Tax Reform: Preliminary bills to overhaul a range of tax concepts

Specifically, (i) the Preliminary Bill amending Personal Income Tax Law 35/2006, of November 28, 2006, the revised Nonresident Income Tax Law, approved by Legislative Royal Decree 5/2004, of March 5, 2004, and other tax provisions (preliminary bill amending personal income tax and nonresident income tax); (ii) the Preliminary Bill for the Corporate Income Tax Law; (iii) the Preliminary Bill amending Value Added Tax Law 37/1992, of December 28, 1992; Law 20/1991, of June 7, 1991, amending the tax aspects of the Canary Islands Economic and Tax Regime; Excise and Special Taxes Law 38/1992, of December 28, 1992; and Law 16/2013, of October 29, 2013, establishing certain measures concerning environmental taxation and adopting other tax and financial measures (preliminary bill amending VAT, the Canary Islands general indirect tax, and excise and special taxes); and, lastly, (iv) the Preliminary Bill partially amending General Taxation Law 58/2003 (preliminary bill amending the General Taxation Law).

The Preliminary Bill for the Corporate Income Tax Law regulates a new law that would repeal the currently in force Legislative Royal Decree 4/2004 which approved the revised Corporate Income Tax Law; whereas for the other taxes affected by the reform and to which the other three preliminary bills refer, the reform simply incorporates the amendments into the current legal texts that apply in each case.

As noted, these are preliminary bills, so they are subject to public consultation periods and, subsequently, to the relevant passage through parliament, where it is foreseeable that changes will be introduced into the current texts, which will have to be taken with the necessary caveats. However, there are already several proposed amendments that are affected by what is known as the “announcement effect”, meaning that, if the reforms in question are finally approved, they will take effect in relation to taxable events that predate their entry into force. In addition, with respect to corporate income tax, although the preliminary bill indicates January 1, 2016 as the date of entry into force of the new law, it also provides for certain measures that are set to already take effect for years commencing on or after January 1, 2014 and 2015.

 

Index

1. Personal Income Tax

1.1 Severance pay

1.2 Tax residence

1.3 Itemization of income

1.4 Timing of recognition

1.5 Salary income

1.6 Income from immovable capital

1.7 Income from movable capital

1.8 Income from economic activities

1.9 Capital gains and losses

1.10 Inclusion and offset of income

1.11 Contributions to pension plans and similar systems

1.12 Personal and family allowances

1.13 Rates of the tax

1.14 Tax credits

1.15 International fiscal transparency

1.16 Special inbound expatriates regime

1.17 Capital gains due to change of residence

1.18 Tax return threshold

1.19 Withholding taxes

1.20 Reporting requirements

 

2. Corporate Income Tax

2.1 The new Corporate Income Tax Law

2.2 Measures introduced for the 2014 and 2015 tax periods

 

3. Nonresident Income Tax

3.1 Exemptions

3.2 Tax base

3.3 Tax rates

3.4 Other proposed amendments

 

4. Value Added Tax and Canary Islands General Indirect Tax

4.1 Territoriality (VAT)

4.2 Cases of non-taxability (VAT and Canary Islands general indirect tax)

4.3 Definition of supply of goods (VAT and Canary Islands general indirect tax)

4.4 Exit from suspensive areas or arrangements (VAT)

4.5 Exemptions in internal transactions (VAT)

4.6 Waiver of exemptions in real estate transactions (VAT)

4.7 Exemptions in foreign commerce transactions (VAT)

4.8 Place of supply of transactions (VAT and Canary Islands general indirect tax)

4.9 Chargeability (VAT)

4.10 Taxable amount (VAT and Canary Islands general indirect tax)

4.11 Modification of the taxable amount (VAT and Canary Islands general indirect tax)

4.12 New cases of reversal of the liability (VAT)

4.13 Tax rate applicable to medical equipment and medicinal substances (VAT)

4.14 Deductions (VAT and Canary Islands general indirect tax)

4.15 Refunds to traders not established in the EU (VAT)

4.16 Assessment of tax on imports (VAT)

4.17 Assessment of Canary Islands general indirect tax

4.18 Special simplified schemes and schemes for agriculture, livestock and fisheries (VAT and Canary Islands general indirect tax)

4.19 Special scheme for travel agencies (VAT and Canary Islands general indirect tax)

4.20 Special VAT grouping scheme (perimeter) (VAT and Canary Islands general indirect tax)

4.21 New types of infringements (VAT and Canary Islands general indirect tax)

4.22 Liability of the titleholder of a tax warehouse other than a customs warehouse (VAT)

 

5. Excise and special taxes

5.1 Electricity tax

5.2 Tax on fluorinated greenhouse gases

5.3 Other issues

 

6. General Taxation Law and other procedural provisions

6.1 General tax legislation

6.2 New provisions on the procedures for economic-administrative claims

6.3 Amendments resulting from the new provisions on the criminal offense against the public treasury

6.4 Other amendments