In today’s business environment marked by mounting tax pressure, companies are increasingly seeking strategies for optimising their tax burden without compromising their competitiveness. One of the options for optimisation is investing in research and development (R&D) which does not only boost innovation but also offers significant tax incentives.

The Canary Islands. A dream travel destination, famous for its great climate and stunning beaches. It is also one of the most attractive territories in Spain taxwise, thanks to its tax incentives. However, the recent debate over the 15% minimum rate for large companies has cast a spotlight on these benefits, raising questions about how this new framework will affect businesses operating in the archipelago.

The European Union has developed a proposal to simplify withholding tax procedures and promote cross-border investment. In today’s world, where foreign investment is crucial to a global economy, this proposal could revolutionise withholding tax procedures. The EU Commission has put forward a series of measures that not only seek to simplify procedures, but also to make them more efficient and secure – for all parties involved, i.e. investors, financial intermediaries and the tax authorities of the member states.

The treatment of real estate investments made through German investment funds under the Spanish Non-Resident Income Tax and the Value Added Tax has generated contradictory interpretations by the General Directorate of Taxes (Dirección General de Tributos, DGT) over the years.

Spain’s Central Economic-Administrative Court (Tribunal Económico-Administrativo Central, TEAC) has established new criteria for the consideration, i.e. deduction, of expenses incurred in connection with property leases (decision of 22 April 2024).

On 22 April 2024, the Spanish Central Tax Appeal Board (Tribunal Económico-Administrativo Central, TEAC) issued a key decision regarding evidentiary effects in the context of the non-resident income tax (impuesto sobre la renta de no residents, IRNR).

Spain takes the next step towards the implementation of the 15% global minimum corporate tax.

The tax deductibility of the remuneration of directors and executives has been questioned by the Spanish tax authorities in those case where such remuneration does not comply with the statutory requirements under applicable company law. In particular, when the remuneration is paid to senior executives who are also members of the company’s board of directors.

For about two decades, the Spanish Tax Administration (AEAT) has been cracking down on professionals who tried to illegally minimise their tax burden through the use of special purpose vehicles.

Unlike its European neighbours such as Italy and Portugal, Spain has extended the tax incentives for workers and entrepreneurs who move their tax domicile to Spain under the so-called Beckham Law.

In this short article, we will discuss the VAT effects of operating Blockchain networks in the strict sense, i.e. mining and payment of miners, both in the form of cryptocurrency assets and/or commissions.

In Spain, Law 18/2022, on the creation and growth of companies, established the obligation to issue electronic invoices in all business-to-business transactions. This obligation was implemented in more detail by the new invoicing regulation published on 6 December 2023 in the Spanish State Gazette (BOE), mainly aimed at modernising and digitalising accounting, invoicing and management processes for entrepreneurs, with a special focus on SMEs, microenterprises and freelancers.

Blockchain, cryptocurrencies, NFT (non-fungible token), IoT – these terms are associated with what is known as the digital revolution, which is likely to have an even greater impact than the industrial revolution at the end of the 19^th century.

The mixed use of company cars by employees, i.e. the use for both professional and private purposes, has been a constant source of conflict between companies and the Spanish Tax Authority (the “AEAT”).

On 1 January 2023, the Tax on Non-Reusable Plastic Packaging came into force in Spain. It applies to all packaging containing plastic and designed to contain, protect or present goods to customers. However, packaging that forms an integral part of the goods and is necessary to contain or preserve them is not considered to be packaging for the purposes of the new tax.

There is no doubt that the European Union has made an unparalleled contribution to trade between its Member States. It is equally true that the VAT rules for transactions within the EU are well known and their application – in general – does not lead to difficulties of interpretation.

The European Central Bank has been steadily raising interest rates to curb the galloping inflation we are suffering. Sooner rather than later this scenario will lead to a considerable shortage of liquidity and an increasing number of defaults on payment.

In recent weeks amendments have been made to the legislation affecting the rental market, aimed at providing some respite in relation to the continual increases in rent, when, in light of the considerable demand, the issue that requires urgent action is in fact the lack of new housing.

Recent global events (COVID pandemic, war in Ukraine, etc.) have led many governments to implement public aid and incentive packages, resulting in increased liquidity

It is well known that holding companies, i.e. entities whose activity is the maintenance and management of shares and stocks held in other entities, do not carry out an economic activity for VAT purposes.

Spain is known for its love for sport, both at the professional and amateur levels, leading to outstanding achievements in a wide variety of sports in the recent past. In this regard, we are pleased to report on new case law from the Madrid High Court of Justice (Tribunal Superior de Justicia de Madrid) which deals with the VAT levied on amateur sporting events. In fact, in this case I was fortunate enough to serve as the lawyer responsible for filing suit against the Spanish tax authorities.

One of the most popular payments in kind in the Spanish labour market, apart from the famous restaurant vouchers, is the assignment of company vehicles to employees, especially to those in management positions or working in sales.

With real estate activity in Spain resurging slowly but surely, and as we are starting to overcome the pandemic, it is becoming exceedingly popular to invest in buildings or “fincas” with an eye to restoring and/or renovating them for subsequent sale. This Spanish variant of “house flipping” is also increasingly in demand by foreign investors, especially in coastal areas.

Much has been said about taxation in Spain on trading and ownership of Bitcoin, especially in relation to personal income tax (IRPF), wealth tax and the declaration of assets abroad (Spanish tax form 720). This article, however, will briefly outline other issues regarding cryptocurrency-related services as regards Value Added Tax.

Following the news on VAT in relation to e-commerce, on 15 June the Spanish government modified the VAT regulations. As we mentioned in a previous article on the introduction of the single window environment with respect to distance sales, this is an attempt to facilitate and promote digital commerce by implementing measures reducing the administrative load associated therewith. Below is a brief summary of certain aspects of the VAT regulations.

For years now, e-commerce has not stopped growing. It is undoubtable, however, that due to the prevention measures against COVID-19, e-commerce has increased significantly. It is within this context that modifications have been made to the European Directive on VAT with respect to so-called distance sales. It must be noted that this modification is exclusively directed at sales made with final customers, not business owners, which are located in EU countries other than that of the vendor’s registered address.

In Spanish VAT, there are two main systems for refunds: one for business owners established in Spain and another for non-residents. The latter is drastically different from the refund method regulated for business owners with establishments in Spain; this article, however, will focus exclusively on the deadline for requesting said refund.

Following the ruling by the Court of Justice of the European Union (“CJEU” Case C-7/20), it is worth recalling several essential concepts applicable to VAT taxation on the importation of goods. In this case, the CJEU was determining whether the EU directive should be interpreted in the sense that VAT on importation “always” arises in the territory in which the goods enter or in that in which a failure to comply with the customs legislation is found, as in the case before the court.

The Spanish tax system is comprised of taxes on three levels: state, regional (Autonomous Community level) and local (city councils).

After several extensions, a difficult political negotiation and the end of the transitory period, the exit of the United Kingdom from the European Union is fully effective. This means that from 1 January it will receive the same treatment as any other country that does not belong to the EU. The economic and legal consequences of said exit are numerous and varied, but in this brief article we wish to emphasise the changes which will take place in terms of VAT and which companies will note immediately.

In the context of scarce liquidity, it is not surprising that companies do not have the necessary means to pay the debts due during the course of a tax inspection, or directly cease their activity. It is in these scenarios where the liability of the directors, or members of the board of an entity, could enter into play. Let us recall that this liability is usually subsidiary, that is, the company previously declares itself insolvent due to failure to pay outstanding tax debts or penalties.

Despite the fact that at the OECD level no agreement has been reached about how to approach the taxation of digital services, the Spanish government decided to approve the so-called “Google Tax,” which will enter into force definitively on 16 January 2021.

Within the “Restructuring Plan” proposed by the Spanish government, and as declared by various ministers, would be an “unavoidable” increase in the Corporate Income Tax (Impuesto sobre Sociedades or “IS”) in Spain.

The Spanish government, far from praiseworthy objectives to relaunch business activity such as the strengthening of liquidity and savings for companies and families, is planning an aggressive increase in taxes. Among them is the Wealth Tax (Impuesto del Patrimonio  or “IP”).

After the entry into force of the state of alarm, and until its end, the deadline to prepare the annual accounts is suspended. In addition, after the state of alarm is lifted (foreseen for the month of May), companies will have a “new term of three months” in which to prepare them. To this we must add that the shareholders generally have another, additional period of three months to approve the accounts.