The tax deductibility of directors´ remuneration is a topic that everyone has been talking for years. The multidisciplinary nature of the matter which cannot be understood if it is not analysed from a triple commercial, labour and tax perspective, and the fact that both Administration and the Courts have pronounced on this matter (and not…
The new Government of the Balearic Islands has abolished the Inheritance and Gift Tax (“ISD”) for acquisitions by death or through inheritance agreements (i.e., inheritance, legacy and inheritance in life) made between parents and children, grandchildren and grandparents, and between spouses. The rule provides that only tax residents in Spain can benefit from this elimination….
The deadline for filing the following tax returns is July 20th, 2023: Form 303: Quarterly VAT return. For taxpayers included in the immediate supply of information (SII) system, the deadline is July 31st, 2023. Form 349: (quarterly/monthly) EC sales list. Form 111: (quarterly/monthly, as applicable) withholdings and payments on account of personal income tax on…
Under the exemption of Article 21 of the Corporate Income Tax Act, companies can transfer shares in other entities and benefit from an exemption of up to 95% of the profit. However, if the transferring entity has the status of an “asset-holding entity”, the exemption does not cover unrealised capital gains, resulting in higher taxation…
Are you an employee working abroad and wish to reduce your tax burden? If so, it is essential that you are aware of article 7.p of the Personal Income Tax Act 35/2006. This legal provision establishes that employees who are tax resident in Spain may apply an exemption to income from work carried out abroad….
Authors: Beltrán Sánchez, Transfer Pricing Partner, and Tomás Luciano Ramin, Transfer Pricing Assistant A few months ago, the Eighteenth Additional Provision was published in the Official State Gazette, concerning Temporary Measures in the Determination of the Tax Base in the Tax Consolidation Regime. At first glance, this measure appears to be controversial, at least…
The Income tax return campaign is already underway and this year the Personal Income Tax (“IRPF” 2022) includes new features that must be taken into account, which we will detail in this article. Deadlines for submission The deadlines to submit the Income tax return, corresponding to the fiscal year 2022, began on 11 April 2023…
With the entry into force on 23 December 2022 of Law 28/2022, of 21 December, on the promotion of the start-up ecosystem, for the first time in Spain, the regulatory framework for innovative new technology-based companies with a scalable and stable business model, known as start-ups, is regulated, including a series of incentives which, in…
Author: Montserrat Carol, Tax Lawyer at Bové Montero y Asociados On December 28th, Law 38/2022 of December 27th was published in the Official State Gazette (“BOE”), which, among other things, provides for the Temporary Solidarity Tax on Large Fortunes (hereinafter, “ITSGF”). The main features of the new tax are as follows: It…
The management of the new Excise Tax on Non-Reusable Plastic Packaging is very complex in practice, both for taxpayers and for the Tax Administration itself Author: Pablo Mateos, Tax Lawyer at Bové Montero y Asociados On 1 January 2023, Law 7/2022 of 8 April on Waste and Contaminated Land for a Circular Economy…
As a follow-up to the newsletter on the “Special tax on non-reusable plastic packaging” of last November, we inform you that on 1st January 2023, Order HFP/1314/2022, of 28 December, also came into force. This Order approves Form 592 “Special tax on non-reusable plastic packaging. Self-assessment” and Form A22 “Special tax on non-reusable plastic…
On December 28, Law 38/2022 of December 27 came into force, creating the Temporary Solidarity Tax on Large Fortunes and amending certain tax regulations. The main new features are summarised below. Temporary Solidarity Tax on Large Fortunes (“ITSGF”[1]) On the one hand, the Temporary Solidarity Tax on Large Fortunes is created to complement…
As of 1 January 2023, the new Personal Income Tax Special Regime for workers posted abroad, also known as the “Beckham Law” or the “Beckham Regime”, which has been introduced by Law 28/2022, of 21 December, on the promotion of the start-up ecosystem, will come into force. The main changes included in the new…
In the following we summarized some important filing deadlines. We hope this information meets your interest. Please keep in mind that 20th of January 2023 is the deadline for filing, among others, the following tax returns (quarterly/monthly – as applicable): Form 111: For withholdings and payments on account of Personal Income Tax on earned…
Article written by: Montserrat Carol, Tax Advisor at Bové Montero y Asociados We hereby wish to remind you that on January 1st, 2023, the “Special tax on non-reusable plastic packaging” will come into force. The tax is levied on the use of non-reusable packaging containing plastics, whether it is empty, or whether it is…
On Thursday, the Spanish Government presented a package of tax measures that would come into force as of 2023. These measures include both structural changes and measures of temporary duration during the years 2023 and 2024. Below we summarise some of these measures. Personal Income Tax (“IRPF”) In order to reduce the…
The judgment focuses on determining the scope of the expression “employment income received for work effectively carried out abroad” provided for in Article 7.p) of the Personal Income Tax Act in order to determine whether it can be applied to all employment income or only to some, in particular, to employment income derived from…
Globalisation and technology have brought about a radical change in the international business model to, among other things, divert profits to countries with low or no taxation. This has been significantly aggravated by the pandemic, and remote work has come to our day, but is it here to stay? It seems to be so. After…
Since the entry into force of Royal Decree 2/2021, of 12 January, approving the Regulation for the implementation of Act 22/2015, of 20 July, on the Auditing of Accounts, commercial companies that fail to register their Annual Accounts in due time with the Commercial Registry may be subject to financial penalties. Until the regulation came…
European online sellers selling goods to final consumers in the US should be aware of the Sales Tax obligations. Sales Tax generally applies to the sale of goods to final customers (B2C sales). It does not apply to sales carried out between businesses. Hence B2B sales fall out of the scope of Sales Tax. Each…
Company directors: application of the exemption relating to earned income received for work effectively carried out abroad Article 7.p) of the Spanish Personal Income Tax Act On 4 November 2021, the High Court of Justice of Catalonia issued an interesting ruling, which we will comment on briefly as, without doubt, it is a…
The CJEU condemns Spain for Form 720 The Court of Justice of the European Union has just published its ruling on the Declaration on assets and rights located abroad (Form 720). With this ruling, the CJEU condemns Spain for failing to fulfil its obligations with regard to the free movement of capital. …
Extemporaneous offsetting of NOLs Authors: Andreu Bové (Partner of Bové Montero y Asociados) and Jorge Bonilla (Tax department of Bové Montero y Asociados) The Spanish Supreme Court confirms through two judgments that the offsetting of Net Operating Losses (NOLs) is a right and not a tax option. With these rulings, the High…
The Constitutional Court has advanced, by means of an informative note, the content of a judgement declaring the unconstitutionality of the Tax on the Increase in Value of Urban Land (IIVTNU), the well-known “plusvalía municipal”. In particular, the Supreme Court declares the unconstitutionality and nullity of Articles 107.1, 107.2 (a) and 107.4 of…
New law on measures to prevent and combat tax fraud[1] The recently published Anti-fraud Act transposes the European Union (EU) law on tax avoidance practices and, in addition, introduces changes designed to establish the parameters for tax justice, and to facilitate actions aimed at preventing and combating fraud by strengthening tax…
Author: Andreu Bové, Partner of Bové Montero y Asociados On 1 July, the scope of the so-called “”One Stop Shop” for VAT will be extended. Currently this “one-stop” tax collection system is already being used for certain telecommunication services. The implementation of this new “One Stop Shop (OSS)” system has as its main…
In light of the recent approval and entry into force of the Digital Services Tax Act and its implementing regulations, affected companies must file their first tax return during the month of July 2021. In this update we will briefly outline the international tax situation and the practical application of this new tax in Spain….
The Spanish General Budget Act for 2021 has introduced several tax changes that aim to increase tax revenues. The national regulation was passed at the last minute, having been published on 30 December 2020 to be applied with immediate effect from 1 January 2021. Some of the main tax measures are: Personal Income…
RDL 19/2020: main commercial and tax changes At Bové Montero y Asociados we summarise and analyse the main tax and commercial changes adopted in Royal Decree-law 19/2020, of 26 May 2020. These include changes to: Deadlines for preparing and approving annual accounts Filing annual accounts with the Commercial Register Deferring tax liabilities Filing…
We highlight some of the latest tax measures introduced by the government, with effect from 23 April 2020: 1. Reduced 0% VAT rate for specific medical equipment. Zero-rate VAT will be applied to supplies of goods, imports, and intra-EU acquisitions of goods when the recipients are hospitals, clinics, public bodies, or private centres that…
From 23 April 2020, electronic books, newspapers, and magazines will be taxed at 4% VAT. Until now, the Spanish Tax Agency had repeatedly responded to queries by applying a higher VAT rate compared to goods supplied in printed format, only allowing the 4% VAT rate for books that had been transferred to reading…
International Tax – COVID-19: OECD Recommendations The OECD has recently issued recommendations on the implications of the COVID-19 crisis on cross-border workers, permanent establishments and the place of effective management of companies. Although these recommendations should be interpreted as soft law (i.e. not legally binding), they can be used as guidance until the Tax…
March 18 saw the publication in the Official State Gazette of Royal Decree-law 8/2020, of March 17, on urgent measures to tackle the economic and social effects of COVID-19, which is effective from the date of publication. We summarise the most relevant Tax measures of this Royal Decree-Law. Granting of powers for Customs clearance: The…
Royal Decree-law 82020_COVID19_ENG March 18 saw the publication in the Official State Gazette of Royal Decree-law 8/2020, of March 17, on urgent measures to tackle the economic and social effects of COVID-19, which is effective from the date of publication. We summarise the most relevant measures of this Royal Decree-Law affecting the following areas:…
Last 14th March saw the publication of urgent tax measures to tackle the economic impact of COVID-19 in the Official State Gazette. Specifically, the possibility of deferring tax payments has been granted to taxpayers (person or entity) whose turnover was under EUR 6.010.121,05 in 2019. This deferral will be applicable to withholdings tax, prepayments, output…
5 February 2020 saw the publication, a little later than scheduled, of Royal Decree-law 3/2020, which transposes various EU Directives and Regulations onto Spanish legislation. Included among these are the VAT “Quick Fixes”, which we analysed in a tax update in October 2019. These changes will come into force on 1 March 2020….
The Spanish Tax Agency has recently launched a special plan to check on taxpayers who repeatedly record tax losses on their Corporate Income Tax returns, which can be carried forward and offset in subsequent periods. The move was revealed in the 2020 General Tax Control Plan, which was recently published and notably includes…
The Supreme Administrative Court of Sweden recently lodged a request for a preliminary ruling with the Court of Justice of the European Union (CJEU), on whether a branch and its principal establishment (that is, its headquarters in another jurisdiction), where the latter is part of a VAT group, are considered independent parties for…
For foreign companies interested in operating in the EU, it is important to know when a structure is regarded as a fixed establishment (FE) for VAT purposes. In this respect, Advocate General Kokott’s preliminary findings in case C-547/18, on whether or not a subsidiary constitutes a FE, are particularly relevant. The events that…
The place of supply of services for VAT purposes in an international context is an issue of great importance. In this case and generally, the place of VAT taxation for services supplied by one business to another (B2B) is the location of the customer’s headquarters. However, the regulation on effective use and enjoyment…
For those employees who must travel abroad to carry out their job, the regulations of the Spanish Personal Income Tax (IRPF) include two different regimes that allow a part of their salary to be exempt from taxation in Spain. However, although the regime provided for in article 7p of the Personal Income Tax…
As of January 1, 2020, the intra-Community VAT measures listed below will come into force. Spain will have to include these rules to its internal legislation before the aforementioned date. However, the current political situation will make it difficult to meet this deadline. Consignment Stock (“Call-off stock”) “Call-off stock” refers to transactions in…
For years, the Spanish tax authorities have imposed on companies established outside the EU that plan operating in Spain the obligation to appoint a tax representative with residence in Spain to represent them in their relations with the Tax Administration. This obligation implies, among others, an important extra cost for these companies compared…
Finally, and after several years, the United States has ratified the Protocol amending the Treaty for the avoidance of double taxation signed with Spain. In general terms, the new Protocol considerably reduces taxation in the source country, incorporates measures to prevent tax evasion and expands coordination between the authorities of both States. Some of…
Commission calls on Spain to abolish the obligation imposed on non-resident taxpayers to appoint a tax representative The Europrean Commission decided on 25th July 2019 to send a reasoned opinion to Spain for obliging non-resident taxpayers to appoint, in certain cases, a tax representative domiciled in Spain. This can result in extra costs and obstacles…
We have recently become aware about the Opinion given by the European Commission to Spain in February 2017, in relation to the obligation of declaring assets and rights abroad (“Form 720”). This urges the Spanish Tax Authorities to abide by a two month fixed period, to take the necessary measures of adapting these internal regulations, which…
