SPAIN Law and Practice Contributed by: Álvaro Paniagua Rico and Borja López Pol, Anaford Abogados
pendently of its nature (ie, dividend, interest, capital gain, etc). Generally, the attributable income is passive (eg, real estate and movable capital income, etc). Therefore, no attributable income would exist if the entity car - ries out, mainly, business activities (less than 15% of the total income is considered as attributable income). Nevertheless, although the entity does not receive passive income, CFC rules will also apply to the total income if the non-resident entity lacks adequate human and material resources and proves that the entity’s constitution and business are based on sound business reasons. In terms of reporting obligations and transparency, it is worth mentioning the Common Reporting Standard (CRS) and the Central Register of Beneficial Owner - ship (CRBO). CRS Spain has adopted the CRS, and the Spanish Tax Authorities actively use the information obtained through it. Central Register of Beneficial Ownership The CRBO is a single, nationwide register managed by the Spanish Ministry of Justice. The purpose of the CRBO is to collect and provide access to up-to-date information on the beneficial ownership of all Spanish legal entities, as well as trusts, trust-like arrangements, and similar legal struc - tures without legal personality operating in Spain. In addition to current data, the register also includes his - torical information on such entities, which is available to the competent authorities. The register is part of a broader framework aimed at protecting the integrity of the financial system and other areas of economic activity through the prevention of money laundering and terrorist financing. In accordance with European Union and Spanish leg - islation, a beneficial owner is defined as the natural person or persons who ultimately own or control, directly or indirectly, more than 25% of the share capi - tal or voting rights of a legal entity, or who otherwise
exercise direct or indirect control over such an entity. Where no such natural person can be identified, the person or persons holding the position of director shall be considered the beneficial owner(s). Additionally, in the case of foundations, members of the Board of Trustees shall be deemed beneficial own - ers, and in the case of associations, the members of the governing body or management board shall be considered as such. 2. Succession 2.1 Cultural Considerations in Succession Planning Succession, understood as the process of transfer - ring assets via mortis causa, has always had a long tradition in Spain from a legal standpoint, with com - prehensive civil and tax legislation in place. It should be noted that, in addition to state civil regu - lations, different autonomous communities have their own civil succession regimes, which demonstrates Spain’s rich legal and historical heritage. Likewise, from a tax point of view, which is what con - cerns us in this section, Spanish legislation can be divided into two main blocks:
• state legislation; and • regional legislation.
State legislation acts as a general legislative frame - work (a law dating back to the last century, although it has evolved), and the autonomous communities have the power to develop the framework established by state regulations, as it is a transferred tax. The key measures to consider for a smooth and tax-efficient succession primarily involve the family relationships between the deceased and their heirs. Additionally, recognising certain active companies as family businesses can lead to virtually no taxation on those assets.
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