Analysis of the information declared in the 'Country by country report - CBC ×

• Spain, pioneer country in publishing a statistical exploitation of the ' Country by Country report ' referring to 2016

• Measured in terms of accrual, not cash, the tax reached 15.5% of profit. The statistics reflect a great dispersion of effective rates

• The analysis collects in aggregate form the information provided by 134 multinationals with annual turnover greater than 750 million and that have a Spanish headquarters.

• The information affects more than 16,000 subsidiaries, of which almost 11,000 are foreign, with a global turnover of more than 934,000 million euros, global net profits of more than 91,800 million and a Corporate Tax paid worldwide of 11,600 million.

November 26, 2019 .- The 134 Spanish multinationals that in 2016 had an annual turnover of more than 750 million euros paid that year worldwide 11,594 million euros for the Tax on Companies, 12.6% of its global profit, which reached 91,849 million euros. Measured in terms of accrual, not cash, the tax reached a total of 14,260 million for these groups, 15.5% of the benefit.

These data appear in the analysis prepared by the Tax Agency based on the information provided by the companies through the 'Country by country' information declaration model 231 ('Country by country report’,  CBC  por sus siglas en inglés) referido a 2016, primer año en el que estaba vigente esta obligación de información que tiene por objeto recopilar datos agregados del colectivo para el intercambio de información entre administraciones tributarias establecido en los acuerdos ‘BEPS' ('Base Erosion and Profit Shifting') of the OECD . The study is published on the Agency's website, Headquarters.agenciatributaria.gob.es .

The analysis carried out by the Tax Agency, a pioneer worldwide, offers aggregated information on the 134 groups and their 16,160 subsidiaries, of which 10,967 are foreign, to maintain the confidentiality requirement established in the agreements themselves BEPS .

With a view to transparency, the aim is thus to provide useful information for the studies and analyses of the general public, and of researchers in particular, contributing to the international debate on the taxation of large corporate groups, on how to distribute it among the countries in which they operate and on the establishment of tax land.

Effective global taxation and distribution by tax rates

The analysis carried out affects groups with a Spanish parent company that globally totaled 934,408 million euros of global turnover in 2016, with global net benefits incorporated by the companies to the  CBC  which totaled 91,849 million euros.

The tax paid by these 134 groups totaled 11,594 million in cash terms. The results show a great dispersion of effective rates on profits. The statistics reflect that only 43 multinationals accounted for 49.1% of the profit of the entire group and, however, they only represented 10.5% of the total fee paid by the group of multinationals.

The analysis of CBC is also carried out in terms of accrued tax. Accrued and paid taxes do not match because the computation criteria is different.

In accrual, the tax will be the net amount for fiscal year 2016, formed by the sum of the fractional payments and the differential amount for the same fiscal year 2016. Instead, the "paid" tax is the combination of the 2016 installment payments and the 2015 differential fee. This difference means that, for example, the applied tax credits that are included in one concept or another (accrued and paid), are different.

Differences between Spanish statistics and CBC

This study complements the information that the Agency has been publishing on the data declared in Companies by individual companies and Spanish consolidated groups.

Until now, the Tax Agency has been publishing statistics based on the data declared in the Corporate Tax in Spain, which present the effective rates at which companies and groups in our country are taxed, calculating these rates both on the tax bases of the tax as well as on the declared accounting results, the latter also including income obtained abroad and likely to have been taxed in other countries.

Therefore, in the case of globalised companies, the information submitted was not complete as information on their taxation was not yet available in the rest of the countries. With this analysis of  CBC The information is completed since, for the first time, the taxes accrued and those considered paid by large Spanish groups throughout the world are published thanks to the 'Country by country' declaration.

In any case, the information referred to CBC is not comparable with that existing in the statistics published by the AEAT on taxation in Spain, as there are large methodological differences.

The main difference lies in the concept of 'benefit' included in the   CBC and the one that appears in the Consolidated Annual Accounts of Companies published by the Agency. CBC refers to a net benefit; i.e. after deducting the losses of all the subsidiaries of a group in the same tax jurisdiction.

On the other hand, the Annual Accounts take as a reference the gross profit (they do not consider losses), which is understood as a more precise measure and closer to the philosophy of a tax that only aims to tax positive results.

By taking net profits, discounting losses, the resulting tax rates are higher than those that would be obtained if the CBC included the gross profit.

What is ' CBC '?

He ' Country by country ' ( CBC ), or 'Country by country' information, is a model of informative declaration that must be submitted, at your tax domicile of residence, the parent companies of multinationals with a consolidated net turnover worldwide of more than 750 million euros. The information, which must affect all the entities forming part of the tax group, is presented in Spain using form 231 of the tax return and corresponds to filings for Spanish parent multinationals.

The objective of CBC is to collect aggregated and anonymized data from this group of large multinationals for the exchange of information established in actions 11 and 13 of the 'Agreements BEPS ' (Acronym in English of Base Erosion and Profit Shifting, so that States are provided with a global perspective of the intra-group activity of their largest multinationals.

The information sent by the parent companies of all their foreign subsidiaries for the fiscal year beginning on January 1, 2016 includes details of the following variables for each of the jurisdictions (countries) in which they operate:

• Number of entities (subsidiaries) forming part of the group

• Turnover

• Profit (loss) before tax

• Corporation tax (paid and accrued)

• Capital and reserves

• Number of employees

• Tangible assets (property, plant and equipment)