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NON RESIDENTS TAXATION

NON RESIDENTS TAXATION. Carolina del Campo Azpiazu Deputy Director General for Non Residents Taxation. EU: DIRECT TAXATION. Directives: Parent-subsidiary Interests and Royalties: transitional period Mergers, Savings Joint Transfer Pricing Forum (JTPF) MAP Arbitration Documentation APA.

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NON RESIDENTS TAXATION

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  1. NON RESIDENTS TAXATION Carolina del Campo Azpiazu Deputy Director General for Non Residents Taxation

  2. EU: DIRECT TAXATION • Directives: • Parent-subsidiary • Interests and Royalties: transitional period • Mergers, Savings • Joint Transfer Pricing Forum (JTPF) • MAP • Arbitration • Documentation • APA

  3. INTERNAL LEGISLATION (I) Recent changes: corporation tax • Transfer pricing rules • New regulations on transfer pricing: methods and ALP principles • Penalties • Documentation • limitations for SME: • transactions with associated enterprises, less than 100.000€ • Penalties: a maximum is established • APA

  4. INTERNAL LEGISLATION (II) Recent changes: Non residents taxation • Taxable base: net vs gross • MAP regulation • Exemptions: • CIV resident in EU (Directive) • Pension funds resident in EU • Royalties: finalisation of transitional period • Public (and Private) debt

  5. OECD: RECENT WORKS (I) Global Forum • Exchange of information Agreements • At least 12 • White/grey list • Monitoring

  6. OECD: RECENT WORKS (II) 2008 Update • Arbitration clause • New paragraph 5 to Article 25: very similar to Arbitration Convention • Two years • Arbitration comission • Does not need to waive its rights before Courts • Different content for the AC • DTA?

  7. OECD: RECENT WORKS (III) 2008 Update • Article 7: Report on the attribution of profits to permanent establishment • Attribution of free capital • Symmetry • Existing DTA? • REIT: new proposal for future DTA

  8. OECD: RECENT WORKS (IV) 2010 Update • New Article 7: • ALP principle: only in relation to the attribution of profits to the permanent establishment • Notional income • Elimination of double taxation: similar to 9.2 • DTA?

  9. OECD: RECENT WORKS (V) 2010 Update • CIV • Persons, residents, beneficial owner • Entitlement to Treaty benefits • Different ways: • Directly • Equivalent beneficiaries • In the name of • Pilot/Trace

  10. DTA POLICY (I) • Spanish Tax havens list • DTA with tax havens • Exchange of information Article • Very important Protocol • Antiabuse rules • Rest of the Treaties: Comprehensive EOI Article • Renegotiations: necessary

  11. DTA POLICY (II) • 73 in force (Colombia, Moldavia, El Salvador, Jamaica, Serbia y Trinidad y Tobago, ...)      •  9  ratified by Spain (Bosnia-Herzegovina, Costa Rica,  Kazajstán, Kuwait, Nigeria, Senegal, Uruguay, Luxemburg (Protocol) y Belgium (Protocol)) • 8 initialled ( Albania, Armenia, Byelorussia, Georgia, Namibia y Syria Barbados) •  14  in negotiation (Azerbaijan, Bahrain, Cabo Verde, Libya, Qatar, Pakistan, Ukraine, Dominican Republic, Guatemala, Jordan, Panama, Cyprus, Hong Kong y Oman) • 3 Renegociaciones: Germany, Canada, UK • Terminated: Dinamarca

  12. MAIN DTA PROBLEMS • Certificates of residence • Taxation of services: • Article 14 vs Article 7 • Withholding tax on the gross • CIV, partnerships, trust • Transfer pricing and Article 9 • Definition of permanent establishment • Royalties (software)

  13. DISPUTE RESOLUTION MECHANISMS (I) • Article 25.1: MAP to guarantee the taxation in accordance with the Convention • Not obliged to reach an agreement (arbitration) • Article 9.2 • All DTA • Problems with old treaties • Time limits • Three year rule • Article 25.3: exchange of letters

  14. DISPUTE RESOLUTION MECHANISMS (II) • New regulation in relation to MAP and EU Arbitration • Organizes the internal process for MAP: • Competent Authority • Time periods • Rights and obligations of taxpayers: documentation… • Mode of implementation • Guarantees that MAP will reach a solution (when possible) within a reasonable period of time

  15. DISPUTE RESOLUTION MECHANISMS (III) Suspension in the collection of taxes • Before: it could only be suspended under Court approval • Now: it can be suspended when an MAP is initiated, but only when the Court cannot do it. Other issues: interest payments

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