The tax liability would be calculated and settled by means of a monthly self-assessment. The Tax Foundation works hard to provide insightful tax policy analysis. Therefore, changes could be made to the pending legislation before its final approval and publication. Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps. 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.

More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. How should companies face a tax audit or tax inspection in Spain? Also, the proposed Spanish FTT is now similar to the French FTT model. 1. Where the consideration amount is not expressed, the tax base is the closing value that the security had in the most relevant market in terms of liquidity of the relevant security on the day preceding the transaction. Please see www.deloitte.com/about to learn more about our global network of member firms. As a special rule, in the event that the amount of the consideration is not stated, the tax base will be determined in accordance with a specific market value rule and will thus be the corresponding value at the closing of the most relevant market by liquidity of the security in question on the last day of trading prior to the transaction date. Privacy  |  The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. 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. Read text of the legislative proposal (Spanish) [PDF 170 KB]. Global Code of Conduct The proposed tax would not affect the primary market and thus would not have implications for companies that are listed on the stock exchange for the first time. As indicated in the preamble to the Bill, since 2013, Spain has participated in the enhanced cooperation procedure to adopt a Directive on the uniform implementation of a Financial Transaction Tax (“FTT”) with a group of European Union countries that includes Germany, France, Austria, Belgium, Slovakia, Slovenia, Greece, Italy and Portugal. Therefore, this rule should not apply to transactions relating to the purchase and sale of the same security in the same trading session when those transactions have been ordered from different financial intermediaries. The structure of the draft legislation is substantially unchanged with respect to the text submitted to the Spanish Parliament in January 2019 (when the relevant parliamentary process was put on hold because of the call for an early general election and then the dissolution of parliament). No specific penalty regime has been included. The filing of returns and the payment of tax debt through this procedure will not give rise to any specific tax liability for the central securities depository in this connection. On 23 October 2018, the draft Bill proposal (the Draft) establishing the Financial Transaction Tax (FTT) was published. It has been published in the Official State Gazette of 16th of October 2020, the law 5/2020 from the 15th of October, on the Tax on Financial Transactions whose entry into force will be published three months after publication in the Official State Gazette. Explore our weekly European tax maps to see how countries rank on tax rates, structure, and more. GM Tax Consultancy will advise you with total professionalism and proximity.

Spain has approved a new Financial Transaction Tax, which will come into force on 16 January 2021. The tax rate and exemptions could be amended by the general state budget law.

However, the Bill envisages that the regulations may allow taxpayers to file the tax return and pay the tax due through a central securities depository in charge of keeping the accounting records of the acquired securities, who will file the return for and on behalf of each taxpayer and make the payment to the Public Treasury. "EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. 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. Agree. Spain and Italy today added their support to calls for a tax on financial transactions. Spain’s upper house passed two major tax bills today: the financial transaction tax (FTT) and the digital service tax (DST).. It would not be a "bank levy" on banking business and bank deposits, or a tax levied on the gross margins, profits or remuneration of banking activity. Spain should focus on economic stability and work to avoid disputes that could undermine recovery efforts. © 2020. Its cost will be borne by small investors and families who cannot find alternative trading routes. ii. The Spanish FTT bill will move to the Lower House Budget Commission, where it will face partial amendments. This message will not be visible when page is activated. The tax must be paid by the financial service provider who carries out the transaction. According to the Bill, the main characteristics of the Spanish FTT are the following: The taxable event is the acquisition of Spanish companies with market capitalization over €1,000 million, the shares of which are admitted to trading on the Spanish market, or on the regulated market of another EU Member State, or on an equivalent third-country market.3.

Although the political prospects for adoption in the near future are uncertain and both taxes might not go into effect until 2021, the current economic challenges could be prolonged if the policies make it more difficult for Spain to return to growth. i.

Notwithstanding this approach, the Spanish tax will have to be adapted, where appropriate, to the FTT when it is finally approved under the Directive. viii. Jacquou Martin 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 draft legislation also includes measures for an optional mechanism for filing returns and paying the tax debt via a central securities depository located in Spain or in other countries (including non-EU Member States) pursuant to collaboration agreements. We work hard to make our analysis as useful as possible. If finally approved, the Spanish FTT will enter into force three months following the publication of the Law in the Spanish Official State Gazette (BOE). iii. As reported in EY Global Tax Alert, Spain issues draft bill on Financial Transaction Tax, dated 25 October 2018, the Draft establishing the FTT was published. However, it would be the taxable person (in the place of the taxpayer) that would have to settle and pay the tax to the Treasury. Background. The FTT would also be levied on the acquisition of securities that corresponds to depositary receipts representing qualifying shares and on the acquisition of securities from the execution or settlement of convertible or exchangeable notes or bonds, financial derivatives, and financial instruments or agreements. We provide a summary below of the main aspects of the Bill, although the text could be subject to changes during parliament procedure. Innovation is more than just a buzzword used by all. {{vm.newUser3}} This new tax is not an invention of the government or eccentricity. All rights reserved. In these cases, the taxable person is entitled to claim back/charge from/to the taxpayer (i.e., the actual acquirer of the Spanish shares) the amount of Spanish FTT due.

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.

If the transaction is performed in a trading venue, Spanish FTT will be assessed by the market member.

Transactions generally required to comply with the functions of the entities that manage posttrading infrastructures. the company's market capitalisation must exceed EUR 1,000 million at 1 December of the year prior to the acquisition. Tax Advisors Barcelona © 2020 GM TAX CONSULTANCY, S.L. ➤ Covering positions resulting from the execution of the activities referred to in the above two paragraphs. Help us achieve a world where the tax code doesn't stand in the way of success. 2. 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. In the case of acquisitions made on a trading venue, the tax accrues when the acquisition is executed. Lastly, a special system for calculating the tax base for intraday transactions has been established, whereby the ownership of the securities at the end of the day is altered only by the net number of securities purchased and sold in the same trading session or on the corresponding market. The Tax Foundation is the nation’s leading independent tax policy nonprofit. Deloitte tax@hand - information and insights from Deloitte’s tax specialists, globally. The following persons will be considered taxable persons (subject to FTT compliance), irrespective of the place where they are established: i. No specific tax form has been proposed yet – this will be regulated later on. {{vm.newUser4}}. Insert CSS fragment. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006. ii. vii.

We want to make sure you're kept up to date. The issue is currently at a standstill in Council, though the state of this matter has been regularly discussed at the ECOFIN. Please enable JavaScript to view the site.

Unless proven otherwise, the acquisitions that are performed will be presumed to have been settled. This Bill has been sent to the Spanish Congress and Senate to be voted on. ii. This rule likewise cannot apply to purchase and sale transactions performed on the same date when settlement takes place on different dates. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. ii. In this situation, the taxable person (sujeto pasivo) would not be the transferor or the acquirer of the shares, but the financial intermediary conveying or executing the acquisition order (i.e., investment services companies or credit institutions performing acquisitions for their own accounts). As reported in EY Global Tax Alert, Spain issues draft bill on Financial Transaction Tax, dated 25 October 2018, the Draft establishing the FTT was published. The taxpayer and the acquirer will be required to keep the supporting documents evidencing the content of the notification and the fact that it was furnished to the tax authorities if necessary. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes.



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