Spain's High Court said Volkswagen's parent company, based in Germany, would be liable to answer any charges over emissions fraud, rather than its Spanish affiliates.
A Reuters report noted VW admitted in September to cheating US diesel emissions tests and said that up to 11m vehicles worldwide could be fitted with illegal software.
The carmaker had said the Spanish probe, accusing it of fraud in relation to exhaust emissions and pollution from its diesel engines, should be directed at its Spanish affiliates Seat, Volkswagen-Audi España and Volkswagen Navarra.
The court opened initial proceedings against VW in October with around 700,000 diesel vehicles in Spain, mostly VW and Seat models, believed to be affected.
Several lawsuits around the world have been leveled at the company and on Thursday it was told it must pay an additional US$86m in penalties in California on top of a $14.7bn US settlement last week, Reuters added.