APA & MAP Country Guide 2019 - Spain
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SUBHEADING LORUM IPSUM
APA & MAP
CountryBooklet Title – Spain
Guide 2019
Lorum Ipsum
CONNECTING THE DOTS OF INTERNATIONAL TAX CONTROVERSY
EMODIO TENTIAT. NEQUO OCCATECTIA
APA & MAP COUNTRY GUIDE 2019
Spain
APA Program
KEY FEATURES
Competent authority Spanish Tax Agency
Relevant provisions Article 18(9) of the Corporate Income Tax Law
Types of APAs available Unilateral, bilateral, and multilateral APAs are available.
Acceptance criteria Both resident and non-resident Taxpayers may
submit APA applications with proposals regarding the
valuation of future related transactions carried out by
individuals and associated entities.
Applications from non-resident individuals and legal
entities are required to be or plan to be carrying out
business transactions in Spain through either:
• a PE located in Spain; or
• a resident legal entity.
Key timing requests, There is no specific guidance on timing for Taxpayers;
deadlines however, the Spanish Tax Agency has a statutory
six-month period to complete an APA application.
APA term limits There is a four-year maximum term for an APA,
calculated from the date the agreement is reached.
Additionally, the APA may also be applicable for
previous periods, so long as these are not statute-
barred and there is not a final assessment in place.
Filing fee There is no filing fee.
2SPAIN
Rollback availability Rollback is available provided there is not a final
settlement of the transaction(s).
Collateral issues No specific guidance.
PRE-FILING REQUIREMENTS
Overview Taxpayers are allowed to submit a preliminary
application with information including:
• identification of the parties;
• a brief description of the transaction(s) covered; and
• the basic elements of the intended pricing
proposal.
Anonymous pre-filing Anonymous pre-filing is not available.
availability
APPLICATION REQUIREMENTS
Content of application The APA application must contain:
• an arm's length pricing proposal, including a
description of the TP method and the analysis
followed to determine the market value;
• a confirmation that the related-parties know and
accept the pricing proposal; and
• transfer pricing documentation that complies with
Spanish regulations, as relevant to the APA.
Language The documentation should be submitted in Spanish.
Translations may be requested for non-Spanish
language submissions.
SME provisions No specific guidance.
3APA & MAP COUNTRY GUIDE 2019
OTHER PROCEDURAL CONSIDERATIONS
General The Spanish Tax Agency follows a standard pre-filing,
application and monitoring process. There are no
unique procedural aspects.
Monitoring & compliance The Taxpayer is required to report any significant
changes in the circumstances on which the APA is
based. Taxpayers must annually file together with
their tax return a statement describing:
• related party transaction(s) carried out during the
fiscal year applying the APA;
• prices agreed in the related party transaction(s);
• description of variations on the economic
circumstances, if any;
• similar transactions to those described in the APA,
prices and description of the differences between
them; and
• other information as required by the Spanish Tax
Agency.
Renewal procedure An APA may be renewed through application of an
extension six months before expiry of the existing APA.
4SPAIN
MAP Program
KEY FEATURES
Competent authority Spanish Tax Agency, for procedures related to transfer
pricing and attribution of profits to PEs; and
General Directorate for Taxation, for all other cases.
Relevant provisions Regulation on the Mutual Agreement Procedures
Concerning Direct Taxation, approved by Royal Decree
1794/2008, of November 3, 2008, and amended by
Royal Decree 1558/2012, of November 15, 2012;
• Royal Decree 634/2015, of July 10, 2015; and
• Royal Decree 1021/2015, of November 13, 2015.
Acceptance criteria Taxpayers may request MAP if taxation has or is likely
to occur that is not in accordance with the provisions
of a DTT to which Spain is signatory. The Spanish
regulations also provide that MAP requests may be
refused in the following circumstances:
• when there is no applicable DTT with an article
related to the MAP;
• when the application has been submitted
outside the term established in the agreement or
presented by a taxpayer without standing;
• when initiating a MAP is inappropriate as it is a
matter of domestic law and not a divergence or
discrepancy in the application of a DTT;
• when there is evidence that the actions of the
Taxpayer were intended to avoid taxes in one of the
relevant jurisdictions;
5APA & MAP COUNTRY GUIDE 2019
• when the request refers to the opening of a new
procedure on an issue that has already been
subject to another MAP raised previously by
the same Taxpayer and on which an agreement
between both tax authorities had been reached or
on which the Taxpayer had desisted; and
• when the request for correction has been
answered within the deadline but the responses
are not completed.
Key timing requests, If requested under a Spanish DTT, Taxpayers must
deadlines make a MAP request before the deadline stipulated
established under the relevant DTT, from the date of
the notification which leads or may lead to double
taxation. If requested under the EU Arbitration
Convention (90/436/EEC), Taxpayers have three years
to present a case to the tax authorities.
APPLICATION REQUIREMENTS
Content of application The MAP request must be made in the form of a letter
addressed to the Spanish Tax Agency or the General
Directorate for Taxation, and contain the following
information/documentation:
• full name, address and tax identification number
of the Taxpayer presenting the request, and the
other parties involved in the transactions under
consideration;
• identification of the relevant foreign tax authority;
• the article of the DTT that the Taxpayer considers has
not been applied correctly and the interpretation
that the Taxpayer gives to that article;
• identification of the affected tax or settlement
periods;
6SPAIN
(cont.) • detailed description of the facts and relevant
circumstances related to the case, including
the amounts in question, as well as the data
corresponding to the relationships, situations
or structure of operations between the people
affected;
• identification of administrative or judicial appeals
lodged by the applicant or by the other parties
involved, as well as any resolution that would have
fallen on the same question;
• indication of whether the Taxpayer has previously
filed a request before any of the tax authorities
involved on the same or a similar issue;
• declaration stating whether the request includes
any question that may be considered to be part of
an APA or of some similar procedure;
• commitment on the part of the Taxpayer
requesting the MAP to readily respond to all
requests made by the Spanish Tax Agency in order
to negotiate the MAP;
• date and signature of the person requesting the
MAP, or their representative;
• relevant transfer pricing documentation;
• copies of the settlement, its notification and the
reports issued by the tax authorities;
• copies of the resolutions issued by the relevant
foreign jurisdictions that affect the procedure; and
• power of attorney, in cases where the Taxpayer acts
through an external representative.
Language The documentation should be submitted in Spanish.
7APA & MAP COUNTRY GUIDE 2019
OTHER PROCEDURAL CONSIDERATIONS
Interaction with domestic In cases where the Taxpayer initiates a MAP and
proceedings domestic proceedings simultaneously, the latter
will be suspended until the MAP negotiations are
concluded.
Arbitration As Spain is a member of the EU, Taxpayers may initiate
the arbitration procedure under the Tax Dispute
Resolution Mechanism Directive on October 10, 2017.
The Directive is applicable to matters submitted
after July 1, 2019, on issues related to the tax year
starting on or after January 1, 2018. The EU Arbitration
Convention also imposes a binding obligation on EU
member states to eliminate double taxation under
DTTs including, if necessary, by reference to the
opinion of an independent advisory body.
STATISTICS
APA There were 54 APA application requests in 2016 and
53 active APAs. The Spanish Tax Agency has had an
APA program since 1995.
MAP Spain had a total of 275 active MAP applications as of
December 31, 2017. The average time needed to close
MAP cases is 43 months for transfer pricing cases, and
37 months for other cases.
8SPAIN
Double Taxation Treaty Network
The following treaties include MAP provisions which are the basis for bilateral and
multilateral APA negotiations:
Albania Croatia Iran Nigeria(IV) Sweden
Algeria Cuba Ireland Norway Switzerland(I)
Andorra(IV) Cyprus(IV) Israel Oman(IV) Syria(V)
Argentina(IV) Czech Republic Italy Pakistan Tajikistan(II)
Armenia Denmark Jamaica Panama Thailand
Australia Dominican Japan Peru(V) Trinidad and
Austria Republic(IV) Kazakhstan Philippines Tobago
Azerbaijan(V) East Timor Kuwait Poland Tunisia
Bahrein(V) Ecuador Kyrgyzstan(II) Portugal(VI) Turkey
Barbados Egypt Latvia Qatar(IV) Turkmenistan(II)
Belarus(II)(V) El Salvador Lithuania Romania Ukraine(II)(V)
Belgium Estonia Luxemburg Russia United Arab
Bolivia Finland Macedonia Saudi Arabia Emirates
Bosnia France Malaysia Senegal(IV) United
Brazil Georgia Malta Serbia Kingdom(I)
Bulgaria Germany Mexico Singapore United States
Canada Greece Moldova Slovak Uruguay
Cape Verde(V) Hong Kong Montenegro(V) Republic Uzbekistan(IV)
Chile Hungary Morocco Slovenia Venezuela
China Iceland Namibia(V) South Africa Vietnam
Colombia India Netherlands Southern
Costa Rica Indonesia New Zealand Korea
Notes
i. denotes treaties with MAP arbitration provisions. (I* denotes treaties to which MAP arbitration
provisions under the MLI apply)
ii. denotes treaties with the USSR that remain applicable until a separate tax treaty is concluded.
iii. denotes treaties between the countries’ representative office in Taipei and the Taipei Economic
and Cultural Office in the relevant country.
iv. denotes treaties that became effective within the last five years.
v. denotes treaties that are awaiting ratification.
vi. denotes MAP provisions identical to para 3, art 25 of the OECD Model Convention with respect to
Taxes on Income and on Capital.
vii. arbitration is to be conducted under the statutes of the ECJ.
viii. arbitration is to be conducted under the statutes of the ICJ.
9DLA Piper is a global law firm operating through various separate and distinct legal entities. Further details of these entities can be found at www.dlapiper.com. This publication is intended as a general overview and discussion of the subjects dealt with, and does not create a lawyer-client relationship. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper will accept no responsibility for any actions taken or not taken on the basis of this publication. This may qualify as “Lawyer Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Copyright © 2019 DLA Piper. All rights reserved. | APR19 | A00091
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