Tax Newsletter - November 2018 | Legislation of interest

Latest amendments to the VAT Directive regarding the reverse charge mechanism and the applicable VAT rates on electronic books

Directive 2018/1695 and Directive 2018/1713, both dated November 6, 2018, were published in the Official Journal on November 12 and November 14.

The first directive amends Directive 2006/112/EC concerning the period of application of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the quick reaction mechanism against VAT fraud.

The second amends Directive 2006/112/EC concerning the rates of value added tax applied to books, newspapers and periodicals, and allows member states to apply reduced rates of value added tax to certain electronic books.

Our VAT Alert 3-2018 takes a look at the new legislation in this Directive.

Lenders will pay stamp tax on mortgages and will not be able to deduct it for corporate income tax purposes

As we reported in our Tax Alert 16-2018, Royal Decree Law 17/2018, of November 8,  2018, amending the Revised Transfer and Stamp Tax Law, was published in the Official State Gazette on November 9, 2018

This royal decree-law has introduced the following measures:

1. In mortgage loan deeds executed on or after November the party liable for stamp tax will be the lender. The related tax debt will not be deductible for corporate income tax purposes by the lender for fiscal years beginning on or after November 10, 2018.
2. Mortgage collateral loans will be exempt, however, if the borrower is any of the organizations eligible for stamp tax exemptions listed in article 45.I.A) of the Revised Transfer and Stamp Tax Law (central government and regional authorities, not-for-profit organizations, savings banks and banking foundations, the Catholic church and other religious communities with arrangements with the Spanish state, political parties, etc.).

Approval of the reform of the economic and tax regime of the Canary Islands

Law 8/2018, amending Law 19/1994 which amends the economic and tax regime of the Canary Islands, was published in the Official State Gazette on November 6, 2018 and came into force the day after. This Law was discussed in our Tax Commentary 8-2018.

Amendments to forms 303, 322, 390 and 347

Order HAC/1148/2018, of October 18, 2018, was published in the Official State Gazette on October 31, 2018 and amends the orders approving the following forms:

1. Form 322 (monthly self-assessment, individual form), form 353 (monthly self-assessment, aggregate form), form 039 (notification of information) relating to the special VAT regime for groups of entities.
2. Form 347 (annual return for transactions with third parties).
3. Form 303 (VAT, self-assessment) and form 390 (annual value added tax recapitulative statement).
4. Form 036 (census notification for registration, amendment, and deregistration relating to the register of traders, professionals and withholding agents) and form 037 (simplified register notification for registration, amendment, and deregistration relating to the register of traders, professionals and withholding agents).

In addition to making various technical amendments to some of these forms, it has notably changed the filing period for form 347 to February each year in relation to transactions performed in the previous calendar year.

Lastly, it establishes that the new management system for information returns envisaged for 2018 (Transmission of Large Information Volumes with on line validation) will be applicable:

1. For forms 156, 181, 182, 187, 188, 190, 192, 193, 194, 196, 198, 291, 345, 346 and 347 relating to 2018 that are filed from 2019 onwards.
2. For all other information returns relating to 2019 that are filed from 2020 onwards.

The Order entered into force on November 1, 2018 and will be applicable, for the first time, to the filing of VAT self-assessments (forms 303 and 322) relating to the last assessment period of 2018 and information returns (forms 390 and 347) relating to 2018.

Approval of implementing regulations for various articles of the Regulations on Excise and Other Special Taxes

Order HAC/1147/2018, of October 9, 2018, approving the implementing rules for articles 27, 101, 102 and 110 of the Regulations on Excise and Other Special Taxes was published in the Official State Gazette on October 31, 2018. Specifically:

1. In relation to the sales en route procedure, the necessary instructions have been approved for completing and sending the accompanying document to AEAT, the delivery note forms to be issued for each supply associated with the accompanying document, and the instructions for completing the delivery notes and the disclosing electronically to AEAT the information contained in them.
2. In relation to the exemption envisaged for aircraft fueling operations, the delivery receipt form has been approved along with the implementation of the procedure for reporting to AEAT the information contained in the delivery receipts.
3. As regards the refund application procedure for excise tax on hydrocarbons in gasoil refueling operations, the applicable media and procedure for the application have been established and the delivery receipt form applicable to these supplies has been approved.

The Order entered into force on November 1, 2018 and will be applicable to deliveries and refueling operations made on or after July 1, 2019.