The fiscal consolidation regime is a key tool for corporate groups looking to optimise their taxation. At Resitax, experts in taxation in Mallorca, we support companies through our specialised tax advisory services in Mallorca to legally and safely reduce their tax burden.
This regime allows all companies within a group to be treated as a single taxpayer for Corporate Income Tax purposes, generating numerous advantages and opportunities for tax optimisation.
Main Advantages of the Fiscal Consolidation Regime
1. Immediate Compensation of Losses and Profits Within the Group
This regime allows a corporate group to offset the tax losses of some companies with the taxable profits of others within the same fiscal year.
This provides:
- A reduction of the group’s tax base
- A more efficient annual tax outcome
- A stabilising effect when different subsidiaries have different economic results
2. Easier Application of Tax Incentives and Deductions
The requirements and limits for tax incentives and deductions are assessed at group level.
This means:
- It is easier to meet the necessary conditions
- The group can benefit from more tax advantages
- Fiscal planning becomes more efficient and centralised
3. Tax Neutrality in Intra-Group Transactions
Profits generated from transactions between companies of the same group are not taxed until these operations are carried out with third parties.
This results in:
- Greater tax efficiency
- More flexibility for internal restructuring
- More efficient corporate asset management
4. Simplification of Tax Obligations
The fiscal consolidation regime also reduces the administrative burden by:
- Simplifying withholding tax obligations
- Reducing transfer pricing documentation
- Centralising tax filings through a consolidated declaration
Requirements to Apply the Fiscal Consolidation Regime
1. Existence of a Parent Company (Holding)
There must be a parent company that:
- Holds at least 75% of the share capital of its subsidiaries (70% if the parent company is listed)
- Holds the majority of voting rights
- Maintains the participation directly or indirectly
What if the Holding Company Is Foreign?
If the parent company is not resident in Spain, its Spanish subsidiaries may still apply the fiscal consolidation regime provided the requirements are met.
This is common in international groups with subsidiaries operating in Mallorca.
2. Mandatory Inclusion of All Companies in the Group
When applying the regime:
- All companies owned at least 75% must join the consolidated group
- None of them can be excluded
- The group must be properly structured for tax purposes
3. Approval by All Boards of Directors
It is essential that:
- All companies (the holding and all subsidiaries) approve the application of the regime
- The decision is taken before the end of the fiscal year
- The agreement is communicated to the Tax Agency within the required deadline
- The regime applies from the following fiscal year onwards
Is This Regime Suitable for Your Company or Corporate Group?
Applying the fiscal consolidation regime requires expert analysis. It is not advisable to apply it without evaluating:
- The structure of the corporate group
- The individual accounting results
- The projected tax impact at the consolidated level
Resitax Helps You Make the Right Decision
As experts in taxation in Mallorca, we analyse:
- Whether your company meets the requirements
- How much your group could save
- Whether restructuring the group could bring additional tax benefits
- Any risks or incompatibilities based on your sector or operations
You can contact us directly through our website for a professional assessment.
Conclusion: A Key Opportunity to Optimise Your Group’s Taxation
The fiscal consolidation regime is one of the most powerful tools for reducing the tax burden and improving the fiscal efficiency of corporate groups.
If your company belongs to a group or you are considering creating a holding structure, Resitax can help you determine whether this regime is the right option for your case through our specialised tax advisory service in Mallorca.
For personalised assistance or specific questions, feel free to get in touch with us through our contact page.
