Publications

Council of the European Union authorizes Spain to reduce exercise tax on electricity for vessels at berth in a port

Law 6/2018, of July 3, 2018, on the General State Budget for 2018,  introduced an economic incentive for the use of electricity from the electricity grid on land to reduce atmospheric pollution at port cities. The use of that electricity for vessels at berth in ports to satisfy their electricity needs is considered to be better for the environment than the burning of bunker fuels by those vessels.

This measure was authorized by the Council of the European Union in its Implementing Decision 2018/1491 adopted on October 2, 2018.

Decision to allow future reduction to VAT rate applicable to electronic publications

On October 2, 2018, the Economic and Financial Affairs Council of the European Union reached an agreement on a proposal for a Directive allowing member states to apply reduced, super-reduced, or zero, VAT to electronic publications, allowing the alignment of VAT rules for electronic publications and physical publications.

Publication of draft royal decree amending Spanish Chart of Accounts

The draft royal decree amending (i) the Chart of Accounts approved by Royal Decree 1514/2007, of November 16, 20017; (ii) the Chart of Accounts for Small and Medium Sized Enterprises approved by Royal Decree 1515/2007, of November 16, 2007; (iii) the Rules on the Preparation of Consolidated Financial Statements approved by Royal Decree 1159/2010, of September 17, 2010; and (iv) the Rules Adapting the Chart of Accounts to not-for-profit entities approved by Royal Decree 1491/2011, of October 24, 2011 was made public on October 4, 2018.

This draft legislation contains the proposed adaptation of Spanish accounting legislation to two important international accounting projects concerning the treatment of financial instruments and the recognition of revenue from contracts with customers.

The reform is set to come into force on January 1, 2020.

Publication of first report on conflict in application of the law, regarding leveraged purchases

In the past, “fraud upon the law”, now “conflict in application of the law” (with the addition of its own characteristics) was not punishable. In the latest reform of the General Taxation Law, however, a new tax infringement was created, linked to this definition. So now, it is an infringement to breach tax obligations (failure to pay over tax or incorrectly applying for refunds and tax incentives or, lastly, unlawfully claiming tax assets) as a result of acts or transactions meeting the requirements for “conflict in application of the law”, or in other words, if they are artificial and no significant effects other than saving tax are achieved from using them.

For that infringement to exist, however, the act or transaction must be substantially the same as other acts or transactions on which an administrative interpretation had been established and published for public knowledge before the acts or transactions at issue were performed.

Under this legislation, the first report on “Conflict no 1” was published in October 2018. Corporate income tax. “Intragroup finance costs” (dated April 10, 2018). The report concludes that there is conflict in application of the law in relation to a purchase, by a Spanish company, of shares in companies in the same group with intragroup financing, after concluding that the reorganization has not had any relevant legal or economic effects other than an increase in deductible expenses (interest) arising from the intragroup financing.