Tax Newsletter - December 2019 | Legislation
Tax Newsletter - December 2019 | Legislation
VAT form 318 approved
The December 31, 2019 edition of the Official State Gazette published Order HAC/1270/2019 of November 5, 2019, approving form 318: VAT. Adjustment of the proportions of tax for assessment periods before commencement of habitual supplies of goods or services” and determining the place, manner, period and procedure for filing it.
This form has to be filed where taxpayers have been subject to the taxing powers of a provincial or central governing tax authority, in assessment periods before they commence habitual supplies of goods or services relating to their activity or to another different activity in later assessment periods, or where the proportion in which they are taxed by the various central or provincial government authorities has changed substantially in those same assessment periods, and on the form they can adjust the refunded tax.
That adjustment must be made according to the percentages of tax to each of the authorities concerned in the first complete calendar year following commencement of the habitual supplies of goods or services relating to their activities.
For these purposes, taxable persons will have to file a specific return with all the tax authorities affected by the adjustment (form 318 approved in this order is the form that must be filed with the central government tax authority), within the period allowed for filing the latest self-assessment return for the first complete calendar year following commencement of the habitual supplies of goods or services relating to their activities.
This order came into force on January 1, 2020.
Amendments to form 390: VAT annual summary, and the Order determining its filing procedure
The December 31, 2019 edition of the Official State Gazette published Order HAC/1274/2019 of December 18, 2019, amending Order EHA/3111/2009 of November 5, 2009, approving form 390: VAT annual summary return, and Order HAP/2194/2013 of November 22, 2013, on the procedures and general conditions for filing certain self-assessments, information returns, business taxation status notification forms, communications and refund applications of a tax nature.
The main new legislation introduced by this order is as follows:
- It has done away with the option of filing the following returns remotely by SMS: VAT annual summary return (form 390), annual return for transactions with third parties (form 347), and form 190: personal income tax withholdings from payments in cash and in kind. Salary income and income from economic activities, prizes and certain capital gains and attributions of income. Annual summary.
- A new name has been given to Box 662 on form 390: VAT annual summary. This box is for stating the amounts for offset generated in the year in any assessment period other than the last one where they are not included in box 97 on the same form 390, in other words, where they have not been transferred to other assessment periods in the year.
Its name has been changed to “Amounts for offset generated in the period, other than those included in box 97” (Cuotas pendientes de compensación generadas en el ejercicio y distintas de las incluidas en la casilla 97).
This order came into force on January 1, 2020. In particular, removal of the option to file the returns mentioned above remotely by SMS will be applicable for information returns relating to fiscal year 2019 and following years.
Approval of forms for providing proof of tax residence of foreign pension funds and collective investment vehicles
The December 31, 2019 edition of the Official State Gazette published Order HAC/1275/2019 of December 18, amending Order EHA/3316/2010 of December 17, 2010, approving nonresident income tax self-assessment forms 210, 211 and 213.
Royal Decree 595/2019 of October 18,2019 determined a new special system for providing proof of tax residence enabling certain types of pension funds and collective investment vehicles to claim the exemption allowed in article 14.1 c) of the revised Nonresident Income Tax Law.
This Order approves the return forms, and the adaptation of the documents required to be filed with form 210 in relation to providing proof of the tax residence of certain types of entities which as a general rule do not have a separate legal and tax personality.
Moreover, two new types of income have been added, 37 and 38, which those entities must use to identify that they are making use of the special method of proof for the purposes of claiming that exemption.
This order came into force on January 1, 2020. Although it should be noted that:
- The method for providing proof of residence of the entities mentioned will be applicable:
- In relation to making withholdings, to any withholdings that are required to be made on or after January 1, 2020.
- In relation to the returns on form 210, to any that are filed on or after January 1, 2020, and to any tax refund application procedures that have not ended on January 1, 2020.
- The new income type codes 37 and 38 have to be used in relation to any self-assessments on form 210 that are filed on or after January 1, 2020 in relation to income arising on or after January 1, 2019.
New tax stamp formats for bottles or other receptacles for alcoholic beverages
The December 31, 2019 edition of the Official State Gazette published Order HAC/1271/2019 of December 9, 2019, approving the implementing rules for article 26 of the Excise and Other Special Taxes Regulations, approved by Royal Decree 1165/1995 of July 7, 1995, on tax stamps for alcoholic beverages.
This Order approves the new-format tax stamps that must be affixed to all bottles and other receptacles containing alcoholic beverages that are moved outside excise duty suspension, except for any that are moved in the transitional period specified in that Order.
The new wording of that article 26 contains important changes to these seals for their movement because, in addition to the visible identification code, they will contain an electronic security code that may be used to verify their authenticity and remotely link every tax stamp to information on the establishment where they are delivered (establishment and activity code) and its owner (taxpayer identification number).
Furthermore, the new formats will include enhancements from the standpoint of technology at Fábrica Nacional de Moneda y Timbre for the security and printing of these stamped documents.
This order came into force on January 1, 2020. For the first six months of 2020, however, establishments may affix any seals they have requested from AEAT before January 1, 2020 in certain formats.
Moreover, it is stated that any seals under Order EHA/3482/2007 of November 20, 2007 already affixed to bottles or other receptacles containing alcoholic beverages made or imported in the European Union before July 1, 2020 will remain valid, in all cases during their selling period, with a time limit expiring on January 1, 2022.
The average sale prices for 2020 of certain modes of transport for the purpose of auditing values have been published
The December 31, 2019 edition of the Official State Gazette published Order HAC/1273/2019 of December 16, 2019, approving the average sale prices to be applied in the management of transfer and stamp tax, inheritance and gift tax and the special tax on certain modes of transport.
Various orders relating to information returns have been amended
The December 31, 2019 edition of the Official State Gazette published Order HAC/1276/2019 of December 19, 2019, amending various orders relating to information returns.
The specific forms that have been amended are:
- Form 194. Information return. Personal income tax, corporate income tax and nonresident income tax withholdings from income from movable capital and income from the transfer, reimbursement, exchange or conversion of assets of any kind representing the raising and use of third-party capital.
The information relating to the field called “transfer, redemption, reimbursement, exchange or conversion value” (valor de transmisión, amortización, reembolso, canje o conversión) has been updated to include the same precision as for the cost value (valor de adquisición) field (no reduction of the transaction's ancillary costs).
- Form 198. Information return. Annual return for transactions in financial assets and other marketable securities.
This form has been changed to adapt it to the information needed to assist the taxpayer with reporting their traded securities.
- The “code number” (clave código) field has been changed to determine as a general rule that the securities must be identified with the issuer’s ISIN and taxpayer identification number.
- The “origin number” (clave de origen) field has been changed to make a distinction between mortis causa and inter vivos transfers for no consideration, and it has been clarified that the delivery of shares issued at no charge is considered a transaction for consideration.
- The “transaction code” (clave de operación) field has been changed to include new codes for transactions relating to stock splits and reverse stock splits (code L), delivery of shares issued at no charge (code X), and mergers and spin-offs with deferral (codes Y and Z, respectively).
- The codes relating to capital reductions have been reorganized, and a distinction now exists between those related to repayment of contributions (codes G and I), and the new codes relating to those from redemptions of shares (new code J) and those from undistributed income (new code K).
- The “market code” (clave de mercado) has been changed to make a distinction between official secondary securities markets in the European Union and in other countries.
- A new field has been added relating to transaction costs, additional information needed for the taxpayer’s investment securities, another for identification of certain related transactions (new field called “order number of the related transaction” (número de orden de la operación relacionada)), and for amounts of monetary compensation delivered or received in business restructuring transactions.
- A new “transaction time” (hora de la operación) field has been created relating to intraday transactions, to know the order in which a sequence of transactions took place.
- Lastly, the “declarer type” (naturaleza del declarante) field has been changed, which currently appears as a check on registration type 1, and has changed to registration type 2, thereby improving computer validations to prevent the errors that had been occurring.
- Form 196. Information return. Annual summary of tax withholdings from income from movable capital and other income by reason of the consideration derived from accounts at all kinds of financial institutions.
It has been changed to allow a foreign address to be supplied for notification purposes.
- Form 193. Information return. Tax withholdings from certain kinds of income from movable capital. Tax withholdings from certain kinds of income.
The “payment” (pago) field has been changed to prevent completion errors for dividends from foreign shares where the reporting institution is not the first payer in Spain.
- Form 280. Annual information return on long-term savings plans.
The “return identification number” (número identificativo de la declaración) and “previous return’s identification number” (número identificativo de la declaración anterior) fields have been changed to replace the multi-delivery system (up to 30,000 records) with the new online TGVI system, applicable to this form since 2019.
- Form 184. Annual information return. Pass-through entities.
The information fields relating to income from economic activities have been changed. Since 2015, form 184 has contained a reduced list of certain expenses (i.e. personnel expenses, goods and services acquired from third parties, deductible taxes other than income tax and finance costs and other tax deductible expenses).
For fiscal year 2019 a longer list of expenses has been included for economic activities under the (normal and simplified) direct assessment system: personnel expenses, operating expenses, deductible taxes other than income tax, leases and royalties, upkeep and repairs, independent professional services, utilities, finance costs, depreciation and amortization expense, provisions and other tax deductible expenses.
New fields have been included for listing expenses in relation to income from movable capital relating to interest and other finance costs, upkeep and repair (for the fiscal year and for the last four years which have not been deducted), taxes other than income tax and surcharges, delinquent accounts receivable, amounts due to third parties, insurance premiums, depreciation expense for real estate and movable property, and other deductible expenses.
Additionally, a new field has been included relating to the number of days in which the building has been leased or loaned for use.
- Form 289. Annual information return. Financial accounts in the field of mutual assistance (CRS).
The contents of schedules I and II have been updated to reflect the current list of countries committed to exchange of information, and to include on the list the countries with which information will be exchanged in and after 2020.
This order came into force on December 31, 2019, and will be applicable for the first time for returns relating to 2019 that are filed in 2020, except for the changes relating to form 198, which will be applicable to returns relating to 2020 that are filed in and after 2021.
Approval of forms for registration at the commercial registry of individuals providing services to companies and trusts
The December 28, 2019 edition of the Official State Gazette published Order JUS/1256/2019 of December 26, 2019, on registration at the commercial registry of individuals and legal entities that in a business or professional capacity provide the services described in article 2.1.o) of Anti-Money Laundering and Counter-Terrorist Financing Law 10/2010 of April 28, 2010.
Wealth tax renewed for 2020 and other tax measures
The December 28, 2019 edition of the Official State Gazette published Royal Decree-Law 18/2019 of December 27, 2019, adopting tax and cadastral measures along the same lines as in previous years.
See our Alert dated December 30, 2019 for a summary of this royal decree.
Publication of the annual equivalent rate for the first calendar quarter of 2020, for the purpose of characterizing certain financial assets from a tax standpoint
The December 26, 2019 edition of the Official State Gazette published the decision of December 16, 2019, by the Office of the General Secretary for the Treasury and International Finance, which, as is now the custom, sets out the reference rates that will apply for the calculation of the annual effective interest rate for the purposes of characterizing certain financial assets from a tax standpoint, this time for the first calendar quarter of 2020. The rates are as follows:
- Financial assets with terms of four years or less: -0.358 percent.
- Assets with terms between four and seven years: -0.068 percent.
- Assets with ten-year terms: 0.350 percent.
- Assets with fifteen-year terms: 0.559 percent.
- Assets with thirty-year terms: 1.062 percent.
In all other cases, the reference rate for the period closest to the period when the issuance is made will be applicable.
The 2020 non-business day calendar for central government public services has been published
The December 4, 2019 edition of the Official State Gazette published the decision of November 27, 2019, by the Office of the Public Services Secretary, which establishes the calendar of non-business days in relation to central government public services for 2020, for the purposes of computing time periods.
Objective assessment method for personal income tax purposes and simplified VAT rules for 2020
The November 30, 2019 edition of the Official State Gazette published Order HAP/1164/2019 of November 22, 2014, implementing for 2020 the personal income tax objective assessment method and the simplified special VAT scheme.
The order has retained the amounts of the signs, indexes, modules, reductions and instructions that were already applicable for 2019. Among others, it has retained the reduction allowed for economic activities carried on in Lorca.
The order came into force on December 1, 2019, and is effective for 2020.