Tax Newsletter - September 2017

09 / 27 / 2017

September newsletter prepared by professionals from the Tax Department.

1. Judgments

1 Corporate income tax.- Credit for publicity and advertising expenses related to support programs for events of exceptional public interest: they do not include costs of containers and packaging (Supreme Court. Judgment of July 13, 2017)
2 Corporate income tax and management procedure.- Allowed application to amend self-assessment claiming reinvestment tax credit to replace it with a double taxation credit (National Appellate Court. Judgment of May 11, 2017)
3 Personal income tax.- Earned income paid to shareholder by artistic services company must be stated at market value (Supreme Court. Judgment of July 18, 2017)
4 Nonresident income tax.- A law establishing a general presumption of abuse is contrary to the Parent-Subsidiary Directive (Court of Justice of the European Union. Judgment of September 7, 2017, in case C-6/16)
5 Inheritance and gift tax.- Tax authorities barred from using a valuation method that the taxpayer was unable to apply when the tax became chargeable (Supreme Court. Judgment of July 12 , 2017)
6 VAT.- Gain on sale of shares is included in denominator for shared deductible proportion (National Appellate Court. Judgment of June 28, 2017)
7 VAT.- The first of two successive supplies in which intra-Community carriage takes place only after the second is not exempt (Court of Justice of the European Union. Judgment of July 26, 2017 in case C-386/2016)
8 Transfer and stamp tax.- Tax base is property value by reference to values published by the authorities, even if deeded price is higher (Castilla la Mancha High Court. Judgment of March 20, 2017)
9 Tax on increase in urban land value.- Assessments in respect of this tax are null and void by being based on articles rendered null and void by the Constitutional Court (Madrid High Court. Judgment of June 19, 2017)
10 Tax procedure.- Unlawfully interpreted as null and void: decisions declaring simultaneously a lapse of the time to conduct an audit and the start of a new audit (Supreme Court. Judgment of July 19 , 2017)
11 Management procedures.- On the grounds for valuation reports by experts appointed by the authorities (Supreme Court. Judgment of July 19, 2017; and Valencia High Court. Judgment of January 18, 2017)

2. Administrative doctrine

1 Corporate income tax.- Restructuring transactions protected by tax neutrality regime do not affect 95% reduction under Gift and Inheritance Tax Law (Directorate-General for Taxes. Rulings V1547-17, V1548-17, V1549-17, V1550-17, V1551-17, V1557-17, V1558-17, V1559-17 and V1605-17, rendered in June 2017)
2 Personal income tax.- Loan of property to shareholder treated as income from movable property if it does not amount to consideration for a service (Directorate-General for Taxes. Ruling V1641-17, of June 22, 2017)
3 Personal income tax.- Severance for dismissal not held unjustified by a court or Spanish Mediation Arbitration and Conciliation Service (SMAC) is not exempt. (Directorate-General for Taxes. Ruling V1366-17, of June 2, 2017)
4 Personal income tax.- Gifted tangible assets are depreciable (Directorate-General for Taxes. Ruling V1359-17, of June 2, 2017)
5 Personal income tax.- Proportional application of exemption for principal residence for individuals aged over 65 that have rented out part of their residence (Directorate-General for Taxes. Rulings V1299-17 y 1314-17, of May 29, 2017)
6 VAT.- There is an establishment if a party operates through two established subsidiaries hired to manufacture and market products (Central Economic- Administrative Tribunal. Decision of May 24, 2017)
7 Transfer and stamp tax.- Determination of tax base in notification of new construction and horizontal division (Directorate-General for Taxes. Ruling V1582-17, of June 19, 2017)
8 Management procedure.- Application for correction of self-assessment return not allowed to be denied by reason of the assessment causing the application not being final (Central Economic-Administrative Tribunal. Decision of July 11, 2017)
9 Penalty procedure.- Issuing false invoices (not just invoices with false or forged data) falls within the infringement defined in article 201 of the General Taxation Law (LGT) (Central Economic-Administrative Tribunal. Decision of July 20, 2017)
10 Penalty procedure.- Penalties may not be imposed having regard simply to the taxpayer’s particular personal circumstances (Central Economic-Administrative Tribunal. Decision of July 20, 2017)
11 Enforcement procedure.- Enforcement of an administrative decision after the end of the one month time limit does not carry a penalty related to lapse of time (Central Economic-Administrative Tribunal. Decision of July 13, 2017)

3. Legislation

1 Single administrative document (SAD): instructions for its completion
2 Publication of the Order on the information return for controlled transactions has been published