SPAIN Law and Practice Contributed by: Cristina Alba and José María Rodríguez Hernández, act legal
ownership transparency, harmful offshore structures, and low or nil taxation. Historically, Spain relied on the closed list in Royal Decree 1080/1991. That regime remains relevant as background, but the current system is more flexible: the list is now updated by ministerial order under the Law 36/2006 criteria, and the existence of a tax trea - ty or exchange-of-information agreement no longer automatically prevents a jurisdiction from being clas - sified as non-cooperative. Depending on the tax and the specific provision, Spanish tax rules may impose stricter tax treatment on transactions involving entities or transactions linked to non-cooperative jurisdictions. This could include stricter tests for deductibility and business purpose, more documentation and valuation requirements, limits on the use of certain exemptions or special regimes, and more reporting and compliance burdens. 5.4 Reporting Obligations and Disclosure Regimes Spain has implemented extensive reporting obliga - tions aligned with EU transparency initiatives, which include: • DAC6 reporting for certain cross-border transac - tions that meet specific hallmarks (Forms 234, 235 and 236); • country-by-country reporting (Form 231); • platform economy reporting under DAC7 (Form 238); and • disclosure of foreign assets (Form 720) and crypto- assets held abroad (Form 721). These regimes are designed to strengthen early detection of potentially aggressive tax planning struc - tures and to improve automatic exchange of informa - tion between jurisdictions. The objective is to clearly reduce opacity in cross-border transactions, while providing the Tax Administration with sufficient data for its purposes. 5.5 Role of Tax Authorities and Enforcement Measures The GTL grants the Spanish tax authorities broad powers to investigate tax evasion. They may request
information and supporting documentation from tax - payers, third parties and public bodies. All of them have a general obligation to co-operate with the tax authorities. During audit and inspection procedures, authorities may request accounting records, con - tracts, invoices and electronic documentation, record findings in official minutes, and adopt precautionary measures. As regards entry powers, a key distinction must be made between constitutionally protected premises and non-protected business premises. For constitu - tionally protected premises, the tax authorities need either the taxpayer’s consent or prior judicial authori - sation. This protection clearly covers private homes (individual taxpayers) and may also extend to certain premises of legal entities where they form part of a private sphere reserved from third parties (ie, not open to the public or purely operational). By contrast, entry into non-protected business premises may be carried out under inspection powers, subject to the applicable legal procedures. Spanish case law requires that judi - cial authorisation for entry into protected premises be specifically reasoned and proportionate. In serious cases, tax investigations may also lead to criminal tax fraud proceedings under the Criminal Code. Taxpayer information is generally protected by tax confidentiality rules, subject to the exceptions provided by law. Spain applies a unified administrative framework for tax penalties under the GTL, which applies equally to domestic and cross-border transactions. Tax infringements include, among others, failure to pay self-assessed tax on time, incorrect reporting and the improper application of tax benefits. Penalties are generally monetary and are classified as minor, seri - ous or very serious, depending on the nature of the conduct and the statutory grading criteria. The penalty procedure is governed by Royal Decree 2063/2004 (General Regulation on the Tax Penalty Regime), which provides procedural safeguards, 6. Penalties and Sanctions 6.1 Tax Penalties
438 CHAMBERS.COM
Powered by FlippingBook