The debate on multinational taxation is not only logical but also necessary. The rise of digital companies (the now famous “bigtechs”) and the difficulties in determining the profits generated by their activities mean that, de facto, local taxes are not paid on profits earned in each country. Furthermore, we cannot deny that, even within the EU, there is tax competition between states, which allows some of these companies based in countries like Luxembourg, Ireland, or the Netherlands to benefit from lower corporate income tax. These issues must be discussed in Brussels and within the OECD framework in Paris, and not at a national level, where this problem does not exist.
However, in the heat of this logical, sensible, and necessary debate, arguments are being put forward that are simply inadmissible because they do not reflect the truth. Thus, it is not true that companies with multinational operations pay low taxes in Spain. This can be analyzed in two ways. One, more orthodox, is to take the profit generated in Spain (or, even better, the taxable base) and compare it with the corporate income tax paid in Spain. The other, less orthodox but also informative, is to divide the profits generated in the countries where Spanish companies are established by the corporate income tax paid in those countries. According to the OECD, the first calculation yields a result of 24.8% for Spanish companies, a figure that is 23% higher than the average for countries in that organization. The second calculation, in this case for Ibex 35 companies, shows that the taxes paid represent 27.8% of their profits. Therefore, it is not true that Spanish multinationals do not pay taxes or that these taxes are low.
What would happen if, ignoring these arguments, companies were taxed again in Spain for profits generated abroad? A problem of double taxation would arise (paying taxes twice on the same taxable event). This double taxation goes against the principles of “economic capacity” and “non-confiscation.” But, above all, it would make the existence of multinational companies in Spain unviable. This is why Spanish tax authorities have signed more than one hundred (yes, one hundred) bilateral double taxation agreements with as many tax authorities and countries. This problem is neither new nor unknown.
In this sense, it can be understood that the public debate on complex issues can sometimes be confusing. It is also true that the publication of poorly designed statistics does not help a calm and technical debate.
Following this debate, the fundamental question is what we want for Spain. Do we want an economy with large international companies that carry our country’s name around the world? Or do we prefer, for the sake of ill-conceived tax justice, that they end up leaving Spain to settle in other European countries? The answer seems obvious, doesn’t it? At least, I hope so.
José María Roldán, Chairman of the Spanish Banking Association
