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1.
value added tax
RD-Law 20/2012
increases the general and the reduced VAT rates from 18% to 21% and from
8% to 10%, respectively.
Also, a number
of transactions that were previously taxed at the reduced rate are now
taxed at the general rate. These include the sale of flowers and
ornamental plants, certain hotel services, tickets for theatres,
circuses, bullfighting events and other spectacles and attractions,
services provided by artists, funeral services, hairdressing services,
digital television and certain transactions on art objects.
Services
consisting in the renovation and repairing works to housing are subject
to the reduced rate of 10%, provided that the cost of the materials
supplied by the person who carried out the works does not exceed 40% of
the taxable base[1].
The super-reduced
tax rate of 4%, which is applied to essential goods and services, has
not been increased.
In relation to
the sale of houses, buildings or parts of buildings that may be used as
residences, including up to two parking spaces annexed to the dwelling
that are sold at the same time as the dwelling itself, the super-reduced
rate of 4% will continue to apply until 31 December 2012.
RD-Law 20/2012
also increases the tax rates applicable under two of the special regimes
established in the VAT Law: the special regime for agriculture and
fisheries and the so called “régimen especial del recargo de
equivalencia”.
[1] This threshold was set
in 33% previously.
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2. corporate income tax
2.1. Temporary restrictions on the application of carried forward
losses
As a temporary
measure, just for tax periods beginning in 2012 and 2013, taxpayers with
an annual turnover exceeding EUR 6,010,121.04 (calculated according to
article 121 of Law 37/1992) in the twelve months previous to the tax
periods beginning in 2012 or 2013 must apply the following rules:
- CIT taxpayers
with a turnover between EUR 20 million and EUR 60 million during the
twelve previous months: carried forward losses are limited to 50% of
the taxable income.
- CIT taxpayers
which turnover is EUR 60 million or higher during the twelve previous
months: carry-forward losses are limited to 25% of the taxable income.
Therefore, RD-Law
20/2012 toughen the temporary restrictions on the carried forward losses
offsetting which were initially introduced by Royal Decree-Law 9/2011,
which established limits of 75% and 50% of the taxable income,
respectively, to the above referred CIT taxpayers.
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2.2. Payments in advance on account of CIT
As a temporary
measure, just for tax periods beginning in 2012 and 2013, RD-Law 20/2012
increases the payments in advance on account of CIT (which are payable
in April, October and December) with effects as of 15 July 2012.
Specifically:
-
Where the payments in advance are
calculated on the basis of the current taxable income (article 45.3 of
the Corporate Income Tax Law): (i) 25% of tax-exempt foreign dividends
must be included as taxable income, and (ii) the percentages
applicable on the current taxable income to calculate the
payments on account of CIT
are increased as described in the following table:
Net turnover in the 12 months prior
to the start of the tax period |
Fraction of the tax rate to determine
the percentage applicable on the taxable basis |
Less than EUR 10,000,000 |
5/7 (i.e., 21% when applied to the
general rate) |
EUR 10,000,000 - EUR 19,999,999 |
15/20 (i.e., 23% when applied to the
general rate) |
EUR 20,000,000 - EUR 59,999,999 |
17/20 (i.e., 26% when applied to the
general rate) |
EUR 60,000,000 or more |
19/20 (i.e., 29% when applied to the
general rate) |
- The minimum
payment in advance on account of CIT for those taxpayers whose
turnover in the 12 months prior to the start of tax periods beginning
in 2012 or 2013 is EUR 20 million or more is increased. In April,
October and December, they must pay in advance on account of CIT at
least an amount equal to 12% (previously this percentage was 8%) of
their accounting income accrued during the first three, nine or eleven
months of the relevant calendar year. Only previous payments in
advance on account of CIT may be deducted from this minimum payments
(RD-Law 20/2012 eliminates the possibility to take into account
carried forward losses pending to offset). The percentage to calculate
this minimum payment in advance is halved to 6% if at least 85% of the
accounting income in the first three, nine or eleven months of each
calendar year derives from subsidiaries or permanent establishments
and takes the form of: (i) dividends and capital gains from the sale
of shares in non-resident companies that are entitled to apply the
exemption set out in article 21 of the CIT Law; (ii) income obtained
through a permanent establishment entitled to apply the exemption set
out in article 22 of the CIT Law; and (iii) dividends or a share in
the profits of companies resident in Spain to which the 100% tax
credit set out in article 30.2 of the CIT Law applies.
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2.3. General restriction on the deduction of financial expenses
Royal Decree-Law
12/2012, which introduced several tax and administrative measures to
reduce the public deficit (“RD-Law 12/2012”),
replaced the thin capitalisation rule with a general restriction on the
deduction of financing expenses. As a result, net financing expenses
exceeding 30% of the operating profit in a given tax year will not be
deductible for CIT purposes when they exceed EUR 1 million. RD-Law
12/2012 established that the general restriction on the deduction of
financing expenses did not apply to entities that do not belong to a
group of companies (as defined in article 42 of the Commercial Code) and
to financial entities. According to RD-Law 20/2012, only credit entities
and insurance companies are excluded from the general restriction on the
deduction of financing expenses.
In addition, RD-Law
20/2012 clarifies that for CIT taxpayers with a tax period of less than
a year, the threshold on their unlimited deductible financial expenses
will be the result of multiplying EUR 1 million by the proportion that
their tax period represents of the calendar year.
Lastly, the
general restriction on the deduction of financing expenses will not
apply when an entity is dissolved and does not transfer the right to
deduct financial expenses to another entity.
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2.4. Depreciation of intangible assets with an indefinite useful
life
As a temporary
measure, just for tax periods beginning in 2012 and 2013, RD-Law 20/2012
limits the tax deduction for the annual maximum depreciation of
intangible assets with an indefinite useful life to 2% of their value (previously
it was 10%).
2.5.
Special tax on dividends and income deriving from the sale of shares in
non-resident companies
RD-Law 12/2012
had established a new and temporary special tax to ease the repatriation
of income. In particular, this special 8% tax applies on dividends and
capital gains derived from the sale of shares in non-resident companies
provided that (i) the relevant income is accrued before 30 November
2012; (ii) the direct or indirect shareholding in the relevant non-resident
company is 5% or higher, and (iii) certain other requirements are met.
Now, RD-Law 20/2012 introduces a new special tax of 10% applicable when
these other requirements are not met.
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3. personal income tax
3.1. Tax deduction for investment in the taxpayer’s permanent
residence
The additional
tax credit applicable to taxpayers who acquired a dwelling before 20
January 2006 is eliminated.
3.2. Withholding rates on certain items of income
RD-Law 20/2012
increases 15% to 19% the withholding rate applicable to income from
professional activities and income obtained from giving courses,
conferences, seminars or similar teaching events, or income obtained
from the performance of literary, art or scientific works.
However, with
temporary effects from 1 September 2012 to 31 December 2013, will
transitorily be 21%.
3.3. Other measures
RD-Law 20/2012
lays down that, during the tax periods initiated in 2012 or 2013, the
CIT limits on the annual goodwill depreciation and the annual
depreciation of intangible assets with an indefinite useful life will
not be applicable to personal income taxpayers whose turnover is less
than EUR 10 million.
16 July 2012
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