Following the news on VAT in relation to e-commerce, on 15 June the Spanish government modified the VAT regulations. As we mentioned in a previous article on the introduction of the single window environment with respect to distance sales, this is an attempt to facilitate and promote digital commerce by implementing measures reducing the administrative load associated therewith. Below is a brief summary of certain aspects of the VAT regulations.
For years now, e-commerce has not stopped growing. It is undoubtable, however, that due to the prevention measures against COVID-19, e-commerce has increased significantly. It is within this context that modifications have been made to the European Directive on VAT with respect to so-called distance sales. It must be noted that this modification is exclusively directed at sales made with final customers, not business owners, which are located in EU countries other than that of the vendor’s registered address.
In Spanish VAT, there are two main systems for refunds: one for business owners established in Spain and another for non-residents. The latter is drastically different from the refund method regulated for business owners with establishments in Spain; this article, however, will focus exclusively on the deadline for requesting said refund.
Following the ruling by the Court of Justice of the European Union (“CJEU” Case C-7/20), it is worth recalling several essential concepts applicable to VAT taxation on the importation of goods. In this case, the CJEU was determining whether the EU directive should be interpreted in the sense that VAT on importation “always” arises in the territory in which the goods enter or in that in which a failure to comply with the customs legislation is found, as in the case before the court.
The Spanish tax system is comprised of taxes on three levels: state, regional (Autonomous Community level) and local (city councils).
After several extensions, a difficult political negotiation and the end of the transitory period, the exit of the United Kingdom from the European Union is fully effective. This means that from 1 January it will receive the same treatment as any other country that does not belong to the EU. The economic and legal consequences of said exit are numerous and varied, but in this brief article we wish to emphasise the changes which will take place in terms of VAT and which companies will note immediately.
In the context of scarce liquidity, it is not surprising that companies do not have the necessary means to pay the debts due during the course of a tax inspection, or directly cease their activity. It is in these scenarios where the liability of the directors, or members of the board of an entity, could enter into play. Let us recall that this liability is usually subsidiary, that is, the company previously declares itself insolvent due to failure to pay outstanding tax debts or penalties.
Despite the fact that at the OECD level no agreement has been reached about how to approach the taxation of digital services, the Spanish government decided to approve the so-called “Google Tax,” which will enter into force definitively on 16 January 2021.
Within the “Restructuring Plan” proposed by the Spanish government, and as declared by various ministers, would be an “unavoidable” increase in the Corporate Income Tax (Impuesto sobre Sociedades or “IS”) in Spain.
The Spanish government, far from praiseworthy objectives to relaunch business activity such as the strengthening of liquidity and savings for companies and families, is planning an aggressive increase in taxes. Among them is the Wealth Tax (Impuesto del Patrimonio or “IP”).
After the entry into force of the state of alarm, and until its end, the deadline to prepare the annual accounts is suspended. In addition, after the state of alarm is lifted (foreseen for the month of May), companies will have a “new term of three months” in which to prepare them. To this we must add that the shareholders generally have another, additional period of three months to approve the accounts.