Transfer Pricing Insider
Volume: 3 Number: 2
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SPAIN TAX UPDATE
Source: Jose Palacios, Pedro Saavedra, Mario Ortega, and Antonio Pereira Jose Palacios, Pedro Saavedra, Mario Ortega, and Antonio Pereira are with Garrigues Abogados y Asesores Tributarios. Members of the firm regularly cover developments in Spain for the Journal.
2008 saw the entry into force of the new National Chart of Accounts (“PGC”) and the advent of regulations implementing the new transfer pricing regime. The tax impact of this legislation will undoubtedly be very telling (as in the past) due to the connection between accounting and transfer pricing on one hand and tax on the other.
These legislative developments, as well as the ongoing adaptation of Spanish tax law to EU legislation and the impact of the economic crisis, have served as catalysts for most of the changes in taxation in 2008. Most notable in this respect are the recently approved Royal Decree 1793/2008 (November 3, 2008), amending the Corporate Income Tax Regulations regarding related-party transactions (“Regulations”), and Law 4/2008 (December 23, 2008), abolishing taxation under the wealth tax, generalizing the monthly VAT refund system, and introducing other modifications into tax legislation (“Law”). As mentioned, the Regulations implement the new rules on transactions between related parties (i.e., controlled transactions), which had been awaiting implementation since late 2006, while the Law introduces a raft of legislative modifications of varying magnitude, covering practically all taxes in the Spanish tax system.
This article summarizes the main new features introduced by the Regulations and the Law but it is not an exhaustive list of the changes. For example, it does not include certain amendments relating to special and excise taxes, the regimes applicable to certain entities (such as insurers), changes regarding reductions in the tax on economic activities, or the tax on insurance premiums for road transportation.
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