- 1Spain: An attractive country for investment
- 2Setting up a business in Spain
- 3 Tax System
- 4 Investment aid and incentives in Spain
- 5 Labor and social security regulations
- 6 Intellectual property law
- 7Legal framework and tax implications of e-commerce in Spain
- AI Annex I Company and Commercial Law
- AIIAnnex II The Spanish financial system
- AIIIAnnex IIIAccounting and audit issues
- Defining regulatory principles
- Tax Implications of e-commerce in Spain
3.1. Problems, general principles and initiatives taken in relation to taxation
Except for Spain’s commitments to the European Union (“EU”) on value added tax (“VAT”), at present there is no in force tax regime in Spain that specifically regulates the trading of goods and services on the Internet. Therefore, the same taxes and the same rules as those for other forms of commerce apply to e-commerce. This approach is in tune with the principles enunciated by the Spanish Tax Agency in the Report of the Commission analyzing the impact of e-commerce on the Spanish tax system, prepared by the Office of the Secretary of State for Finance.
Below is a list of the basic pieces of VAT legislation emanating from the EU:
- Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax. Council Directive 2008/8/EC of 12 February 2008 has amended Directive 2006/112/EC as regards the place of supply of services, introducing, in particular, rules applicable to telecommunications, broadcasting and electronically supplied services, with effect from January 1, 2015. On the other hand, Directive 2017/2455 of 5 December 2017 also introduced certain amendments in relation to on-line trading in goods and services. Part of these amendments came into force on January 1, 2019 (those affecting trade in services) and the pertinent changes have therefore already been made to internal legislation. Other measures, however, will not come into force until January 1, 2021 (those relating primarily to distance sales of goods) and are pending transposition into Spanish legislation.
- Council Implementing Regulation (EU) No 282/2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax. This Regulation has been amended by Council Implementing Regulation (EU) No 1042/2013 of 7 October 2013 as regards the place of supply of services. Similarly, Implementing Regulation 282/2011 was amended by means of Implementing Regulation 2017/2459 of 5 December 2017 for the purpose of introducing certain simplification rules in respect of on-line trading in services for small and medium-sized companies. These changes came into force on January 1, 2019.
- Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax, which recast Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 on administrative cooperation in the field of indirect taxation (VAT), in respect of additional measures regarding electronic commerce. On the other hand, this Regulation has been amended by Regulation (EU) 2017/2454, in order to introduce certain changes concerning the transmission of information and transfer of money between Member States, as a result of the new provisions introduced in relation to on-line trading, with effect as from January 1, 2021.
Additionally, Council Implementing Regulation 2019/2026 of 21 November 2019 has also introduced amendments to Implementing Regulation 282/2011 that will come into force on January 1, 2021. Those amendments are related to supplies of goods or services facilitated by electronic interfaces and the special schemes for taxable persons supplying services to non-taxable persons, making distance sales of goods and certain domestic supplies of goods.
- Council Regulation (EU) No 967/2012 of 9 October 2012 amending Council Implementing Regulation (EU) No 282/2011, as regards the special schemes for non-established taxable persons supplying telecommunications services, broadcasting services or electronic services to non-taxable persons. Among other matters, this Regulation regulates the existence, starting January 1, 2015, of a single point of electronic contact for suppliers of EU electronic, telecommunications, and broadcasting services which will enable enterprises to declare and pay over the VAT in the Member State where they are established rather than doing so in the customer’s country.
The provisions of these pieces of legislation and their transposition into Spanish law are examined in the section on the indirect taxation of e-commerce.
Nowadays, member countries of the Organization for Economic Co-operation and Development (OECD) and the G20 are working on the developing and implementing of international standards in tax matters. This work has its origin in the 15 measures of the Action Plan against of the Base Erosion and the Profit Shifting (BEPS Action Plan) published in 2013. Action 1 of this project (Addressing the tax challenges of the Digital Economy, OECD, 2015) addresses the current fiscal challenges of the digital economy. In 2019, the OECD, through the Inclusive Framework on BEPS which met on May 28 and May 29, has launched a new document with a work program to achieve a consensus solution in 2020 on the tax challenges of the digital economy. This document contains a Pillar One, focused on reforming the principles of international taxation, and a Pillar II, targeted at the outstanding challenges of BEPS and giving rise to the proposal of two possible measures: an income inclusion rule and what is referred to as a tax on base eroding payments, both aimed at allowing some countries to tax certain types of income where the country with primary taxing rights has not exercised its fiscal sovereignty in a way considered to be sufficient. The new document takes up the two pillars and sets out a range of options to explore. On October 9, the OECD published a document for public consultation (“Secretarial Proposal for a Unified Approach under Pillar One”), to ensure that multinationals, including digital companies pay taxes wherever they perform significant consumer facing activities and generate profits. Instead of physical presence (which is without importance in these businesses), the proposed system is based on determining the country where sales are made, while retaining a portion of the taxing rights for the countries where those businesses perform activities geared towards value creation.
The EU has also been concerned about the growing digital economy of our day. In this sense, it has long promoted the European Strategy eEurope002 (now eEurope2020) which encourages e-commerce. It has also set up a group of experts on taxation of the digital economy whose first report took place in May 2015 entitled "Commission Expert Group on Taxation of the Digital Economy". This report refers, among others, to the BEPS Action Plan, as well as, in tax matters, to Corporate Income Tax and VAT.