On the 30th of December 2017, the Spanish Official Bulletin published a battery of Royal Decrees, with several modifications, on tax related legislation.
Have a quick look at the most notable changes, which should be of considerable interest at an international level.
Information Supply to the Administration and the use of the Electronic site:
- The taxable subjects are obliged to supply information for the VAT Monthly Refund Register (REDEME) and must keep the VAT register books through the Spanish Tax Administration electronic site.
Enquiries to the Tax Authorities in order to know what the literal interpretation of the law is:
- For all tax enquiries related to Permanent Establishment (PE), or cross-border transaction issues, the tax authorities must be consulted. Moreover, the consultant must identify the group companies where the PEs belong, the description of the business activity, or the type of transaction to be developed, and the various potentially affected member states, as well as the fiscal persons that might be affected, and any other relevant data.
- When the group has a non-resident in the Spanish territory parent company, and it has not informed the Spanish Tax Authorities as to which entity is the representative of the group, then the Tax Authorities will consider any of the entities as the representative of the group. Once a tax audit has started, despite there being a subsequent communication changing the representative, the tax authorities will continue referring to the first entity as the representative.
- Lack of presentation of reporting obligations: If it is not possible to electronically present the models of any reporting obligations (it is mandatory to present them through the electronic site) the new regulation allows the presentation by any other means. The presentation still must be done on time, and and must be done before the tax authorities might require it.
- Quantification of the penalties regarding the keeping of the VAT register books through the Spanish Tax Administration electronic site: The new system of presentation is mandatory for Large Companies (the ones invoicing more than 6,010,121.04 €), and companies registered at the Monthly Refund Register and the VAT Groups. Those companies are obliged to do so, and if they do not present the information on time, they will be assessed a penalty of the 0.5% of the invoice amount with a minimum of 300€ and a maximum of 6.000€ per trimester.
- The legislature wants to specify the precise circumstances regarding when an entity located in Spain may be obliged to declare the CbCR when the obliged entity is not in Spain:
- When there is no analogous obligation to declare the CbCR in the State of residence of the obliged entity.
- When there is no Information Exchange Agreement regarding the CbCR obligation within the state where the obliged entity resides.
- When there is a systematic non-compliance with the CbCR obligation by the obliged entity in its resident state.
Those obligations will not be imposed when the multi-national group designates another entity located in another member state.