The Spanish government on March 9 amended the Corporate Income Tax law and the Non-Resident Income Tax law to address hybrid mismatches. The stated purpose of these amendments is to enact into Spanish domestic law the anti-hybrid rules included in EU Directive 2016/1164, dated July 12, 2016 (‘ATAD 1), as amended by EU Directive 2017/952, dated May 29, 2017 (ATAD 2).
The Royal Decree law was published in the Spanish Official Gazette on March 10, 2021 and entered into force the following day. The new rules effectively apply to tax years not finalized when the new rules entered into force (March 11, 2021).
Given the effective date of the new rules, MNEs with interests in Spain should consider whether any hybrid mismatches already are negatively impacting their current tax year and address them accordingly.