Law 10/2020 of 29 December amending the General Tax Law to transpose Directive (EU) 2018/822 on mandatory automatic exchange of information in the field of taxation regarding cross-border arrangements

OFFICIAL STATE BULLETIN
No. 340 Wednesday, December 30, 2020 Sec. I. Page 122954
I. GENERAL PROVISIONS
HEAD OF STATE
17265 Law 10/2020, of December 29, amending Law 58/2003, of December 17, General Tax Law, in transposition of Council Directive (EU) 2018/822 of May 25, 2018, amending Directive 2011/16/EU as regards mandatory and automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.

FELIPE VI
KING OF SPAIN
To all those who see and understand this document.
Know ye: That the General Courts have approved and I come to sanction the following law:

PREAMBLE
I
Council Directive (EU) 2018/822 of May 25, 2018, amending Directive 2011/16/EU as regards mandatory and automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, establishes the obligation to report certain potentially aggressive cross-border tax planning mechanisms. This obligation must be transposed by the Member States.

The duty to report is established with two fundamental purposes. On the one hand, the obtaining of information with the aim of combating tax avoidance and evasion. On the other hand, a deterrent purpose regarding the implementation of aggressive tax planning mechanisms. From this perspective, it is necessary to clarify that the obligation to declare a cross-border mechanism does not imply, per se, that said mechanism is fraudulent or evasive, but only that certain indicative circumstances of tax planning exist in it that make it subject to the obligation to declare.

It is also necessary to specify that the declaration of information and the lack of reaction by the tax administration do not imply the acceptance of the legality of the declared cross-border mechanisms.

The transposition is housed in Law 58/2003, of December 17, General Tax Law, for those matters that recommend their regulation by a norm with legal rank, completing this transposition with the novelties included in the General Regulation of tax management and inspection actions and the development of common rules for tax application procedures, approved by Royal Decree 1065/2007, of July 27.

II
The transposition is channeled at the legal level through two new additional provisions introduced into Law 58/2003, of December 17, General Tax Law.

The first establishes the basic guidelines for the information obligation regarding certain tax planning mechanisms in accordance with the aforementioned Directive and the general regime of information obligations existing in our tax law. Furthermore, this provision foresees two independent obligations at the legal level, but related to the previous one, which are also established in Council Directive 2011/16/EU, such as the obligation of intermediaries to update information on marketable cross-border mechanisms as well as the duty to inform about the use of cross-border mechanisms by the interested taxpayers involved.

Furthermore, following the inspiring principles of the Directive, within the legal limits prefigured by our legal system, the duty of professional secrecy is recognized for the purposes of the aforementioned information obligations to all those who have the status of intermediaries according to the Directive and provide neutral advice related to the mechanism that is limited solely to evaluating its compliance with applicable regulations.

In addition, the exemption from the eventual liability of intermediaries that they might incur for the declaration of the data imposed by the information obligation is regulated.

On the other hand, another additional provision is introduced to regulate the communication obligations between the interveners and participants in the cross-border tax planning mechanisms subject to declaration.

As a logical corollary of the previous information obligations, the sanctioning regime associated with the non-compliance with said obligations is regulated.

III
In accordance with the provisions of Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations, the drafting of this Law has been carried out in accordance with the principles of necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency.

Thus, the principle of necessity and effectiveness is fulfilled, as the transposition of Directive (EU) 2018/822 is necessary through the incorporation of modifications of various norms of the Legal System that have legal and regulatory rank.
The principle of proportionality is also fulfilled, as the mode of addressing the strictly required objectives mentioned above has been observed exclusively.

Regarding the principle of legal certainty, the coherence of the text with the rest of the national legal system, as well as with that of the European Union, has been guaranteed. In fact, the legal norm responds to the need to transpose the European Union norm into Spanish Law.
The principle of transparency, without prejudice to its official publication in the "Official State Bulletin", has been guaranteed through the publication of the Draft Bill, as well as its Report on the Regulatory Impact Analysis, on the electronic headquarters of the Ministry of Finance, so that these texts could be known in the hearing and public information procedure by all citizens.

Finally, in relation to the principle of efficiency, it has been sought that the norm generates the least administrative burdens for citizens, as well as the lowest indirect costs, promoting the rational use of public resources; indeed, some of the measures incorporated even entail a reduction of such burdens.

Finally, it should be noted that the norm falls within the scope of so-called "mutual assistance" as defined in the General Tax Law, which participates in the legal nature of international relations. This norm is issued under the protection of what is established in Article 149.1. 3rd and 14th of the Spanish Constitution, which attributes to the State competence in matters of international relations and general finance, respectively.

cve: BOE-A-2020-17265
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OFFICIAL STATE BULLETIN
No. 340 Wednesday, December 30, 2020 Sec. I. Page 122955

OFFICIAL STATE BULLETIN
No. 340 Wednesday, December 30, 2020 Sec. I. Page 122956

Single Article. Modification of Law 58/2003, of December 17, General Tax Law.
Law 58/2003, of December 17, General Tax Law, is modified as follows:

One. A new twenty-third additional provision is introduced, with the following wording:

"Twenty-third Additional Provision. Information obligation on cross-border tax planning mechanisms.

1. Persons or entities that have the status of intermediaries or interested taxpayers for the purposes of this obligation, according to Article 3, paragraphs 21 and 22, of Council Directive 2011/16/EU of February 15, 2011, on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, shall supply the tax administration with the following information, in accordance with the provisions of Articles 29, 29 bis, and 93 of this Law and in the terms established by regulation:

a) Information on cross-border mechanisms defined in Article 3.18 of Council Directive 2011/16/EU in which they intervene or participate when any of the distinctive features determined in Annex IV of the aforementioned Directive are present. b) Update information on the marketable cross-border mechanisms referred to in Article 3.24 of Council Directive 2011/16/EU. c) Information on the use in Spain of the cross-border tax planning mechanisms referred to in letters a) and b) above.

For the purposes of this information obligation, cross-border tax planning mechanisms subject to declaration shall not include those agreements, legal transactions, schemes, or cross-border operations based on communicated tax regimes and expressly authorized by a decision of the European Commission.

2. Those who have the status of intermediaries according to the aforementioned Directive, regardless of the activity developed, and who have advised regarding the design, marketing, organization, making available for execution, or management of the execution of a cross-border mechanism defined in the Directive, with the sole object of evaluating the adequacy of said mechanism to applicable regulations and without seeking or facilitating its implementation, shall be exempt from the information obligation due to the duty of professional secrecy referred to in paragraph 5 of Article 8 bis ter of Council Directive 2011/16/EU.

The intermediary bound by the duty of professional secrecy may be released from it through authorization communicated credibly by the interested taxpayer.

3. Compliance by intermediaries with the information obligation regarding tax planning mechanisms referred to in Council Directive 2011/16/EU, in the legally required terms, shall not constitute, according to the applicable legal regime, a violation of restrictions on the disclosure of information imposed by contract or regulation, and shall not imply any type of liability for the obligated subjects towards the interested taxpayer who is the holder of said information.

4. The following constitute tax infringements:

a) Failure to submit the information declarations referred to in this additional provision within the deadline.

The infringement shall be serious, and the sanction shall consist of a fixed monetary fine of 2,000 euros for each data or set of data referring to the same mechanism that should have been included in the declaration, with a minimum of 4,000 euros and a maximum equivalent to the fees received or to be received for each mechanism or to the value of the fiscal effect derived from each mechanism calculated in the terms established by regulation, depending on whether the infringer is the intermediary or the interested taxpayer, respectively. The maximum limit shall not apply when it is lower than 4,000 euros.

Notwithstanding the above, when a cross-border mechanism lacks value in the terms established by regulation and the infringer is in their capacity as an interested taxpayer, the equivalent to the fees received or to be received by the intermediary shall be computed as the maximum limit.

In the absence of fees, the limit shall refer to the market value of the activity whose concurrence would have led to the consideration of intermediary, calculated in accordance with the provisions of Article 18.1 of Law 27/2014, of November 27, on Corporate Tax.

For the purposes of applying the aforementioned maximum limits, the infringing subject shall prove the concurrence and magnitude thereof.

The sanction and the minimum and maximum limits provided for in this paragraph shall be reduced by half when the information has been submitted out of deadline without prior request from the tax administration.

If incomplete, inaccurate, or false information declarations had been submitted within the deadline and subsequently a complementary or substitutive declaration is submitted out of deadline without prior request from the tax administration, the infringement referred to in letter b) of this paragraph in relation to the declarations submitted within the deadline shall not occur, and the sanction resulting from the application of this paragraph regarding what was declared out of deadline shall be imposed.

b) The submission of information declarations referred to in this additional provision in an incomplete, inaccurate, or false manner.

The infringement shall be serious, and the sanction shall consist of a fixed monetary fine of 2,000 euros for each data or set of data omitted, inaccurate, or false referring to the same mechanism that should have been included in the declaration, with a minimum of 4,000 euros and a maximum equivalent to the fees received or to be received for each mechanism or to the value of the fiscal effect derived from each mechanism calculated in the terms established by regulation, depending on whether the infringer is the intermediary or the interested taxpayer, respectively. The maximum limit shall not apply when it is lower than 4,000 euros.

Notwithstanding the above, when a cross-border mechanism lacks value in the terms established by regulation and the infringer is in their capacity as an interested taxpayer, the equivalent to the fees received or to be received by the intermediary shall be computed as the maximum limit.

In the absence of fees, the limit shall refer to the market value of the activity whose concurrence would have led to the consideration of intermediary, calculated in accordance with the provisions of Article 18.1 of Law 27/2014, of November 27, on Corporate Tax.

For the purposes of applying the aforementioned maximum limits, the infringing subject shall prove the concurrence and magnitude thereof.

c) The submission of the information declarations referred to in this additional provision by means other than electronic, computerized, and telematic in those cases where there is an obligation to do so by said means.

The infringement shall be serious, and the sanction shall consist of a fixed monetary fine of 250 euros for each data or set of data referring to the same mechanism that should have been included in the declaration, with a minimum of 750 euros and a maximum of 1,500 euros.

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OFFICIAL STATE BULLETIN
No. 340 Wednesday, December 30, 2020 Sec. I. Page 122957

d) The infringements and sanctions regulated in this additional provision shall be incompatible with those established in Articles 198 and 199 of this Law."

Two. A new twenty-fourth additional provision is introduced, with the following wording:

"Twenty-fourth Additional Provision. Obligations between individuals derived from the information obligation of cross-border tax planning mechanisms.

1. Intermediaries exempted by the duty of professional secrecy from submitting the declaration of cross-border tax planning mechanisms shall credibly communicate said exemption to the other intermediaries and interested taxpayers participating in the aforementioned mechanisms, upon whom the obligation to submit the declaration rests, in the terms established by regulation.

2. Persons or entities that had the legal status of those obliged to declare and who had submitted the declaration shall credibly communicate their submission, in the terms established by regulation, to the rest of the intermediaries or, where applicable, to the rest of the interested taxpayers, who, by virtue of that, shall be exempt from the obligation to declare.

3. The following constitute tax infringements:

a) Failure to communicate as referred to in paragraph 1 of this additional provision within the established deadline or carrying out the communication omitting data or including false, incomplete, or inaccurate data.

The infringement shall be considered minor and shall be sanctioned with a fixed monetary fine of 600 euros.

This infringement shall be considered serious when the failure to communicate within the deadline coincides with the failure to declare the corresponding cross-border tax planning mechanism referred to in letter a) of paragraph 1 of the twenty-third additional provision of this Law by another intermediary or, where applicable, by the interested taxpayer who should have submitted the declaration if said communication had been made. In these cases, the sanction shall be that which would have corresponded to the infringement for the failure to submit the aforementioned declaration, provided for in letter a) of paragraph 4 of the twenty-third additional provision of this Law.

b) Failure to communicate as referred to in paragraph 2 of this additional provision within the established deadline or carrying out the communication omitting data or including false, incomplete, or inaccurate data.

The infringement of this article shall be considered minor and shall be sanctioned with a fixed monetary fine of 600 euros."

Single Transitional Provision. Transitional regime for the information obligations of cross-border mechanisms subject to declaration that have been carried out prior to the entry into force of this Law.

Cross-border mechanisms whose first phase of execution has been carried out, in the terms established by regulation, between June 25, 2018, and June 30, 2020, shall be subject to declaration within the deadlines established by regulation.

Likewise, this Law shall apply to cross-border mechanisms subject to communication whose obligation arose from July 1, 2020, in accordance with Council Directive 2011/16/EU of February 15, 2011, on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC.

cve: BOE-A-2020-17265
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OFFICIAL STATE BULLETIN
No. 340 Wednesday, December 30, 2020 Sec. I. Page 122958

First Final Provision. Modification of Law 29/1987, of December 18, on Inheritance and Gift Tax.

With effect from the entry into force of this Law, paragraph 4 of Article 34 of Law 29/1987, of December 18, on Inheritance and Gift Tax, is modified, which shall read as follows:

"4. In accordance with the provisions of the previous paragraph, the regime for the self-assessment of the tax is established as mandatory in the following Autonomous Communities:
– Autonomous Community of Andalusia.
– Autonomous Community of Aragon.
– Autonomous Community of the Principality of Asturias.
– Autonomous Community of the Balearic Islands.
– Autonomous Community of the Canary Islands.
– Autonomous Community of Cantabria.
– Autonomous Community of Castilla-La Mancha.
– Community of Castilla y León.
– Autonomous Community of Catalonia.
– Autonomous Community of Galicia.
– Autonomous Community of the Region of Murcia.
– Community of Madrid.
– Valencian Community."

Second Final Provision. Competential Title.

This Law is issued under the protection of what is established in Article 149.1. 3rd and 14th of the Spanish Constitution, which attributes to the State competence in matters of international relations and general finance, respectively.

Third Final Provision. Incorporation of European Union Law.

Through this Law, Council Directive (EU) 2018/822 of May 25, 2018, amending Directive 2011/16/EU as regards mandatory and automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, is incorporated into Spanish law.

Fourth Final Provision. Entry into force.

This Law shall enter into force on the day following its publication in the "Official State Bulletin".

Therefore,

I command all Spaniards, individuals, and authorities to observe and enforce this law.

Madrid, December 29, 2020.

FELIPE R.
The President of the Government,
PEDRO SÁNCHEZ PÉREZ-CASTEJÓN

cve: BOE-A-2020-17265
Verifiable at https://www.boe.es https://www.boe.es OFFICIAL STATE BULLETIN D. L.: M-1/1958 - ISSN: 0212-033X