Law 16/2012 of 27 December adopting various tax measures for public finance consolidation and economic activity

OFFICIAL STATE GAZETTE
No. 312 Friday, December 28, 2012 Sec. I. Page 88097
I. GENERAL PROVISIONS
HEAD OF STATE
15650 Law 16/2012, of December 27, adopting various tax measures directed towards the consolidation of public finances and the boost of economic activity.
JUAN CARLOS I
KING OF SPAIN
To all who see and understand this.
Know: That the General Courts have approved and I come to sanction the following law.
PREAMBLE
I
In recent months, various measures have been introduced in the tax field with the aim of consolidating public finances and, thus, correcting as soon as possible the main imbalances affecting the Spanish economy, primarily the reduction of the public deficit, all with the ultimate goal of contributing to its recovery, which have been incorporated into the legal system, basically, through Royal Decree-Law 20/2011, of December 30, on urgent measures in budgetary, tax and financial matters for the correction of the public deficit, Royal Decree-Law 12/2012, of March 30, introducing various tax and administrative measures directed towards the reduction of the public deficit, and Royal Decree-Law 20/2012, of July 13, on measures to guarantee budgetary stability and promote competitiveness. However, the evolution of public revenue continues to require the adoption of additional measures that, reinforcing these and complementing the previous ones, allow establishing the bases for a stable and lasting economic recovery. II In the field of Personal Income Tax, with the objective of contributing to fiscal consolidation, several measures are adopted. First, the deduction for investment in the primary residence is abolished from January 1, 2013. However, a transitional regime is established whereby taxpayers who acquired their primary residence before December 31, 2012, or paid amounts before that date for construction, expansion, rehabilitation, or carrying out works for reasons of disability in their primary residence, may continue to apply the deduction for investment in the primary residence in future tax years. Second, prizes from State lotteries, Autonomous Communities, National Organization of Spanish Blind, Spanish Red Cross, and analogous European entities, which were previously exempt, will be subject to Personal Income Tax through a special levy. Specifically, the special levy will accrue at the moment the prize is paid or satisfied, and a withholding or advance payment must be made which will have a liberatory character for the obligation to file a self-assessment for the same. On the other hand, the tax regime for other permitted games is clarified, allowing losses to be offset against gains obtained in that tax year, up to the limit of those gains. Third, with the aim of fiscally penalizing speculative movements, only capital gains and losses derived from the transfer of assets that have remained in the taxpayer's assets for more than one year will be included in the savings tax base. The calculation rule for the benefit in kind derived from the provision of housing to employees, when it is not owned by the company, is also modified. In this case, the benefit in kind will be quantified by the amount of the rental cost assumed by the employer. Finally, the treatment applied for the period 2007-2012, both in Personal Income Tax and Corporate Income Tax, for expenses and investments made in those years to habituate employees to the use of new
communication and information technologies, is extended for the year 2013, due to the boost it can provide to a relevant sector of economic activity. Finally, the taxation of indemnities or other remuneration of very high amounts derived from the termination of labor or commercial relationships is increased by reducing or, depending on the amount, eliminating the 40 percent reduction applicable when they have a generation period of more than two years or were obtained in a notably irregular manner over time. III In the field of Corporate Income Tax, a temporary measure is introduced, aimed at partially limiting, for large companies, the fiscally deductible depreciation corresponding to tax periods starting within the years 2013 and 2014, with the object of achieving an increase in revenue from this tax figure. On the other hand, for the 2013 tax year, the application of a reduced tax rate in Corporate Income Tax for maintaining or creating employment by micro-enterprises is extended, due to the beneficial effects it can have on economic activity; a corresponding measure in Personal Income Tax, in the form of a reduction of the net yield of economic activities, is also extended in terms of its validity. Furthermore, the specific criteria allowing the application of the special tax regime for residential leasing are relaxed, reducing the minimum number of housing units required and the period during which they must be maintained in lease, while simultaneously eliminating the size requirements for the housing units. Likewise, the size requirement for each leased housing unit is abolished. The tax regime provided for financial leasing contracts is also modified, through the early amortization of certain assets, in relation to State aid SA.34936 (2012/N), with the object of complying with the authorization received from the European Commission, according to which it has been considered a general measure and does not constitute State aid under the Treaty on the Functioning of the European Union. Finally, in line with the modification introduced in Personal Income Tax, the taxation of indemnities exceeding a certain amount is modified, by considering them as non-deductible expenses, regardless of whether they are correlated with the entities' income. IV For the positive effects it can generate in the business field, by favoring both internal financing and better access to the capital market, an option is established for Corporate Income Tax taxpayers, Personal Income Tax taxpayers carrying out economic activities, and Non-Resident Income Tax taxpayers operating in Spanish territory through a permanent establishment, to carry out a balance sheet update. This monetary update of accounting values, which has various regulatory precedents, incorporates known update techniques and involves a reduced tax burden. V The validity of the Wealth Tax, temporarily reinstated for the years 2011 and 2012 by Royal Decree-Law 13/2011, of September 16, is extended during
the 2013 tax year, as this will contribute to strengthening public revenue. VI Regarding Non-Resident Income Tax, and in a manner equivalent to that indicated regarding Personal Income Tax, a special levy is established on the aforementioned lottery prizes. In addition, the configuration of the Special Levy on Real Estate of Non-Resident Entities is modified, leaving exclusively entities resident in a country or territory considered a tax haven subject to this levy. VII In matters of Value Added Tax, first, a modification with a merely clarifying objective is introduced, such that it is expressly established that the allocation of properties promoted by communities of property to their partners, in proportion to their participation, constitutes a supply of goods. Furthermore, in the field of the tax base, it is provided that, in installment operations, it will be sufficient to request the collection of one of the installments to modify it; likewise, technical modifications with a clarifying purpose are introduced in cases of invoice rectification to recipients who do not act as entrepreneurs and professionals, with the objective that, in case of subsequent total or partial payment of the consideration by the recipient, they do not become indebted to the Public Treasury for the amount of the tax quota understood to be included in the payment made. VIII To avoid unnecessary administrative procedures for Public Administrations, which must present the document by which they establish preventive seizure annotations before the competent Autonomous Community, even if exempt from the Tax on Property Transfers and Documented Legal Acts, non-subjection to administrative documents of the modality of documented legal acts of the mentioned tax is established for preventive seizure annotations ordered ex officio by the competent Administration. IX Regarding local taxes, first, those in which certain economic exploitations are carried out are excluded from the exemption provided in the Real Estate Tax for properties forming part of the Historical Heritage. This aims to prevent the exploitation of the exemption by those who use the properties forming part of said Heritage to develop economic exploitations lacking general interest. However, in order to increase local autonomy, an optional bonus is created so that town councils, if they wish, can continue to benefit fiscally from said properties. On the other hand, the optional bonus applicable in the Tax on Constructions, Installations and Works when economic activities are developed that are declared of special interest or municipal utility due to social, cultural, historical-artistic, or employment promotion circumstances justifying such declaration, is extended to the Real Estate Tax and the Economic Activities Tax. This enhances the aforementioned local autonomy to stimulate activities of special interest or utility for the municipality. Regarding the Economic Activities Tax, for establishments that remain
open for a period less than a year, it is clarified that the reduction fixed in their corresponding rubric of the Tariffs will also apply to the surface quota, and the incompatibility between the application of said reduction and the filing of deregistration for cessation of activity is established. Finally, technical improvements affecting notifications, the technical-economic report of fees, and certain cases of non-subjection to the Real Estate Tax are incorporated. X Various measures are also introduced regarding the formation and maintenance of the Real Estate Cadastre. First, the possibility of an abbreviated procedure for the cadastral inspection procedure is foreseen, in line with what is provided in the General Tax Law, which allows dispensing with the prior hearing procedure before the resolution proposal when minutes with agreement are signed or when the regulations of the procedure provide for a subsequent objection procedure after said proposal. On the other hand, greater flexibility is provided for the update of cadastral values through the General State Budget Laws. Likewise, with the objective of improving the fight against tax fraud represented by the lack of incorporation into the Cadastre of real estate assets and their physical alterations, a new cadastral regularization procedure is regulated. And, finally, it is foreseen that from the application of said cadastral regularization procedure, a new cadastral value can be determined for real estate assets that have constructions on land of a rustic nature that are indispensable for the development of agricultural, livestock, or forestry exploitations, without the need for a general collective valuation procedure in the municipality. XI With respect to the Economic and Fiscal Regime of the Canary Islands, recent modifications included in the Value Added Tax Law are incorporated into the Law regulating the Canarian General Indirect Tax, as well as provisions so that the regime is uniform throughout the territory of the State. Similarly, with the same purpose, articles of the Canarian General Indirect Tax concerning the rules for the localization of supplies of goods, the accrual of supplies of goods and services, and the tax base of the Tax are modified. Finally, certain regulatory provisions in the laws regulating the Economic and Fiscal Regime of the Canary Islands in matters now regulated by an Autonomous Community Law as a consequence of the assumption of normative competencies attributed to this by the State are repealed. XII The Tax on Deposits in Credit Institutions is created with the intention of ensuring a harmonized fiscal treatment that guarantees greater efficiency in the functioning of the financial system. XIII Certain aspects of the regulation applicable to Public Limited Companies Listed for Investment in the Real Estate Market, known as SOCIMI, entities born in 2009, are modified, with the aim of creating a new investment instrument destined for the real estate
rental market, not only of housing, but of any urban property. The objective pursued by these entities was based on dynamizing the real estate rental market, establishing a mechanism that facilitated citizen participation in real estate ownership. To this end, these figures sought to guarantee stable profitability in the investment in their capital through mandatory profit distribution and adequate liquidity through the obligation of trading in regulated markets for these entities. However, experience has shown that there is a small number of entities that adhere to this special regime, possibly due to the requirements demanded for its application, which have turned it into a completely inoperative regime; therefore, it is necessary to review the legal framework of these entities to promote their constitution, with the object of boosting and dynamizing the Spanish real estate market, and providing liquidity to real estate investments. In this sense, in the substantive field of these entities, some of their requirements are relaxed, among which the possibility of listing on a multilateral trading system, or the elimination of requirements related to external financing, stands out, without renouncing the structural elements of configuration of these entities, in a manner similar to those existing in countries in our surroundings. However, the main novelty lies in the tax regime applicable to them, which is regulated in a manner similar to that in force in said countries, through the establishment of a zero percent tax rate for these entities regarding income derived from the development of their corporate purpose and specific objective. XIV Given the current situation of the cigarette market, it is necessary to increase the minimum tax imposed on them, up to 123.97 euros per 1,000 cigarettes. Along with the establishment of this new minimum applicable to cartons of 20 cigarettes sold below 3.95 euros, a slight increase of this minimum is included for those products whose cartons of 20 cigarettes are sold below a certain price. In a manner similar to that established for cigarettes, the minimum provided for cigars, small cigars, and rolling tobacco is updated, fixing a similar increase of the minimum for those of these products that are sold at lower prices.

CHAPTER I
Personal Income Tax
Article 1. Modification of the deduction for investment in the primary residence.
With effect from January 1, 2013, the following modifications are introduced in Law 35/2006, of November 28, on Personal Income Tax and partial modification of the laws on Corporate Income Tax, Non-Resident Income Tax, and Wealth Tax:
One. Paragraph 1 of Article 67 is modified, which reads as follows:
"1. The state net tax amount of the Tax will be the result of reducing the state gross tax amount by 50 percent of the total amount of the deductions provided for in Article 68 of this Law."
Two. Paragraph 1 of Article 68 is abolished.
Three. Paragraph 2 of Article 69 is modified, which reads as follows:
"2. The limits of the deduction referred to in paragraph 2 of Article 68 of this Law will be those established by the Corporate Income Tax regulations for incentives and stimuli to business investment. These limits will apply to the tax amount resulting from reducing the sum of the gross tax amounts, state and autonomous, by the total amount of the deduction for actions for the protection and dissemination of the Spanish Historical Heritage and cities, complexes, and properties declared World Heritage, provided for in Article 68.5 of this Law." Four. Paragraph 1 of Article 70 is modified, which reads as follows:
"1. The application of the deduction for the savings-enterprise account will require that the verified amount of the taxpayer's assets at the end of the tax period exceeds the value that its verification yielded at the beginning of the same by at least the amount of the investments made, excluding interest and other financing expenses." Five. Paragraph 1 of Article 77 is modified, which reads as follows:
"1. The autonomous net tax amount will be the result of reducing the autonomous gross tax amount by the sum of:
a) 50 percent of the total amount of the deductions provided for in Article 68 of this Law, with the limits and asset status requirements provided for in its Articles 69 and 70. b) The amount of the deductions established by the Autonomous Community in the exercise of the competencies provided for in Law 22/2009, which regulates the financing system of the Autonomous Communities of the common regime and Cities with Statute of Autonomy." Six. Article 78 is abolished. Seven. Paragraph 4 of Article 96 is modified, which reads as follows:
"4. Taxpayers who have the right to deduction for the savings-enterprise account, for international double taxation, or who make contributions to protected assets of persons with disabilities, pension plans, insured pension plans, or social security mutual funds, corporate social security plans, and dependency insurance that reduce the tax base, under the conditions established by regulation, will be obliged to file a declaration in all cases." Eight. Additional Provision Twenty-Third is modified, which reads as follows:
"Additional Provision Twenty-Third. Consideration of primary residence for the purposes of certain exemptions.
For the purposes provided for in Articles 7.t), 33.4.b), and 38 of this Law, the primary residence will be considered that in which the taxpayer resides for a continuous period of three years. However, it will be understood that the residence had that character when, despite the passage of said period, circumstances that necessarily require a change of residence occur, such as marriage, marital separation, job transfer, obtaining first employment or more advantageous employment, or others analogous. When the residence had been effectively and permanently inhabited by the taxpayer within twelve months, counted from the date of acquisition or completion of works, the three-year period provided for in the previous paragraph will be calculated from this latter date." Nine. A new Transitional Provision Eighteenth is added, which reads as follows:
"Transitional Provision Eighteenth. Deduction for investment in the primary residence.

1. The deduction for investment in the primary residence may be applied under the terms provided for in paragraph 2 of this provision:
   a) Taxpayers who acquired their primary residence before January 1, 2013, or paid amounts before that date for its construction. b) Taxpayers who paid amounts before January 1, 2013, for rehabilitation or expansion works of the primary residence, provided that said works are completed before January 1, 2017. c) Taxpayers who paid amounts for the carrying out of works and installations for the adaptation of the primary residence of persons with disabilities before January 1, 2013, provided that said works or installations are completed before January 1, 2017. In all cases, it will be necessary that the taxpayer had applied the deduction for investment in the primary residence in relation to the amounts paid for the acquisition or construction of said residence in a tax period accrued before January 1, 2013, unless what was provided for in Article 68.1.2ª of this Law in its wording in force on December 31, 2012, had been applicable.
2. The deduction for investment in the primary residence will be applied in accordance with what is provided for in Articles 67.1, 68.1, 70.1, 77.1, and 78 of the Tax Law, in its wording in force on December 31, 2012, without prejudice to the deduction percentages that co