The recent developments in the Spanish Corporation Tax have hit several features of Spanish holding companies that made them one of the most useful in internationa tax planning. The most important legal change is the limitation in the deduction of interest. Now interest payable can only be deducted up to the 30 % of the company operating profit or 1 million Euros (the lower). The one million Euros threehold intends not to penalize highly leveraged small and medium size companies. The non deductible amount can be deducted, with the same limits, in the following 18 years.