www.pwc.com/eudtg 25 October 2019

EU Direct Newsalert New Spanish rules to prove the of EU pension funds and UCIs

On 19 September 2019, an important amendment - UCIs: the tax residence should be proved though to the Spanish Non-resident Act was one of the following means: (i) certificate issued by published in the Official Gazette. It is key in the the competent authority of the State where the international tax practice since it states new institution is established, the certificate must requirements to prove the tax residency of foreign contain: name; domicile; State of incorporation; EU pension funds and collective investment legal form; and, if applicable, the date of undertakings to get access to the Spanish authorization or its registration number, as well as withholding tax exemptions for interest payments if the institution is managed by an AIFM as per and capital gains. Directive 2011/61/EU. This certificate would have PwC’s EU Direct Tax Group an unlimited validity, unless there were any amendment in the data within the certificate; or (ii) Scope EUDTG is PwC’s pan-European network of Statement from the representative of the EU law experts. We specialise in all areas of Withholding on interest payments, institution or its manager (e.g. AIFM) covering direct tax, including the fundamental free- or capital gains, to: data as: name; domicile; State of incorporation; doms, EU directives and State aid rules. You legal form; and, if applicable, the date of will be only too well aware that EU direct tax (i) Pension funds equivalent to the pension funds authorization or its registration number, as well as law is moving quickly, and it’s difficult to keep under Legislative Royal Decree 1/2002 and if the institution is managed by an AIFM as per up. But, it is crucial that taxpayers with an EU Directive 2016/2341; Directive 2011/61/EU, and including the name and or EEA presence understand the impact as domicile of the depositary agent, following the they explore their activities, opportunities and (ii) Undertakings for Collective Investment in form template to prepared by the Spanish Ministry investment decisions. Find out more on: Transferable Securities (UCITs) regulated under www.pwc.com/eudtg of Finance. This statement would be valid for one Directive 2009/65/EU; and year.

Interested in receiving our free EU tax news? (iii) Undertakings for Collective Investment (UCI) 2. UCIs treated as look-through entities for Spanish Send an e-mail to [email protected] with subject to authorization, registration or supervision “subscription EU Tax News”. tax purposes. In case UCITs and UCIs treated as and managed by AIFM regulated under Directive look-through entities for Spanish tax purposes, the 2011/61/EU. withholding tax exemption would be applicable at the level of their members considering the For more detailed information, please Particularities on the tax residency following criteria: do not hesitate to contact: The new rule differentiates between two potential scenarios: (i) The UCITs or UCIs receiving the income should prove the tax residency of their members through Roberta Poza – PwC Spain 1. Pension funds and UCIs treated as opaque the procedures within Annex I and II of Directive [email protected] entities for Spanish tax purposes: 2011/16/EU;

- Pension funds regulated under Directive (ii) The withholding tax exemption would apply Or your usual PwC EUDTG contact 2016/2341: the tax residence would be proved considering the percentage of participation of the through a certificate issued by the competent UCITs/UCIs' member on 31 December of the body/regulator (i.e. the authority with competent previous fiscal year; to authorize and supervise the pension fund) of the jurisdiction in which the pension fund is located. (iii) The look-through nature and the percentage of The certificate should include: the nature of the participation of each member must be proved pension fund under the aforementioned Directive; through a statement to be issued by the its denomination; its domicile; jurisdiction of representative of the institutions, or its manager, incorporation; date of authorization; and following the template published by the Spanish registration number. Ministry of Finance.

- Other pension funds, equivalent to the Spanish Takeaway pension funds, should prove its tax residency New rules dealing with the residence of foreign through a general statement issued by the pension funds and UCITs/UCIs must be observed representative of the pension fund in the terms of in order to get and ensure the access to the the form to be published by the Spanish Ministry of domestic withholding tax exemption on interest Finance. This general statement would be valid for payments and capital gains. one year. These new rules ensure the compliance with EU - UCITs: the tax residence should be proved by a law, i.e. free movement of capital, in case of certificate issued by the competent authority in the European pension funds, UCITs and UCIs. State of origin. It must contain all the items as the However, the same treatment, i.e. access to the template certificate in Annex II of EU Regulation withholding tax exemption, should be also 584/2010, dated 1 July 2010. available to non-EU pension funds and non-EU UCITs/UCIs as long as they are equivalent to Spanish and EU pension funds and Spanish and EU UCITs/UCIs respectively.

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