Tax Newsletter - September 2020 | Legislation

Spain - 09 / 29 / 2020

Zero rated VAT and IGIC has been extended until October 31, 2020 for domestic supplies, imports and intra-Community acquisitions of certain healthcare materials, other tax measures were adopted and these measures were later repealed

Royal Decree-Law 27/2020, of August 4, 2020, and Decree Law 13/2020, of July 30, 2020, extended until October 31, 2020 zero rated VAT and IGIC on supplies, imports and intra-Community acquisitions (as applicable) of certain healthcare materials (see our alerts dated August 5, 2020 and July 31, 2020).

Moreover, Royal Decree-Law 27/2020 allowed a specific tax regime for the final of the UEFA Women's Champions League 2020 and stamp tax relief for deeds formalizing moratoriums for loan and mortgage payments and for leases, loans, finance leases and operating leases not secured by a mortgage that occur under the provisions on mortgage moratoriums for the tourism industry (Royal Decree-Law 25/2020, of July 3, 2020) and for the industry for public transport of goods and discretionary transport of passengers by bus (Royal Decree-Law 26/2020, of July 7, 2020).

This Royal Decree-Law was repealed by a repeal decision published on September 11, 2020, so for the time being those tax measures must be considered to be repealed.

However, the measures relating to VAT and to the final of the UEFA Women's Champions League 2020 were reintroduced by Royal Decree-Law 28/2020, of September 22, 2020 (alert).

Lastly, the stamp tax relief mentioned above was reintroduced by Royal Decree-Law 30/2020, of September 29, 2020 (alert).

Amendments introduced to the collection management cooperation service provided by credit institutions

The August 12, 2020 edition of the Official State Gazette published Order HAC/785/2020, of July 21, 2020 introducing various amendments in relation to collection management.

These include certain cases in which cooperating institutions will not be able to reverse or correct revenues collected earlier through them. This measure is designed to avoid cases where taxpayers (by simply showing a receipt for payment supplied by a cooperating institution and before the payment has been recognized on the tax databases) request certain types of actions by the central government tax authorities (return of guarantees, lifting of attachments, issuance of certificates of payment or of being up to date with tax obligations, etc.) that require the prior payment of tax.

Moreover, so that within the scope of AEAT (Spanish tax agency) debts may be paid by transfer, the essential conditions for this have been specified.

Economic reactivation measures are approved in the fields of transport and housing to confront the impact of COVID-19

The July 8, 2020 edition of the Official State Gazette published Royal Decree-Law 26/2020, of July 7, 2020 on economic reactivation measures to confront the impact of COVID-19 in the fields of transport and housing.

Tax measures:

The Corporate Income Tax Law has been amended in relation to the tax regime allowed for port authorities, which cease to be partially exempt from the tax, to comply with Commission Decision of January 8, 2019 (C (2018) 8676 final). Additionally a new tax credit has been created for investments made by port authorities (article 38 bis) and it has been stipulated that the depreciation expense for assets eligible for this credit is not deductible.
Moreover, in relation to the shipping industry, the measures originally set out in article 16 to article 20 of Royal Decree-Law 15/2020, of April 21, 2020, on additional urgent measures to support the economy and employment (see our alert) have been amended to give organizations managing ports or the competent authorities flexibility for the collection of infrastructure fees in the context of the COVID-19 outbreak.

Specifically, exceptional measures have been adopted in relation to the occupancy fee, the activity fee and the ship fee, together with the deferral of tax debts in port contexts.
The Formula 1 Spanish Gran Prix has been declared an event of exceptional public interest for the purpose of article 27 of Law 49/2002, of December 23, 2002, on the tax regime of non-profit entities and on tax incentives for patronage. The program starts on January 1, 2020 and ends on December 31, 2023.

Stamp tax relief introduced for moratoriums on mortgage payments for buildings used for tourism activities

The July 6, 2020 edition of the Official State Gazette published Royal Decree-Law 25/2020, of July 3, 2020 on urgent measures to support economic reactivation and employment which includes the introduction of a moratorium on mortgage payments for buildings used for tourism activities.

This measure was accompanied by stamp tax relief for the deeds formalizing those moratoriums.

For further information see our alert dated July 6, 2020 providing a summary of this legislation.

The Protocol amending the tax treaty signed by Spain and India has been approved

The July 9, 2020 edition of the Official State Gazette published the Protocol between the Kingdom of Spain and the Republic of India, signed at New Delhi on October 26, 2012, to amend the Convention and Protocol between the Republic of lndia and the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on lncome and on Capital, signed at New Delhi on February 8, 1993; which entered into force with effect from December 29 2014.

Among other amendments nonresident income tax is included in Spain for the purposes of applying the treaty, the exchange of information regime is amended in line with the OECD Model Convention; and an article 28.A is introduced on “assistance in the collection of taxes” and an article 28.B on “Limitation of benefit”.

Phone helpline launched using the cl@ve PIN system for carrying out certain formalities and steps with AEAT

The July 7, 2020 edition of the Official State Gazette published the Decision of July 1, 2020, by AEAT’s Collection Department, bringing into operation the phone helpline, on the nonadvanced signature channel with a PIN number in an earlier registration (cl@ve PIN), for the formalities and steps included in the annex to the decision, which has been given the name REC@T (after the Spanish acronym).

The formalities able to be carried out using this system relate basically to attachments of assets and income, to deferred and split payments of debts, to offsets of debts by decision of the authorities or at the taxpayer’s request, and to tax payments out of bank accounts.

This decree is applicable to formalities carried out on or after July 8, 2020.

Publication of the annual equivalent rate for third calendar quarter of 2020, for the purpose of characterizing certain financial assets for tax purposes

The June 29, 2020 edition of the Official State Gazette (BOE) published the decision of June 25, 2020, by the Office of the General Secretary for the Treasury and International Finance, which, as is now the custom, sets out the reference rates that will apply for the calculation of the annual effective interest rate for the purposes of characterizing certain financial assets for tax purposes, this time for the third calendar quarter of 2020. The rates are as follows:

Financial assets with terms of four years or less: -0.194 percent.
Assets with terms between four and seven years: -0.060 percent.
Assets with ten-year terms: 0.422 percent.
Assets with fifteen-year terms: 0.756 percent.
Assets with thirty-year terms: 1.338 percent.

In all other cases, the reference rate for the period closest to the period when the issuance is made will be applicable.