Tax Newsletter - May 2020
Spain -
Supreme Court: Use of the principle of dynamic interpretation for tax treaties has limits
The Spanish Supreme Court has concluded that tax treaties cannot be interpreted on the basis of later model conventions or of the commentaries on those models.
Judgments
- Corporate Income Tax.- EU law precludes a national law that does not allow the compatibility of horizontal and vertical consolidation
- State aid.- EU law precludes applying a national limitation period to the recovery of state aid where the expiry of that limitation period is mainly due to delayed enforcement of the recovery obligation
- Interpretation of EU law.- A national court does not have to adopt the most favorable interpretation of a provision of national law after that interpretation has been held incompatible with EU law
- Tax on increase in urban land value.- Restriction on applying for a refund of final assessments of the tax on increase in urban land value in a proceeding to set aside a decision that is null and void by operation of the law
- Tax on financial transactions.- The free movement of capital does not preclude the legislation of a member state which taxes financial transactions involving derivative financial instruments that have as their underlying asset an instrument issued by a company from that state
- Inheritance and gift tax.- Personal items cannot include income generating assets, assets used in activities, cash, or marketable securities
- Form 720.- Imposing a penalty for every account not reported on Form 720 falls outside the proportionality principle
- Collection procedure.- The principles of effectiveness and tax neutrality require the calculation of interest on excess amounts of deductible VAT retained by a state in infringement of EU law to ensure that adequate compensation is received
- Management procedure.- VAT recapitulative statements and annual summaries of personal income tax withholdings do not interrupt the statute of limitations for the right to assess
- Management procedure.- Rectification of a self-assessment return cannot be refused for procedural reasons only
- Tax options.- High courts issue contradictory decisions over whether tax loss carryforwards are a tax option
DGT resolutions and TEAC decisions
- Corporate Income Tax.- New resolutions on valid economic reasons in restructuring transactions have been published
- Personal income tax.- If, after a pay-out of additional paid-in capital generating income from movable capital, income is distributed, the acquisition value will be reduced to the extent of that income
- VAT - COVID-19.- Zero rate applies to supplies of medical equipment to all institutions, agencies and entities in the public sector
- Wealth tax.- The shares of private equity firms acquired within three years after their registration with the CNMV are not held to comply with statutory or regulatory obligations
- Collection procedure.- The persons liable for tax may apply for deferred or split payment of debts in respect of withholdings with shifted liability
Legislation
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