The control actions of the international tax regime form part of all initiatives that the international organizations conduct and of which Spain is part such as the European Union, the OECD (Organization for Economic Cooperation and Development), the Group of 20 (G20), and the Council of Europe.
In particular, in the field of international taxation in 2014, the following concepts will attract attention:
The abusive use of internal and international regulations in Spain
- Actions relative to the abusive use of hybrid mechanisms, either hybrid entities or hybrid financial instruments, that by using different qualifications of certain legal forms or operations in the tax regimes of various countries and the Conventions on double taxation determine an artificial reduction of their tax
- Control actions on those foreign payments of specific relevance or operations of great complexity for which anti-abuse measures apply as stated in the internal regulation or in bilateral conventions to guarantee the adequate level of taxation of incomes in Spain.
Control actions of operations conducted in tax havens in Spain
- Verification of the taxation of operations conducted with persons or entities residing in tax havens to guarantee compliance with limitations and special rules provided in Spanish tax regulations on this topic
- Control on persons and entities that fictitiously identify the location of their tax residence as other countries, especially in countries or territories with low taxation regimes or tax havens, with the purpose of avoiding the payment of tax in Spain
Transfer prices in Spain
- Control of the right application of regulations concerning transfer prices, especially in operations of complex corporate restructuring, intra-group services, cost-sharing agreements, and operations on relevant intangible costs
- Impetus of agreed prior assessments as instruments of prevention against fraud that eliminate the risks deriving from the companies’ transfer pricing policy
Other control actions in Spain considering the international tax regime
- Detection of permanent establishments located in Spain for those taxpayers who pay tax as non-residents without permanent establishments, especially in the framework of multinational groups present in Spain. For this topic, attention focuses on the structure and functionality of both subsidiary entities that are physically located in Spain as well as those that are not
- Activities developed in Spain for non-resident professionals, artists, or athletes, to verify their correct taxation
This article is not considered as legal advice