Tax Newsletter - June 2020
Spain -
Not electing the special inbound expatriates regime within the time limit implies that the standard personal income tax regime has been chosen
A recent supreme court judgment held that if a taxpayer fails to notify on time the decision to elect the special inbound expatriates regime, it is considered that the standard regime has been chosen. This decision recalled the importance of acting with extreme caution when deciding over tax options on tax returns.
Judgments
- Personal income tax.- Employers have to evidence that the paid per diems relate to trips for work, even if the recipient is the company’s director
- Transfer and stamp tax.- The formation of a company by contributing mortgaged properties is subject to capital duty and transfer tax
- Real estate tax.- If an appraisal has been voided by a final decision, any real estate tax assessments that have used that appraisal must be rendered invalid
- Cadastral values.- The new cadastral value notified by the cadaster as a result of a correction procedure cannot take effect retroactively
- Verification of reported information procedure.- The verification of reported information procedure cannot be used to make complex legal interpretations
- Enforcement procedure.- Discrepancies over an enforcement decision must be resolved by the reviewing body that issued the decision
Decisions by economic and administrative tribunals
- Nonresident income tax.- If dividends are paid to a holding company resident in a member state, but the beneficial owner is not resident in the EU, they are subject to withholding tax
- Collection procedure.- New wording of article 150.7 of General Taxation Law (LGT) on calculation of late-payment interest on assessments issued for enforcement is applicable where receipt of the enforcement case file occurs on or after October 12, 2015
- Collection procedure.- Late filing surcharges are not applicable to adjustments made in one period as a result of an earlier administrative review
DGT resolutions
- Corporate income tax.- The DGT reiterates acceptability of non-monetary contributions of shares that allow the “tax fee” on the distribution of dividends to be eliminated
- Corporate income tax.– Tax losses are not reduced by impairment losses on the investment, if the impairment losses are reverted before the merger
- Corporate income tax.– If the merger reserve relates to the capital and additional paid-in capital contributed by the shareholder to the absorbed company, their distribution does not have to be included in the recipient’s tax base
- Corporate income tax.- The finance cost for distributing additional paid-in capital is deductible within the general limits for finance costs
- Personal income tax.- Inbound expatriates can benefit from the rules allowing exempt or non-taxable salary income (flexible compensation)
- Personal income tax.- The indemnity received by a false self-employed worker, as agreed in a judicial conciliation hearing, is not tax-exempt if unjustified dismissal is not suitably acknowledged
- Personal income tax.- Fees in respect of proceedings that took several years are multi-year income
- Nonresident income tax.- An activity lasting under six months, which has recurred over several years, may give rise to the existence of a permanent establishment in Spain
- Nonresident income tax.– Legal costs received by a UK resident are characterized as a capital gain which, under the tax treaty, is only taxable in the state of residence
- VAT.- Output VAT on advance payments for hotel bookings must be corrected if the customer fails to show
Legislation
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