Fiscal year 2018 is beginning, and although the bulk of taxation regulations from the previous period essentially remains, there are new elements that we will analyse below. Many of them are the result of last 29 December’s approval of Spanish Royal Decree 1074/2017, amending the Regulation on Personal Income Tax (IRPF), the Corporate Tax Regulation and the Inheritance and Donation Tax Regulation.
The purpose of this Spanish Royal Decree is to adapt the aforementioned regulatory texts to current legal regulations, to clarify the content of different precepts in the aforementioned regulations, and to add certain modifications oriented toward simplifying management, and therefore reducing administrative burdens.
Moreover, Spanish Royal Decree 1075/2017 was also approved, which amends the regulations on different indirect taxes, fundamentally VAT, the Tax on Property Transfers and Document Duties, and Special Taxes.
On the other hand, the Cabinet of Ministers approved another four Spanish Royal Decrees that amend the Regulations to implement the General Taxation Law: the Tax Application Regulation, the General Tax Collection Regulation, the General Taxation Penalty System Regulation, and the General Bankruptcy Proceeding Review Regulation.
NEW CHANGES IN PERSONAL INCOME TAX.
- Public grants. The limit amount for public grants and those granted by entities that are beneficiaries of patronage for studies is increased from 3,000€ to 6,000€ per year.
This shall be increased to 18,000€ per year if the grant’s purpose is to offset expenses for transport and lodging to conduct studies regulated by the educational system, up to a master’s degree, including or equivalent, or up to 21,000€ per year when, additionally, these studies are being carried out abroad.
The exempt provision of grants to carry out doctorate studies is raised to 21,000€ if studied in Spain, or to 24,600€ if carried out abroad.
- Training expenses. It is clarified that, included within training or further staff training expenses that are not payment in kind, expenses financed by companies or entities other than the employer are also included, as long as said companies or entities sell products that are necessary to provide for suitable worker training.
- Meal Tickets. The daily amount exempt for meal vouchers or similar documents is raised from 9€ to 11€ per day.
- Guardianship and custody over a minor. The minimum for descendants shall also be applicable to the third party granted guardianship and custody over a minor by court decision.
- Correction of errors in self-statements. It shall be permitted to correct errors in a reverse-charge that are to the detriment of the taxpayer by means of the statement form itself, with no need to file an application to rectify the reverse-charge.
- New withholding obligation or deposit on account in the event of capital gains stemming from transfer of preferential subscription rights. The depositing entity, or in its absence, the financial intermediary or the notary public must withhold 19% of the amount obtained from the transaction.
- Requirements to be in modules in 2018. In 2018, the limit of 250,000€ remains for income volume, and 125,000€ for invoicing companies and professionals. Also for self-employed persons in modules, the Tax Agency maintains the 5% net yield discount in 2018.
- Self-employed persons deductions. Employees shall be given the right of self-employed persons who, for professional reasons, must eat outside the home or spend the night outside the home, to deduct expenses in personal income tax subject to conditions: expense outside the municipality housing the business address; digital payment, and the receipt must be safekept. The daily amount for eating outside the place of business shall be 26.67€, or 48.08€ if in foreign territory. For spending the night outside the place of business, the amounts are 53.34€ and 91.35€, respectively.
For those working inside their regular home, they may deduct supplies bearing on the activity, at 30% of the part proportionate to the square metres of the dwelling used for the activity, unless a greater or lower percentage can be proven.
NEW CHANGES IN CORPORATE TAX.
- Information country by country. Regulation of the informative statement called “information country by country” is amended to adapt it to the Community Directive 2016/881, particularly regarding entities that must file the statement:
Thus, multinational groups whose net Business Figure amount is over 750 million euros must file it. Once the group has met this requirement, the following entities must pay special heed:
- Entities residing in Spanish territory whose status is dominant within a group and who are not dependent upon another entity at the same time.
- Entities that reside in Spanish territory that directly or indirectly depend upon an entity that is not a resident in Spanish territory that is not dependent upon another at the same time.
- The permanent establishments located in Spanish territory of non-resident entities.
- Converting deferred-tax assets (DTA) into a receivable for the Tax Administration. Regulatory implementation of the compensation and payment procedure is adapted to the amendments made to the Corporate Tax Law beginning in 2016.
- Withholdings. A new case of exemption from the obligation to withhold is established, related to the amounts paid to pension funds by open pension funds, whose purpose is to channel investments from other pension funds and pension plans to other pension funds.
NEW CHANGES IN THE TAX ON INHERITANCES AND DONATIONS
- Cadastral Reference. In the purchase of real estate assets, the tax statement must include the cadastral reference of the transferred real estate, which shall contribute to proper identification, and therefore improve tax management and facilitate the supply and exchange of information between the administration managing the tax and the land registry.
- Proof of compliance with obligations. To facilitate management of the Inheritance and Donations tax, particularly for non-residents who must file a statement with the National Public Treasury, it is established that compliance with obligations bearing on the tax may be proven by means of a certification issued by the National Tax Administration Agency.
NEW CHANGES IN VAT
Measures to facilitate adoption of ICS (SII). The AEAT may authorise, in certain justified cases, that the information sent does not include all mentions or all information referenced in the tax register books, or that invoice summary entries be made under conditions other than those generally stipulated. Taxable persons who decide to apply the ICS shall also be permitted to maintain their quarterly liquidation period.
NEW CHANGES IN TAX ON PROPERTY TRANSFERS AND DOCUMENT DUTIES
A new monthly reverse-charge procedure is included for all transfers for an entire month for cases when a large number of personal assets are purchased from private individuals by business owners or professionals in a continuous fashion over time.
SPECIAL TAXES
Certain measures are added, such as the obligation to register required accounting books through the AEAT (Tax Agency) webpage.
SPECIFIC MEASURES TO FIGHT TAX FRAUD.
Lastly, regulations implementing the General Taxation Law to fight and prevent tax fraud have been amended. Some of the noteworthy measures are:
- Regarding “collaborative platforms” that act as intermediary to lease or grant use of dwellings for tourist purposes, the obligation to identify the transferor and the transferee of the transferred dwelling and the amount paid for said transfer is established. The system for this new obligation shall be implemented by Ministerial order.
- Regarding the SII (ICS), the penalty system for omission, for delay in registering the Accounting Books on issued and received invoices, and for delay in registering the Accounting Books on investment assets and certain intra-community transactions has been determined.
Arrabe Integra
Tax Department
