Tax Annual Report
Taxing times
Under a rain of reforms,
Iberia’s tax frameworks
are an ongoing ‘work-inprogress’. Their respective
governments have been
on a drive to attract foreign
investment and increase each
country’s competitiveness.
While some measures have
been very welcomed, others
are creating even more legal
uncertainty. And 2014 looks set
to be another challenging year,
say lawyers.
our industries, and a capacity for IP and
exports.”
Reforming the system
2013’s measures, while good news
for Spain’s tax collectors, have been
disadvantageous for domestic companies,
say lawyers, especially those with an
international presence. One of the most
significant examples being the abolition
of article 12.3 of the Corporate Income
Tax (CIT) Law, by which the depreciation
of participation in other companies has
become non-deductible.
This has a negative effect, as it slows
down the internationalisation of Spanish
companies in return for short-term
tax gains, according to Miguel Angel
Albaladejo Torres, Tax Partner at Lener.
But there have been some positive
measures. The ‘patent box’ rules have been
enhanced increasing CIT relief from 50 to
It has been all change across Iberia’s tax
60 percent on profits earned from the lease
scene. 2013 was not shy of reforms, and
or assignment of intangible assets, the
lawyers foresee many more in 2014.
limit on the amount on which it could be
Over the past two years, the Spanish
Government continued its drive to increase applied has been removed, and it will also
apply to net income. This enhancement
gross domestic product and reduce
should be a good incentive for this type of
public deficit. And tax collection was their
investment, agree lawyers.
weapon of choice.
The tax credit for research and
But while many of the measures they
development (R&D) activities has also been
introduce were designed to be shortimproved by eliminating the limit on the
term and one-off, they have recently
amount of gross tax payable against which
been extended to 2014 and 2015. “If we
it can be applied, explains Daniel Riopérez,
are honest, these are likely to become an
increasingly hot topic as the election dates Head of Tax at Osborne Clarke, Madrid, on
the condition that a 20 percent discount is
draw closer,” says Isidro del Saz, Tax
deducted from the amount.
Partner at Roca Junyent. But as advisers
In VAT, the new ‘special cash regime’
it is becoming increasingly difficult to
has been approved, but it will probably
provide advice in such an unstable legal
have a reduced impact if it is not modified,
environment, explains Luis Rodríguezexplains Ramón-María Parcerisa Bundó,
Ramos, Tax Partner at Ramón y Cajal
Head of Tax at Pintó Ruiz & Del Valle.
Abogados, and almost impossible to
The new regime allows taxpayers with a
provide advice on a long-term basis.
turnover of less than €2m to pay output
Enhancing the country’s
competitiveness was top of the Portuguese VAT when they collect the money from the
Government’s agenda this past year. “And client. At the same time, the client will be
only able to deduct the input VAT when the
the country’s tax system is very appealing
payment to the supplier is made. Lawyers,
nowadays,” says Tiago Caiado Guerreiro,
however, are waiting to see whether this
Head of Tax at Caiado Guerreiro. “Recent
changes have brought about a stability that actually works in practice.
“The initiative that we believe could have
has replaced the past uncertainty.”
more impact in the coming months has been
What is important is the added
to simplify the system of SOCIMIs (Spanish
value this gives to the economy, says
REIT),” says Carlos Diéguez, Head of Tax
Diogo Ortigão Ramos, Head of Tax at
at Broseta. “Listing would be possible on a
Cuatrecasas, Gonçalves Pereira, Portugal.
MAB (multilateral trading system) and the
“We have created the conditions to boost
24 • IBERIAN LAWYER • January / February 2014
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