spain financial transaction tax

This affects 34 of the 35 companies listed in the Spanish stock exchange index IBEX. Since Pedro Sanchez first became Spain’s Prime Minister in 2018 and, now, in conjunction with the left-wing coalition party, Unidas Podemos, he has been working to overhaul the Spanish tax system. The two major taxes that Spain is planning to implement during the next few months have the potential to negatively impact capital formation, growth, and economic recovery in Spain and start a harmful trade war. When acquisitions are executed in a trading center or within the activity of a systematic internalizer, at the settlement of the transaction. ii. On 23 October 2018, the draft Bill proposal (the Draft) establishing the Financial Transaction Tax (FTT) was published. When acquisitions are made outside a trading center or the activity of a systematic internalizer, at the time when the securities are registered in favor of the acquirer. See Terms of Use for more information. The KPMG logo and name are trademarks of KPMG International. The tax will be payable regardless of whether or not the acquisitions in question take place on a regulated market or on any other market, multilateral trading facility or organised trading facilities, or by means of a systematic internaliser or direct agreements between the parties outside a trading venue. Derived from the application of resolution measures adopted by the Single Resolution Board or by the competent national resolution authorities. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Rather, a reference is made to the general penalty regime of the Spanish General Tax Law. You will not receive KPMG subscription messages until you agree to the new policy. {{vm.newUser4}}. How should companies face a tax audit or tax inspection in Spain? Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Would you consider contributing to our work? In the first week of June, the left-leaning government won a similar vote on the digital services tax, defeating opposition parties concerned about the bill’s unilateral character, the timing of its introduction given the pandemic and economic downturn, and the impact U.S. trade sanctions could have on key Spanish industries. The accrual of the proposed Spanish FTT depends on the place where the acquisition takes place: It will be assumed, until proof to the contrary, that executed purchase orders have been settled. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. The Spanish FTT bill will move to the Lower House Budget Commission, where it will face partial amendments. The Spanish tax authorities will publish before 31 December of each year the list of Spanish companies with market capitalization exceeding €1,000 million as of 1 December of that year. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. 1. The Bill was approved at the council of ministers meeting of February 18, 2020. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. As reported in EY Global Tax Alert, Spain issues draft bill on Financial Transaction Tax, dated 25 October 2018, the Draft Also, the proposed Spanish FTT is now similar to the French FTT model. The issue is currently at a standstill in Council, though the state of this matter has been regularly discussed at the ECOFIN. Please refer to the privacy notice/policy on these sites for more information. Additionally, the burden of the FTT would fall on small investors and families at a time when saving rates in Spain are at an all-time low and when Spain needs tax relief in the face of the economic shock delivered by the COVID-19 pandemic. ii. vi. Click anywhere on the bar, to resend verification email. Specifically, acquisitions made exclusively for the issuance of depositary receipts will not be subject to the tax. iv. For instance, it is clarified that the FTT taxpayer is the acquirer of the Spanish shares and that the financial entity is only acting as a substitute when acting on behalf of the acquirer of shares (the financial entity would be the taxable person), meaning that the tax could be charged back to the clients. Depending on the type of application, the following must be identified: the issue or IPO, the entity acting as the liquidity supplier, the group of companies, the entities involved in the financing or title transfer collateral transaction, etc. This message will not be visible when page is activated. The name refers to James Tobin, a US economist and Nobel Prize winner, who in the 1970s proposed that all international financial transactions be subject to a tax. The levies are intended to adapt the tax system to the new economic reality. The following acquisitions relating to the primary market: ➤ those arising from the issuance of shares and depositary receipts; ➤ acquisitions arising from public offerings of sale (IPOs); ➤ instrumental acquisitions made prior to those included in the previous two points by the bookrunners and underwriters engaged by the issuers or offerers to perform the final distribution of these shares among the ultimate investors, as well as acquisitions in compliance with their obligations as bookrunners and, in particular, as underwriters, as the case may be, of these transactions; and. Nevertheless, the FTT’s adverse effects on the capital market may end up costing more than its collection. {{ vm.siteSelectorList.flyout.cell1.heading }}, {{ }}, {{ vm.flyout.cell1.viewAll.newTabAllow }}, Transactions performed by entities forming part of the same group of companies within the terms of Article 42 of the Spanish Commercial Code, Acquisitions qualifying for the special regime available for mergers, spinoffs, contributions of assets or exchanges of securities, as well as acquisitions arising as a result of mergers or spinoffs of collective investment undertakings or compartments or sub-funds thereof, Other acquisitions specifically included in the draft legislation, and viewed as necessary for proper functioning of the markets. DTTL and each of its member firms are legally separate and independent entities. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The Tax Foundation is the nation’s leading independent tax policy nonprofit. However, certain special rules are established in those cases in which the acquisition of the securities derives from the execution or settlement of convertible/ exchangeable bonds or obligations, of derivative financial instruments, or of any instrument or financial agreement, where the conditions that are set forth in said instruments or agreements in relation to the delivery of the securities should be taken into account. GM Tax Consultancy will advise you with total professionalism and proximity. When the acquisition arises from the execution or settlement of options or other derivative financial instruments that confer a right to acquire or transfer the taxable securities, the tax base will be the exercise price established in the contract. Spain and Italy today added their support to calls for a tax on financial transactions. According to current estimates, the state expects this new tax to generate additional income of 420 to 850 million euros annually. The Spanish FTT will be assessed monthly and tax due may not be deferred or paid by installments. If the Spanish shares are not acquired by an investment services company or credit institution on its own behalf, the tax will be assessed by the following persons, depending on where the transaction is carried out, also as FTT taxable persons but in this case as substitutes of the taxpayers: If several financial intermediaries are involved in executing a security purchase order, the tax shall be assessed and paid by the firm that received the purchase order directly from the end buyer. The Bill also provides that taxpayers will be required to request a taxpayer identification number from the tax authorities and to notify and substantiate it in such situations as may be established. Would you consider telling us more about how we can do better? {{vm.newUser2}} ii. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.

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