Tax Newsletter - December 2014


Law 31/2014, of December 3, 2014, amending the Corporate Enterprises Law to enhance corporate governance, has brought about a significant overhaul of Spanish corporate/commercial legislation, but also has important tax implications.

First of all, the Law places the control of tax risks within the responsibilities of the boards of directors of listed companies. The board of directors of a listed company may not delegate the determination of the company’s policy on tax risk control and management and the supervision of internal information and control systems. The law also tasks the audit committee with supervising the effectiveness of internal control of the company, its internal audit and its risk (including tax) management systems. The audit committee must also give prior notice to the board of the creation or acquisition of investments in special purpose vehicles or entities domiciled in countries or territories classed as tax havens, as well as of transactions with related parties. Lastly, information must be included in the annual corporate governance report on the company’s risk (including tax) control systems.

These provisions, aimed at limiting the tax risks borne by companies, only affect, as noted, listed companies but their effects may be considered to extend, in some way, to all commercial companies, given the clear connection that these duties have with the provisions of the Commercial Code on the liability of legal entities and the relationship between that liability and the existence of corporate compliance systems at the entity.

In addition, the reform has a determining effect on the setting of boardroom and senior management pay, which will need to be taken into account given the recent legal change (in the new Corporate Income Tax Law) according to which directors’ remuneration for performing senior management or other tasks under an employment contract with the entity will not be treated as gratuities. In practice, the tax authorities have been examining this aspect closely in their audits of companies.

Lastly, the corporate/commercial law reform reinforces the directors’ liability and enshrines the principle of differentiated liability taking into account the tasks conferred on each director. This principle does not appear to square with the principle usually followed in the area of tax liability, which rests on the equal and joint and several liability of all the directors.



  • 1. Human rights.- The European Convention on Human Rights precludes imposing administrative penalties for facts that have already been the subject of a criminal proceeding (European Court of Human Rights. Judgment of November 27, 2014)
  • 2. Tax on economic activities.- The increase in the situation multipliers in the Ordinance must be clearly justified (Basque Country High Court. Judgment of April 14, 2014)
  • 3. Tax on the value of electricity output.- Constitutionality of the tax (Constitutional Court. Judgment of November 6, 2014)
  • 4. Administrative procedure.- The authorities must evidence that they have informed the taxpayer of his inclusion in the electronic notice system (Madrid High Court. Judgment of July 3, 2014)
  • 5. Review procedure.- Defects in previously produced documentation may be rectified in an appeal (Supreme Court. Judgment of November 10, 2014)

II. Decisions and rulings Error! Bookmark not defined

  • 1. EU Law.- A state cannot rely on EU legislation in order not to apply its own domestic legislation to the detriment of individuals (Central Economic-Administrative Tribunal. Decision of October 23, 2014)
  • 2. Corporate income tax.- Dividends distributed after losses are offset against equity, are an indirect return of contributions to the shareholders (Central Economic-Administrative Tribunal. Decision of October 31, 2014)
  • 3. Corporate income tax.- Revenues from debt write-offs and deferrals under insolvency proceedings are taken into account in the minimum tax prepayment to the extent that they are recognized in the tax base (Directorate-General of Taxes. Ruling V2806-14, of October 17, 2014)
  • 4. Corporate income tax.- Calculation of indexation allowance multipliers (Directorate-General of Taxes. Ruling V2739-14, of October 13, 2014)
  • 5. Corporate income tax.- The tax credit for environmental investments does not apply to expenses incurred to obtain the carbon footprint certificate or to purchase and plant trees to offset CO2 emissions (Directorate-General of Taxes. Ruling V2737-14, of October 13, 2014)
  • 6. Corporate income tax.- The temporary restriction on tax-deductible amortization/depreciation does not apply to companies of a reduced size even if they do not engage in economic activity (Directorate-General of Taxes. Rulings V2613-14, of October 6, 2014, and V2725-14, of October 10, 2014)
  • 7. Corporate income tax.- The capitalization of a loan by the sole shareholder does not generate a gain at the debtor (Directorate-General of Taxes. Ruling V2578-14, of October 1, 2014)
  • 8. Corporate income tax.- An impairment loss on a holding caused by the devaluation of a foreign currency is not tax deductible (Directorate-General of Taxes. Ruling V2566-14, of October 1, 2014)
  • 9. Personal income tax.- VAT must be included in the cost for the purposes of calculating compensation in kind consisting of the right to use a dwelling (Directorate-General of Taxes. Ruling V2779-14, of October 15, 2014)
  • 10. Administrative procedure.- It is lawful not to consider a document in the case file that has not been translated into any official language (Central Economic-Administrative Tribunal. Decision of October 23, 2014)
  • 11. Administrative procedure.- The statute-barring of the right to collect tax entails the statute-barring of the right to assess tax (Central Economic-Administrative Tribunal. Decision of October 23, 2014)
  • 12. Special procedure for rectifying errors.- The incorrect assessment of a document contained in the case file may be considered a factual error (Central Economic-Administrative Tribunal. Decision of October 23, 2014)

III. Legislation Error! Bookmark not defined

  • 1. General State Budget for 2015
  • 2. Regulatory adaptation of amendments by Law 28/2014 to the VAT Law
  • 3. Changes in the regulations for excise and special taxes, the tax on fluorinated greenhouse gases and personal income tax
  • 4. Amendment to the economic and tax regime of the Canary Islands
  • 5. Changes to VAT forms 390, 303 and 322 and to form 763, self-assessment for the tax on gaming activities
  • 6. Average sale prices for 2015 of certain means of transportation for the purposes of value verification
  • 7. Automatic exchange of information in the field of taxation
  • 8. Approval of forms 591 “Tax on the value of electricity output. Annual return of transactions with taxpayers” and 588 “Tax on the value of electricity output. Self-assessment due to cessation of activity from January to October”
  • 9. Personal income tax regulations
  • 10. Law amending the Corporate Enterprises Law to enhance corporate governance
  • 11. Personal income tax objective assessment method and simplified VAT scheme for 2015
  • 12. Tax reform
  • 13. Law on treaties and other international agreements
  • 14. Calendar of non-business days in matters pertaining to the central government for 2015

IV. Others

  • 1. Instruction on execution of special agreements with taxpayers subject to an insolvency order


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