who must jointly pay tax to the State Administration and the Provincial Councils of the Basque Country, provided that, in addition, are subject to the regulations of the State.This group of taxpayers are those who meet one of the following two circumstances, in accordance with the provisions of the Economic Agreement with the Autonomous Community of the Basque Country approved by Law 12/2002, of 23 May (amended by Law 28/2007, of 25 October, by Law 7/2014, of 21 April, by Law 10/2017, of 28 December and by Law 1/2022, of 8 February):

  • Who, having their tax domicile in common territory, carry out operations in both territories (common and foral) during the tax period and that their volume of operations in the immediately preceding financial year has exceeded 10 million euros.

  • Who, having their tax domicile in foral territory, carry out operations in both territories (common and foral) during the tax period, their volume of operations in the immediately preceding financial year has exceeded 10 million euros and the total of the operations carried out in common territory constitute, at least, 75 per cent of the total of those carried out in the preceding financial year.

The above criteria are also applicable to non-resident income taxpayers who obtain income subject to non-resident income tax through a permanent establishment.

In addition, the following details should be taken into account :

  • The instalment payments will be made in proportion to the volume of transactions carried out in each territory in accordance with the proportion determined in the last tax return.

  • The tax groups are subject to the foral tax consolidation regime when the parent entity and all subsidiaries were subject to foral regulations under the individual taxation regime.They will also be subject to the common territory tax consolidation regime when the parent entity and all subsidiaries are subject to the common territory tax regime under individual taxation.For this purpose, companies that are subject to the other regulations are considered excluded from the tax group.

    In accordance with the provisions of the twelfth additional provision of the LIS, for the purposes of the tax consolidation regime established in Chapter VI of Title VII of the LIS, tax groups in which the parent entity is a entity resident in Spanish territory and subject to the foral regulations on corporate income tax in accordance with the Economic Agreement with the Autonomous Community of the Basque Country, will be treated in the same way as tax groups in which the parent entity is a non-resident in Spanish territory.

  • The tax regime of the economic interest groupings and temporary joint ventures corresponds to the Basque Country, when all the entities comprising them are subject to provincial legislation.

A tener en cuenta:

In the event of starting the activity in the financial year, for the calculation of the figure of 10 million euros, the volume of operations carried out in that financial year shall be taken into account.

In the event that this financial year is less than one year, for the purpose of calculating the above figure, the operations carried out shall be per year.

Until the volume and place where the operations are carried out are known, they will be taken as such, for all purposes, as those estimated by the taxpayer on the basis of the operations that he expects to carry out during the financial year in which the activity begins.

See the summary table on the criteria for determining the applicable regulations for corporate income tax purposes in the Basque Country.