Statistical use of the 2017 'CbC Report'.

• The analysis of the second CbC gathers together the information supplied by 112 multinationals with an annual turnover of more than 750 million and with a head office in Spain
• There is still a wide dispersion of effective rates and half of the profit is concentrated in 57 multinationals, which, however, only contribute 17.6% of the tax paid by the group as a whole.
• The information affects almost 15,000 subsidiaries, of which more than 9,900 are foreign, with a global turnover of more than 806,000 million euros, global net profits of more than 88.4 billion and an amount of Corporation Tax paid worldwide of 15 billion

February 25, 2021 .- The payment of Corporate Tax worldwide amounted to 15,017 million euros for the 112 Spanish multinationals that in 2017 had an annual turnover of more than 750 million euros. This total amount of tax paid represented 17% of their overall profit, which amounted to 88.4 billion euros. Measured on an accrual basis, not on a cash basis, the tax reached a total of 14.79 billion for these groups – 16.7% of profit.

The data are included in the second edition of the analysis prepared by the Tax Agency based on the information provided by the companies through form 231 of the 'Country by Country' ('CbC'), a declaration whose purpose is to compile aggregate data on the collective for the exchange of information between tax administrations established in the OECD agreements ‘BEPS’ (Base Erosion and Profit Shifting). The study is published on the Agency's website, www.agenciatributaria.es .

The analysis carried out by the Tax Agency provides aggregate information on the 112 largest Spanish parent groups and their 14,996 subsidiaries, of which 9,939 are foreign. These multinationals together had a global turnover of 806 billion euros in 2017.

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.

Distribution by effective rate tranches

The second edition of these statistics again shows a wide dispersion of effective rates on profits. According to the data provided by the companies themselves in their CbCs, the 57 companies with the lowest effective tax rates only accounted for 17.6% of the tax paid by the group as a whole, despite accounting for 50% of the profit.

The CbC analysis is also carried out on an accrual basis. Accrued and paid taxes do not match because the computation criteria is different.

On an accrual basis, the tax will be the net tax liability for fiscal year 2017, made up of the sum of the payments in instalments and the differential tax liability for the same fiscal year 2017. In contrast, the tax “paid” is the combination of the 2017 instalments and the 2016 differential amount. This difference means that, for example, the tax credits applied, which are included in one item or another (accrued and paid), are different. 

Purpose of the analysis and differences with Spanish statistics

The CbC study complements the information published by the Tax Agency on the data declared in Companies by individual companies and consolidated Spanish groups.

The Tax Agency has been publishing statistics based on the data declared in Spanish Corporation Tax, where the effective rates at which companies and groups in our country are taxed, calculating these rates both on the taxable bases of the tax and on the accounting results declared, including income obtained abroad and which may have been taxed in other countries in the latter.

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. This CbC analysis completes the information given that the taxes accrued and those considered to be paid by the large Spanish groups throughout the world are published thanks to the 'Country by Country' declaration.

In any case, the information referring to the CbC is not comparable with that existing in the statistics published by the Tax Agency on taxation in Spain, as there are great methodological differences.

The main difference lies in the concept of ‘profit’ included in the CbC and in the Consolidated Annual Accounts of Companies published by the Tax Agency. The CbC makes reference to a net profit; 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.

When net profits are taken in the CbC, discounting losses, the resulting tax rates are higher than those that would be obtained if the CbC included the gross profit. 

What is the 'CbC'?

'Country by Country' (CbC) information is an informative declaration form that must be filed, at their tax addresses, by the parents of multinationals with consolidated net turnover at a global level superior to 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 the CbC is to collect aggregated and anonymised data from this collective of large multinationals for the exchange of information set out in actions 11 and 13 of the 'BEPS Agreements' so as to provide States with a global perspective of the intra-group activity of their largest multinationals.

The information submitted by the parent companies of all their subsidiaries abroad for the fiscal year beginning on or after January 1, 2017 includes the 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)