Group taxation: tax consolidation (220 and 222) and VAT group (039, 322 and 353)

There are 2 distinct and independent group regimes: Corporate Income Tax consolidation (chapter VI of title VII of Ley 27/2014, the Spanish Corporate Income Tax Act) and the special VAT group regime, known as REGE (articles 163 quinquies and following of Ley 37/1992, the Spanish VAT Act). Both are voluntary, applied before Hacienda (the Spanish Tax Agency), and you can opt for one without the other.

In Corporate Income Tax the main advantage is immediate: the losses of one group company are subtracted in the same financial year from the profits of the others, without waiting years to offset negative tax bases. Furthermore, the results of internal operations are eliminated and deferred until they leave the group, no withholdings are applied to intragroup payments and operations between companies of the tax group are excluded from the transfer pricing documentation obligation.

In VAT the advantage of the basic modality is financial: the balance to be refunded of one company is offset every month against the balance to be paid of another, so the group stops advancing money to Hacienda while waiting for refunds. The advanced modality adds advantages for sectors with a pro rata rule (healthcare, education, financial, real estate), because intragroup operations are valued at cost.

In return, the group entities are jointly and severally liable for the tax debt of the regime (in Corporate Income Tax excluding penalties), there are more formal obligations (monthly calendar and SII in the REGE) and the VAT option commits you for a minimum of 3 years. Managora reviews your case and tells you if the group is worthwhile before you opt in.

Groups can consolidate when a dominant entity owns, directly or indirectly, at least 75% of the capital of its subsidiaries (70% if they are listed companies) and the majority of the voting rights, and maintains this participation throughout the entire tax period (article 58 LIS). The entities of the tax group must be resident in Spain and the dominant entity cannot be, in turn, a subsidiary of another that meets the requirements.

The dominant entity can be a foreign entity (not resident in a tax haven): in this case the sister Spanish subsidiaries consolidate with each other and one of them acts as the representative entity of the group before the AEAT (the Spanish Tax Agency). This is called a horizontal group, which has been possible since 2015.

Once opted in, the regime obligatorily covers all companies that meet the requirements: you cannot choose which ones enter. The option requires the agreement of each and every one of the entities (adopted on any date of the previous tax period) and applies indefinitely as long as it is not renounced or the requirements are not breached.

Form 220 is the annual Corporate Income Tax self-assessment of the group and is submitted by the representative entity. The consolidated tax base is formed by adding the individual bases, with the eliminations and incorporations of internal results, and applying the negative bases and deductions of the group. Each company also submits its individual form 200, without paying any fee, for informational purposes.

The deadline for form 220 is the same as for form 200 of the representative entity: the 25 calendar days following the 6 months after the end of the financial year (article 124 LIS). For financial years ending on 31 December, it is submitted in July: in the 2026 campaign (2025 financial year), as the 25th falls on a Saturday, the deadline reached 27 July, with direct debit until 22 July according to the AEAT electronic headquarters.

Form 222 is the instalment payment of the group and is also submitted by the representative, 3 times a year: from 1 to 20 April, October and December. There are 2 modalities: that of article 40.2 LIS (18% of the quota of the last financial year) and that of article 40.3 LIS on the running base of the year itself, mandatory when the net turnover amount of the group exceeds €6 million. If the net turnover reaches €10 million, the percentage rises to 24% and a minimum payment of 23% of the accumulated positive accounting result operates. Form 222 is always submitted, even if there is no quota to pay.

Groups formed by a dominant entity and its subsidiaries can apply the REGE when the dominant entity has effective control with over 50% of the capital or voting rights, maintains this participation throughout the calendar year and does not depend on another entity established in Spain that could be dominant (article 163 quinquies LIVA). All headquarters or establishments must be located in the Spanish VAT application territory, and no entity can be in 2 groups at the same time. The dominant entity must have the status of entrepreneur or professional: a pure holding company, merely holding shares and without economic activity, cannot be a dominant entity according to the criteria of the Directorate General for Taxation.

Unlike Corporate Income Tax, the REGE is voluntary entity by entity: only the subsidiaries that agree to it individually in their board of directors enter, although the dominant entity must always apply it. The option has a minimum validity of 3 years and is automatically extended unless renounced.

The basic modality is limited to offsetting the balances of the self-assessments of all members. The advanced modality, which is activated by ticking the option on form 039 and has a minimum validity of 1 year, values intragroup operations at the cost of the goods and services used, converts these operations into a differentiated sector with a special pro rata rule and allows renouncing the exemptions of article 20.Uno LIVA in intragroup operations (article 163 sexies.Cinco LIVA), a renunciation especially useful in insurance and financial operations. This is the one that interests groups with exempt or pro rata activities.

In the REGE the settlement period is always monthly and the members are obliged to the Immediate Supply of Information (SII), keeping their record books at the electronic headquarters of the AEAT. Each entity of the group submits its individual form 322 and the dominant entity submits the aggregated form 353 for the same period, which adds up the results of all the 322 forms.

The deadline for both is from the 1st to the 30th of the month following the period; the January self-assessment is submitted until the last day of February. The aggregated result of form 353 is the only thing that is paid or offset; if the group wants a month-by-month refund, it can register in the monthly refund register (REDEME) using form 039 itself.

2 practical details: the balances to be offset that an entity generated before joining the group are not integrated into the aggregated balance, they are recovered individually; and, as all members are in the SII, they are generally exempt from the annual summary (form 390), filling in the additional information in the self-assessment of the last period of the year instead.

In Corporate Income Tax, the representative entity communicates the consolidation agreements to the AEAT before the start of the tax period in which it is applied and the Administration assigns the tax group number. Variations in the perimeter (companies that enter because they reach 75% or leave because they stop complying) are communicated in the first instalment payment (form 222) affected by the new composition.

In VAT everything goes through form 039: the initial option and the renunciation are submitted in December of the year prior to the one in which they must take effect; modifications to the perimeter and the incorporation of newly created entities are communicated within the deadline of the self-assessment of the period in which they occur; and the dominant entity also submits the annual communication of the group's composition in December (article 61 bis of the VAT Regulation). The AEAT assigns the group its entity group number.

Managora takes care of the entire circuit: we prepare the agreements, submit form 039 or the consolidation communication, manage the monthly calendar of forms 322 and 353, the instalment payments of form 222 and the annual closing with form 220. As this is a tailor-made service for each group, request it from the procedure file and Managora will study your case and send you a proposal adjusted to your perimeter and volume.