Tax Newsletter - July 2016

• 1.1 Corporate income tax.- There is a sham element in a contribution of inventories followed by a subsequent transfer of the ownership interest and the claiming of deferred taxation for reinvestment (Supreme Court. Judgment of June 22, 2016)
• 1.2 Nonresident income tax.- A distributor subsidiary which is a commission agent acting for itself and on behalf of another may be a permanent establishment (Supreme Court. Judgment of June 20, 2016)
• 1.3 VAT.- Sending the amended invoice to the insolvent debtor is not an essential requirement if the amendment was notified to the authorities within the time limit (National Appellate Court. Judgment of May 25, 2016)
• 1.4 Transfer and stamp tax.- Conditions subsequent do not prevent stamp tax becoming chargeable (Supreme Court. Judgment of June 20, 2016)
• 1.5 Transfer and stamp tax.- The acquisition of ownership of an asset by prescription is not subject to transfer and stamp tax (Andalucía High Court. Judgment of July 10, 2015)
• 1.6 Inheritance and gift tax.- It is contrary to the free movement of capital for a higher reduction to be applied for residents in gifts of real estate (Court of Justice of the European Union. Judgment of June 8, 2016 in case C-479/14)
• 1.7 Tax on the increase in urban land value.- Analysis of unconstitutionality in sales with losses or where the gain is lower than the tax (Valencia High Court. Judgment of July 20, 2015)
• 1.8 Real estate tax.- The proportional amount of real estate tax can be charged to the buyer (Supreme Court. Judgment of June 15, 2016)
• 1.9 Environmental taxes.- The tax on environmental damage caused by the installation of cable transport (ITC) in the autonomous community of Aragon is valid (Supreme Court. Judgment of June 8, 2016)
• 1.10 Tax procedure.- A provincial government cannot make a request for information to an enterprise domiciled in another area (Supreme Court. Judgment of June 29, 2016)
• 1.11 Tax procedure.- The right to a refund resulting from the enforcement of a decision cannot be held to have expired (Supreme Court. Judgment of June 7, 2016)
• 1.12 Tax procedure.- Inspection work must start when the Inspection Plan is in force (National Appellate Court. Judgment of May 5, 2016)
• 1.13 Tax procedure.- The notification date and signature of the public official must appear on the acknowledgement of receipt (National Appellate Court. Judgment of May 5, 2016)
• 1.14 Review procedure.- New documents may be produced in an appeal for consideration (Madrid High Court. Judgment of September 21, 2015)

• 2.1 Corporate income tax.- On directors’ compensation (Central Economic-Administrative Tribunal. Decision of July 5, 2016; and Directorate-General for Taxes. Ruling V1965-16, of May 9, 2016)
• 2.2 Corporate income tax.- Reciprocal revenues and expenses cannot be eliminated until a gain occurs on a consolidated basis (Directorate-General for Taxes. Ruling V2751-16, of June 17, de 2016)
• 2.3 Corporate income tax.- The definition of “economic activity” for the purposes of the special regime for enterprises engaged in property leasing must be interpreted in accordance with the Personal Income Tax Law (Central Economic-Administrative Court. Decision of July 5, 2016)
• 2.4 Corporate income tax.- Eligibility for the exemption under article 21 for the holder of a usufruct in respect of the shares (Directorate-General for Taxes. Ruling V2043-16, of May 12, 2016)
• 2.5 Corporate income tax.- The limit on the deduction of finance costs will not apply in the year in which the enterprise is terminated or in the liquidation period (Directorate-General for Taxes. Ruling V1989-16, of May 9, 2016)
• 2.6 Miscellaneous taxes.- Treatment of shareholders’ contributions to account 118 in the National Chart of Accounts (Directorate-General for Taxes. Ruling V1978-16, of May 9, 2016)
• 2.7 Miscellaneous taxes.- Treatment of voluntary contributions to the Chambers of Commerce (Directorate-General for Taxes. Ruling V1963-16, of May 9, 2016)
• 2.8 Wealth tax.- The requirement for a person cannot be covered by a management and administrative services company (Directorate-General for Taxes. Ruling V1999-16, of May 9, 2016)
• 2.9 Inspection procedure.- Notification attempts interrupt the six month period of inactivity by the inspectors (Central Economic-Administrative Court. Decision of July 7, 2016)

• 3.1 Directive against the tax avoidance practices commonly employed by large enterprises
• 3.2 Effective annual interest rate for the second calendar quarter of 2016, for the purpose of characterizing certain financial assets for tax purposes
• 3.3 Amendment of the VAT rules applicable to vouchers

• 4.1 Exchange of Letters interpreting the Spain-Morocco tax treaty

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