Spain - Tax Newsletter - November 2017

1. Judgments

• 1 Anti-abuse clauses.- A general presumption of fraud cannot justify a measure that adversely affects the exercise of a fundamental freedom guaranteed by the Treaty (Court of Justice of the European Union. Judgment of October 25, 2017, case C-106/16)
• 2 Corporate income tax.- A law that limits the deduction of interest on loans that does not relate to the financing of holdings up to an amount equal to that of the dividends received from subsidiaries is contrary to the Parent-Subsidiary Directive (Court of Justice of the European Union. Judgment of October 26, 2017, case C-39/16)
• 3 Corporate income tax.- The cost of containers and packaging is not included in the base for calculating the tax credit for publicity and advertising expenses related to support programs for events of exceptional public interest (National Appellate Court. Judgment of October 18, 2017)
• 4 Inheritance and gift tax.- The State must reimburse taxes that are statute-barred if its procedures have infringed Community case law. (Supreme Court. Judgments of October 17, October 23 and October 24 2017)
• 5 Inheritance and gift tax.- Relationship by affinity is not extinguished when relationship by consanguinity disappears following a death (Supreme Court. Judgment of September 25, 2017)
• 6 Inheritance and gift tax.- A report by an economist and auditor is valid to refute the legal presumption as to how to value personal items (Valencia High Court. Judgment of May 31, 2017)
• 7 Tax procedure.- On the limits to the authorities finding expiration of the statute of limitations (Supreme Court. Judgment of October 18, 2017)
• 8 Tax procedure.- On formal resumption of procedure after the maximum length for proceedings has been exceeded (Supreme Court. Judgment of September 1, 2017)
• 9 Tax procedure.- If documents are not filed due to defective notification by the tax authorities they may be filed later in an appeal (National Appellate Court. Judgment of July 18, 2017)

• 1 Corporate income tax.- Although auditing the pricing of controlled transactions must be handled separately, an assessment failing to satisfy this requirement may not be rendered null and void (Central Economic-Administrative Tribunal. Decision of October 5, 2017)
• 2 Corporate income tax.- The tax benefit in respect of the Reserve for Investments in the Canary Islands is maintained after merger and split-up transactions (General Directorate for Taxes. Ruling V1836-17, of July 12, 2017)
• 3 Personal income tax.- Taxation of a lease agreement with a call option on a dwelling (Directorate General for Taxes. Ruling V2079-17, of August 3, 2017)
• 4 Personal income tax.- The taxpayer is allowed to elect the multi-year income from which the 30% reduction will be made (Directorate General for Taxes. Ruling V2070-17, of August 2, 2017, and Ruling V2081-17, of August 3, 2017)
• 5 Transfer and stamp tax.- The appraisal deed for auction purposes is not assessable for stamp tax purposes (Central Economic-Administrative Tribunal. Decision of October 10, 2017)
• 6 Transfer and stamp tax.- To calculate the proportion land and buildings bear to total assets for the purposes of article 108 of the Securities Market Law, AEAT does not need to value all asset elements (Central Economic-Administrative Tribunal. Decision of October 10, 2017)
• 7 Tax procedures.- The enforcement of a decision partially upholding a claim with reversion of procedure to allow the person responsible to elect the reduction does not reopen the declaration of liability proceeding (Central Economic-Administrative Tribunal. Decision of October 26, 2017)
• 8 Tax procedures.- A provisional assessment rendered as a result of a request for a refund of incorrect payments may have precluding effects (Central Economic-Administrative Tribunal. Decision of October 23, 2017)
• 9 Tax procedures.- If the assessment is rendered void on procedural grounds, a second penalty proceeding may be conducted (Central Economic-Administrative Tribunal. Decision of October 5, 2017)
• 10 Nonresident income tax.- The income received by a branch will receive the tax treatment under the treaty between the source state and residence state of the head office (Directorate General for Taxes. Ruling V2137-17, of August 18, 2017)