Spain: new limits to the tax deductibility of interest

By Carlos Rodríguez

The Spanish government has asked an experts committee to prepare a report with proposals for the tax reform that the Spanish government is currently drafting.

One of the proposals of the committee is to establish a new limit to the deductibility of financial expenses. Under current regulations, the deductibility of financial expenses is limited to 30 per cent of the ‘adjusted’ EBITDA of the borrower. This restriction is applicable if annual financial expenses exceed €1m (£811,000). The amounts not deducted can be carried forward 18 years with the same limit…

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