SPAIN Law and Practice Contributed by: Jaime de la Torre and Jaime Juan Rodríguez, Cuatrecasas
the receivables) offsets its financial expenses (interest paid to the bondholders). However, certain specific CIT features are applicable to the SPE, as follows. • The tax deductibility of the impairment in the value of debt securities registered as assets in the SPE – in this regard, Rule 13 of CNMV Circular 2/2016 sets forth the criteria for the SPE to carry out value adjustments resulting from the impairment in the value of their reg - istered financial assets. Article 13.1 of the CIT Law states that the CIT regulations (Article 9 and the seventh Transitory Provision) will rule the conditions for the deductibility of value adjustments made on account of the impair - ment in the value of debt securities valued at amortised cost. • As of 1 January 2024 and pursuant to Article 16.6 of the CIT Law, the limitation on the tax deductibility of financial expenses shall apply to the SPE. • The yield of credit rights that constitute the income of the SPE shall not be subject to any withholding tax on account of the CIT liability payable by the SPE. The SPE can be considered an entrepreneur for VAT purposes. However, as SPEs carry out VAT- exempt activity, they are not entitled to deduct any input VAT. 7.3 Withholding Taxes Whether the payments on the receivables made to a non-Spanish tax resident purchaser by Spanish obligors would be subject to withhold - ing taxes in Spain depends on the characterisa - tion, for tax purposes, of the income received by the purchaser, and on the jurisdiction where the purchaser resides for tax purposes.
Although the tax characterisation of the income obtained by the non-Spanish tax resident pur - chaser is not clearly defined under Spanish law, it is likely to be deemed to be either interest income or capital gains. According to the Spanish Non-Resident Income Tax Law, regardless of whether it is character - ised as interest or capital gains, such income would be tax-exempt in Spain to the extent the purchaser meets the following requirements: • it is resident for tax purposes in an EU mem - ber state or in a state within the European Economic Area (EEA), other than a tax haven territory, provided that the purchaser is also the “beneficial owner” of such income; and • it does not act, in regards to the purchase of the receivables, through a permanent estab - lishment located in Spain or outside the EU or EEA. Residency for tax purposes in an EU mem - ber state or in a state within the EEA must be accredited through a certificate of tax residency issued by the relevant tax authorities. Tax resi - dency certificates are valid for a one-year period. If the purchaser is resident for tax purposes in a state that is neither an EU member state nor a state within the EEA, it may be subject to with - holding tax in Spain in accordance with the pro - visions set forth in the relevant convention for the avoidance of double taxation. Residency in a particular jurisdiction for the purposes of the application of a reduced rate of withholding tax in accordance with a specific convention must be accredited through a cer - tificate of tax residency, issued by the relevant tax authorities. These certificates are valid for a one-year period.
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