Almost three years after the approval of the Council Directive (EU) 2018/822, regarding the mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, in April 2021 the transposition process of the so-called ‘DAC6’ was finally completed in Spain.
While the wording of the transposition rules introduces little deviation from the previous drafts, various and relevant uncertainties posed by this new reporting obligation remain unsolved in the regulations approved.
Spanish DAC6 transposition rules have been enacted by way of Law 10/2020 of December 29 2020, which regulates the basic features of this new reporting obligation and establishes the applicable penalties in case of default.
In particular, Law 10/2020 defines the scope of the legal professional privilege, which is intended to cover, exclusively, the so-called ‘neutral advice’ (i.e. that rendered for the mere purposes of evaluating the adequacy of an arrangement to the rules in force and the legal implications deriving from it). The thin line between the ‘neutral advice’ and the ‘participative advice’ (including the ‘neutral implementation’) will most likely become a grey area in practice.
It is important to highlight that the Spanish transposition rule has stretched the personal scope of this legal professional privilege to every intermediary and not only to lawyers themselves.
With regard to infringements of the obligation to report, Law 10/2020 regulates a specific penalty regime with fines oscillating from a minimum of €4,000 (approximately $4,889) to a maximum of €16,000 euros per transaction.
Apart from these economic penalties, the reputational damage might also be considered, particularly when talking about such a sensitive area as it is the ‘aggressive tax planning’ and especially in view of the increasing importance for entities to comply with so-called corporate social responsibility obligations.
In addition, the DAC6 reporting obligation could be scrutinised within the framework of general tax audit procedures or further stages, where transparency and collaboration are also measured by the degree of compliance with tax reporting obligations.
The provisions of Law 10/2020 are further developed by Royal Decree 243/2021, of April 6 2021, which regulates the remaining details and aspects of the reporting obligation (among others: the requirements to be fulfilled by cross-border arrangements, the role of intermediaries with whom the main reporting obligation lies, the information making up the mandatory content of the report).
It also contains the rules regarding the triggering of the reporting obligation and the timeframe for communicating the information. As regards to hallmarks, Royal Decree 243/2021 refers to the Annex IV of the Directive with certain specifications.
As opposed to other member states, the Spanish tax authorities have not yet published a detailed guidance on the interpretation of the applicable provisions or hallmarks. However, the tax authorities have published certain ‘technical’ instructions on the fulfillment of the relevant reporting forms that shall be used for communicating the reportable cross-border arrangements (Form 234), updating the information on marketable cross-border arrangements (Form 235) and reporting the use in Spain of cross-border arrangements that had been previously reported (Form 236).
DAC6 reporting obligations are effective in Spain as of April 14 2021, when the approval of the official reporting forms triggered the 30-day period to communicate all the reportable arrangements, both corresponding to the so-called transitional periods (i.e. those whose first step was implemented between June 25 2018 and April 13 2021) and to any new arrangement as from April 14 2021.
Going forwards, economic and legal operators will face the challenge of complying with this newly born reporting obligation, which at this stage is raising significant uncertainties for both intermediaries and taxpayers.
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