The new Spanish Anti Fraud regulations contain changes in different rules, most of them of a tax nature. The double purpose that its preamble indicates consists in the incorporation of the EU regulations into the Spanish legal system in the area of tax evasion. Besides, it introduces changes in the regulations aimed at assenting tax justice parameters and facilitate the actions to prevent and fight against fraud, reinforcing tax control.
Let us see which are the main changes in the area of the Spanish General Taxation Law.
✔ The new regulations recognise the prohibition to establish any extraordinary mechanism of tax regularization (such as the “tax amnesty”) that implies a reduction of the total tax payable. In this way, it introduces at a legal level the criterion set forth by the Spanish Constitutional Court in its Sentence 73 / 2017 of June 8th.
✔ It clarifies the accrual of late payment interest in case of obtaining an undue refund of taxes, thus being compatible with the payment of late payment surcharges.
✔ Late payment surcharges are modified by establishing a system of increasing percentages of 1% for each complete month of delay, without accruing late payment interest up until 12 months have passed. As from the first day after this 12 months period, besides the 15% surcharge, interest for late payment shall accrue.
✔ Such surcharges are not payable by taxpayers that regularize their tax situation based on a previous tax audit procedure for the same concepts and circumstances but for other periods, providing that it was not subject to any penalty.
✔ Late payment interest shall not accrue in tax refunds during certain periods.
✔ Accounting and management software will need to be adjusted to certain requirements that guarantee the information’s integrity, conservation, accessibility, legibility, traceability and inalterability of the registries.
✔ A specific penalty regime is established due to the production of software which does not meet the above requirements or even for keeping it without a concrete certification.
✔ The list of tax debtors is modified as the limit to be included in it is reduced to 600,000 euro. Consequently, when this threshold is exceeded, the taxpayer shall be included in the list.
✔ In order to avoid recurrent requests for postponements and fractioning of tax debts, whose process suspends the executive period, it is established that such period may also start if previous recurrent requests were denied and the tax debts’ payment was not made.
✔ The reductions on penalties for tax assessments in agreement are increased to 65% while the reduction of penalties due to their prompt payment also increases to 40%.
✔ The holding of crypto currencies must be reported in the Form 720 for overseas assets and rights.
Changes in the area of Spanish Corporate income tax
The new Spanish Anti Fraud regulations contain changes in the area of Spanish Corporate income tax that incorporate measures to apply the EU Directive 2016 / 1164 with the aim of guaranteeing the payment of tax where profits and value are generated, reinforcing the average level of protection against abusive tax planning and establishing rules against the erosion of taxable basis in the interior market and the shift of profits out of it. More information: Hybrid Mismatches
The aspects that are finally incorporated into the Law, out of those ruled out by the Directive, are those relating to the new CFC rules as well as to Exit tax.
Besides and apart from the Directive, new measures are established affecting SICAV and SOCIMIS, amongst others.
✔ The International Fiscal Transparency (CFC rules) implies the assignment of profits to a Spanish resident legal entity of taxable income obtained by a mostly participated subsidiary located abroad when taxation of such income is significantly lower than the one that would have resulted in the Spanish territory. Such assignment takes place irrespective of whether the income has been distributed or not.
✔ With the new regulations, that will become applicable for fiscal years starting as from January 01, 2021, the assignment of profits will affect not only to those obtained by participated entities but also to those obtained by permanent establishments located abroad.
✔ Besides, new types of income that were not included up to now shall be deemed as assignable income, such as financial leases or banking, insurance and other financial activities.
✔ In the area of Exit tax and also applying to fiscal years starting as from January 01, 2021, it is permitted that taxpayers may elect to fraction the payment of this tax throughout five years, when the change of residency is done to another Member State or to a third country that is member of the Agreement of the Economic European Space, subject to complementary requirements. Besides, a new case generating Exit tax is included in the regulations when there is a change, not of an isolated asset, but of the activity undertaken by a permanent establishment.
✔ Note that this tax is aimed at guaranteeing that, when a taxpayer moves its assets or tax residency out of a jurisdiction, such State may levy the economic value of any gain created in its territory, even if such gain has not yet materialized at the time of the change.
✔ For fiscal years starting as from January 01, 2022, additional requirements are established so that the SICAV can apply the 1% tax rate. Only shareholders that hold shares for a value equal to or exceeding 2,500 euro shall be computed. By this way, the collective character of the SICAV is reinforced by trying to avoid that high percentages of shareholders are in the hands of few individuals while the rest of shareholding is distributed between shareholders with immaterial economic interests.
✔ With effects to fiscal years starting as from January 01, 2021, SOCIMI shall be subject to a special tax of 15% on the part of undistributed profits deriving from income that has not been taxed at the general Corporate income tax rate.
The new Spanish Anti Fraud regulations bring a renewed concept of tax haven
A way to tackle tax fraud or evasion within the European Union (EU) consists in the preparation of a list of non- cooperative jurisdictions that foment abusive tax practices. The purpose of such a list does not consist in evidencing which are these jurisdictions but in fomenting a positive change in their regulations and tax practices through cooperation.
The list is updated and reviewed recurrently, twice a year, in the frame of a dynamic follow up of the measures applied by the countries to comply with their compromises, that can ultimately lead to being removed from the list.
On the basis of the international efforts made within the EU and the OECD, the new Spanish Anti Fraud regulations introduce a more dynamic concept of the territories classified up to now as tax havens, extending the eligible jurisdictions on the bases of criteria of fair taxation that apply in the EU list.
✔ With the aim of fighting tax fraud, the reference to tax haven jurisdictions is substituted by non-cooperative jurisdictions, which also implies an expansion of the concept. Thereby, the determination of a non-cooperative jurisdiction will be based on criteria of fiscal equity and transparency, through the identification of countries and territories characterized by:
- (i) Facilitating the existence of entities aimed at the attraction of benefits with no real economic activity;
- (ii) The existence of a low or nil taxation;
- (iii) Their opacity and lack of transparency;
- (iv) The inexistence of applicable regulations for mutual assistance in the area of exchange of tax information;
- (v) The absence of an effective exchange of tax information with Spain; or,
- (vi) Due to the results of the evaluations on the effectiveness of exchange of information with such countries and territories.
✔ Once these criteria will be approved, the Spanish Ministry of Finance will adopt the necessary measures to publish their own list of countries and territories as well as of the detrimental tax schemes, considered as non cooperative jurisdictions, that will need to be updated periodically, hence providing a dynamic character to this list.
✔ Meanwhile the countries and territories qualifying as non-cooperative jurisdictions are not determined, the black list approved by Royal Decree 1080 / 1991 shall remain in force. It must be noted that such list has been reduced up to now by removing the countries that have a Double taxation treaty with international clause of exchange of information or an Agreement to exchange information in the tax area, with Spain.
✔ With these new regulations and based on the mentioned criteria, the new concept of non-cooperative jurisdiction shall not be limited to the exchange of information but also to the effective taxation in the country considered as non cooperative.
Publicado el 09-2021 por PBS
