SPAIN Law and Practice Contributed by: Ángel Pérez López, Luis Jiménez and Rodrigo del Saz, Uría Menéndez
way for defending personal guarantees based on the benefit for the whole group. Specific transactions cannot be rescinded in accordance with the Spanish Insolvency Law, namely: • actions taken by a debtor in the ordinary course of business and in normal terms; • the creation of in rem guarantees that secure public claims, as well as acknowledging and repaying public claims that aim to remove or reduce the debtor’s criminal liability; • netting and transfer orders entered into a payment and securities settlement system before the declaration of insolvency; and • restructuring plans approved by the court are also, under certain circumstances, protected against claw-back. According to Spanish law, stamp duty (on notar- ial documents) is triggered when a public deed ( escritura pública ) or a notarial minutes ( acta notarial ) is granted with economically valuable content and is (i) eligible to be registered with a public registry (eg, the land registry, movable property registry or commercial registry) and (ii) not subject to transfer tax, capital duty or inherit- ance and gift tax. The costs and taxes arising from the creation of in rem rights documented in a public deed or notarial minutes that require registration with a Spanish public registry (such as a real estate mortgage) can be significant. Stamp duty (rang- ing generally from 0.5 to 3%, depending on the autonomous region), notarial fees and Land Registry fees – which are charged on a sliding 8. Tax Issues 8.1 Stamp Taxes
scale – are all linked to the amount secured by the mortgage (ie, principal, ordinary interest, default interest and costs). Furthermore, (i) specific guarantees granted by persons who are not engaged in business activi- ties (eg, natural persons) may trigger Spanish transfer tax (typically 1% of the secured amount) for the guaranteed party, and (ii) specific promis- sory notes and cheques may also be subject to stamp duty (generally at a 0.3% rate on the face value of the specific commercial instrument). These rates may change depending on the spe- cific autonomous region. 8.2 Withholding Tax/Qualifying Lender Concepts In general, interest payments from a Spanish source are subject to withholding tax at the cur- rent rate of 19%. Specific exemptions or reduc- tions may apply to such withholding obligations depending primarily on the lenders’ particular circumstances and tax residence. The actual taxation and withholding requirements applica- ble in Spain must be determined on a case-by- case basis. Having said that, the interest payment may be exempt from withholding tax in Spain if the lend- er is the beneficial owner of the Spanish-source income and is: • a Spanish credit entity; • a Spanish branch of a foreign credit entity (validly registered with the Bank of Spain); • an entity resident in an EU or EEA (with a tax information exchange agreement with Spain in the latter case) member state not acting through a country or territory considered a non-cooperative jurisdiction pursuant to Spanish law or through a permanent estab-
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