Apa & Map Country Guide 2017 Spain

APA & MAP COUNTRY GUIDE 2017 SPAIN Managing uncertainty in the new tax environment SPAIN

KEY FEATURES Competent Spanish Tax Agency authority APA provisions/ Article 18(9) of the Corporate Income Tax Law guidance Types of APAs Unilateral, bilateral, and multilateral APAs are available. available APA acceptance Both resident and non-resident entities may submit APA criteria applications with proposals regarding:

■ valuation of future transactions between individuals and associated entities; and/or

■ deduction of expenses incurred for support and management services. 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 There is no specific guidance on timing for Taxpayers, however requests, the Spanish Tax Agency has a statutory six month period to deadlines resolve an APA application. APA term limits There is a four year maximum term for an APA. Filing fee There is no filing fee. Rollback Rollback is available provided there is not a final settlement of availability the transaction(s). Collateral issues No specific guidance. PRE-FILING REQUIREMENTS Overview Applicants are required to submit a preliminary application containing:

■ identification of the parties;

■ a brief description of the transaction(s) covered; and

02 | APA & MAP Country Guide 2017 – Spain SPAIN (cont’d)

■ the basic elements of the intended pricing proposal, including a demonstration of consistency with the arm’s length principle, a description of the TP method, and analysis followed to determine the market value. Anonymous pre-filing Anonymous pre-filing is not available. availability APPLICATION REQUIREMENTS Content of APA The APA application must contain the documentation submitted application in the preliminary application, as well as additional information that may be requested by the STA from the Taxpayer. Language The documentation should be submitted in Spanish. Translations may be requested for non-Spanish language submissions. SME provisions No specific guidance OTHER PROCEDURAL CONSIDERATIONS General The Spanish Tax Agency follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects. Monitoring & The Taxpayer is required to report any significant changes compliance 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 An APA may be renewed through application of an extension procedure application six months before expiry of the existing APA.

www.dlapiper.com | 03 SPAIN (cont’d)

COUNTRY EXPERIENCE Statistics There were 37 APA application requests in 2015 and 16 completed applications. The Spanish Tax Agency has had an APA program since 1995. MAP PROCEDURE MAP provisions Regulation on the Mutual Agreement Procedures Concerning Direct Taxation, approved by Royal Decree 1794/2008, of 3 November 2008, and amended by Royal Decree 1558/2012, of 15 November; Royal Decree 634/2015, of 10 July 2015; and Royal Decree 1021/2015, of 13 November.

DOUBLE TAXATION TREATY NETWORK

The following treaties include MAP provisions which are the basis for bilateral and multilateral APA negotiations: Albania Denmark Algeria Dominican Republic(IV) Andorra(IV) East Timor Argentina Ecuador Armenia(IV) Egypt Australia El Salvador Austria Estonia Azerbaijan(IV) Finland(IV) Barbados France Belarus(II) Georgia Belgium Germany Bolivia Greece Bosnia Hong Kong(IV) Brazil Hungary Bulgaria Iceland Canada India Chile(IV) Indonesia China Iran Colombia Ireland Costa Rica Israel Croatia Italy Cuba Jamaica Cyprus Japan Czech Republic Kazakhstan

04 | APA & MAP Country Guide 2017 – Spain SPAIN (cont’d)

DOUBLE TAXATION TREATY NETWORK (cont’d)

Korea Russia Kuwait(IV) Saudi Arabia Kyrgyzstan(II) Senegal(IV) Latvia Serbia Lithuania Singapore(IV) Luxemburg Slovak Republic Macedonia Slovenia Malaysia South Africa Malta Sweden Mexico Switzerland(I) Moldova Tajikistan(II) Morocco Thailand Netherlands(IV) Trinidad and Tobago New Zealand Tunisia Nigeria(IV) Turkey Norway Turkmenistan(II) Oman(IV) Ukraine(II) Pakistan United Arab Emirates Panama United Kingdom(I), (IV) Peru United States Philippines Uruguay Poland Uzbekistan(II), (IV) Portugal(VI) Venezuela Romania(IV) Vietnam

NOTES I denotes treaties with MAP arbitration provisions. 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.

www.dlapiper.com | 05 DLA PIPER CONTACTS

Joel Cooper Randall Fox Co-Head International Co-Head International Transfer Pricing Transfer Pricing T +44 207 796 6929 T +44 207 796 6928 M +44 773 829 5470 M +44 773 8295 935 [email protected] [email protected]

SPAIN

Carlos Rodriguez Partner T +34 91 788 7369 [email protected]

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