Have there been any significant regulatory changes in Spain over the last 12 months?

In the past 12 months, several important reforms in tax and accounting regulations have taken place in Spain, directly impacting advisory firms. The most notable include:

New Tax and Control Regulations: The Spanish Tax Agency has strengthened tax control mechanisms, particularly around electronic invoicing and operational transparency.

Starting from 2025/2026 (exact date pending), all companies and self-employed individuals in Spain are expected to use the Verifactu* system (issuing invoices in electronic format), which enables electronic invoicing and sends information directly to the Tax Agency.

Since 2017, companies with revenue exceeding 6 million euros are required to use the Immediate Supply of Information (SII) system. This system mandates that companies send issued and received invoices within a maximum of four days, facilitating more efficient oversight by the Tax Agency.

Regulation of Cryptocurrencies: In line with EU standards, new regulations for cryptocurrency taxation have impacted the sector’s workload, with a growing focus on transaction transparency and mandatory reporting.

Impact of the Start-ups Law and the Entrepreneurs Law: These laws introduced favourable changes for small and medium-sized enterprises, enhancing advisory opportunities in the technology start-up sector. They encourage entrepreneurship and provide tax, administrative, and commercial benefits for newly created companies or those under five years of age.

Expatriate Law (Beckham Law): This is a special tax regime in Spain, originally adopted in 2005, but new regulations are being introduced in relation to this existing law. It offers tax advantages to foreign workers moving to Spain. Under this law, newly arrived foreigners can choose to be taxed as non-residents for the first six years, allowing them to pay a flat 24% rate on the first 600,000 euros of annual income, instead of the progressive rates applicable to residents. It also provides tax benefits for income earned outside of Spain.

How would you describe the health of the accounting sector in Spain in terms of client demand, fee pressure, and hiring and retention of personnel?

In terms of service demand, it has been high, driven both by regulatory complexity and the growth of new companies requiring advisory services. Increased fiscal oversight and new regulations have generated a steady workflow in the sector.

Despite high demand, many firms face fee pressure due to competition and increasing automation of basic services. Small firms and independent professionals struggle to compete with larger firms that offer more integrated services.

On the other hand, along with high service demand, there is high turnover in the accounting sector, particularly in junior and mid-experience roles. The scarcity of experienced talent, along with long hours during peak periods, such as tax season, has complicated retention efforts.

Firms are exploring retention strategies like teleworking and work-life balance improvements.

Is there any service area where demand has grown over the past 12 months?

Over the past year, service areas experiencing the highest demand growth include Digital Transformation and Automation advisory, driven by organizations seeking more digitalization-related services, including automated accounting tools and electronic invoicing. This trend responds to both the demand for efficiency and compliance with new digital regulations.

Additionally, with the regularization of digital asset tax treatment, advisory for investors and fintech companies has grown.

There is also increased demand for ESG reporting services, as companies work to meet sustainability criteria. This is a specialty becoming more common in accounting firms seeking to expand their service offerings.

Has there been any significant merger or consolidation activity in the accounting profession?

The sector has seen various merger and acquisition activities, mainly among small and medium-sized firms aiming to scale up and compete with large multinational firms. Consolidation allows these small and medium-sized firms to improve efficiency and expand specialized services, helping them offer a more comprehensive approach to clients. It is also a response to fee pressure, which requires economies of scale and operational efficiency to remain competitive.

What are your expectations for the next 12 months? Are there any potentially significant developments?

Over the next 12 months, increased adoption of accounting automation, artificial intelligence, and blockchain technology is expected. Cloud-based accounting is anticipated to remain essential for process optimization and cost reduction.

A greater focus on ESG is also predicted, as the demand for sustainability and ESG advisory continues to grow, particularly if the EU establishes stricter environmental reporting regulations.

Additionally, new tax regulations may emerge, especially in the digital economy and international taxation fields, in line with OECD and EU efforts to regulate global taxation. As previously mentioned, talent scarcity and new workplace strategies present new adaptations, as the difficulty in retaining talent and high turnover in the sector may drive a structural change in firm labour policies, which could adopt more remote work flexibility and seek greater automation to reduce the operational burden on staff.

Overall, the sector in Spain remains strong, with solid demand driven by regulatory complexity and growth in new business areas. However, it faces challenges related to talent retention, fee pressure, and the need for digitalization. The next 12 months are anticipated as a period of adaptation and innovation, where firms will seek to optimize services and explore new growth niches to remain competitive.