Strategizing Multinational Tax Risks

Spain’s tax law changes have been published, effective as of October 2015.

Click to access 2015G_CM5807_Spain%20amends%20its%20General%20Tax%20Law.pdf

Key observations:

• The Law introduces a new penalty for a specific anti-abuse provision in cases for application of GAAR.
• The statute of limitations period of CIT years in which an entity has generated losses and tax credits has been extended from 4 years to 10 years. The Law now extends this provision to all other taxes.
• Duration of an audit has been extended from 12 to 18, or 27, months.
• A Statute of Limitations period of 10 years has been established for EU State Aid cases.

As new penalties are being legislated, in Spain and elsewhere, for subjective provisions in the tax law it is becoming mandatory to assess such provisions in the tax planning stages for significant transactions.  This is especially true when the subjective interpretations of GAAR, and the tax authorities, are inherently uncertain and potentially leading to double taxation.