11.8.1.2 Joint taxation regime with Navarra

This section (on page 26 of form 200) must be completed by all those taxpayers of Corporate Tax who must pay taxes jointly to the State Administration and the Foral Community of Navarra, provided that, in addition, they are subject to State regulations. This group of taxpayers are those who meet one of the following two circumstances:

1. That, having their tax domicile in common territory, they carry out operations in both territories (common and regional) during the tax period and that their volume of operations in the immediately preceding fiscal year has exceeded 7,000,000 euros.

2. That, having their tax domicile in the provincial territory, they carry out operations in both territories (common and provincial) during the tax period, their volume of operations in the immediately preceding fiscal year has exceeded 7,000,000 euros and that the total of the operations carried out in common territory constitute at least 75 percent of the total of those carried out in the previous year.

The above criteria are also applicable to non-resident Income Tax taxpayers who obtain income subject to it through a permanent establishment.

The installment payments will be made in proportion to the volume of operations carried out in each territory in accordance with the proportion determined in the last tax declaration-settlement.

To determine the taxation of tax groups, the following rules will be applied:

1. The tax consolidation regime will be that corresponding to that of the Foral Community when the dominant company and all the dependent companies are subject to foral regulations in the individual tax regime, and will be the one corresponding to the tax consolidation regime of the common territory when the dominant company and all the dependents were subject to the common territory tax regime in the individual tax regime. For these purposes, companies that are subject to the other regulations will be considered excluded from the tax group.

2. The tax groups in which the dominant entity is subject to regional regulations in the individual tax regime will be equivalent in their tax treatment to the tax groups in which the dominant entity is non-resident in Spanish territory.

3. In any case, the same regulations will be applied to those established at any time by the State for the definition of tax group, dominant company, dependent companies, degree of dominance and internal operations of the group.

On the other hand, and in accordance with the provisions of the seventeenth transitional provision of the Economic Agreement between the State and the Foral Community of Navarra, added by Law 14/2015, which establishes that:

• Tax groups subject to common regulations in tax periods beginning before January 1, 2015 that include dependent entities subject to the regional regulations of Navarra under individual regime, may choose to maintain said entities in the tax group in the tax periods that are started later, provided that their start date is not later than December 31, 2024 and the requirements established in article 58 of LIS are met.

• The option indicated in the previous paragraph must be exercised in the first tax period that begins on January 1, 2015 and will be communicated to the Tax Treasury of Navarra and the State Tax Administration. Once the option is exercised, the tax group will be linked to it during the following tax periods, as long as the requirements of article 58 are met and as long as its application is not waived. The resignation must be exercised within 2 months from the end of the last tax period of its application and must be communicated to both Administrations.

Likewise, the tax regime of economic interest groups and temporary unions of companies will correspond to Navarra when all the entities that make them up are subject to regional regulations, without prejudice to the fact that the distribution of the profit of said groupings of companies is carried out with in accordance with the criteria indicated, for the purposes of Corporate Tax, in the Economic Agreement between the State and the Foral Community of Navarra.

In the event of the start of the activity in the year, to calculate the figure of 7,000,000 euros, the volume of operations carried out in said year will be taken into account. If this exercise is less than one year, for the calculation of the previous figure, the operations carried out will be increased to one year. Until the volume and place of carrying out the previous operations are known, those that the taxpayer estimates based on the operations that he plans to carry out during the year at which the activity begins will be taken as such, for all purposes.

In this section (on page 26 of model 200), the calculation of the tax percentages to each Administration is carried out in the cases of joint taxation to the State and the Provincial Councils of the Basque Country and/or Foral Community of Navarra, as well as the breakdown for each of these Administrations of the data corresponding to the quota, installment payments and other necessary to calculate the liquid amount to be deposited or returned to each of them.

In accordance with the provisions of the Economic Agreement with the Autonomous Community of the Basque Country (Law 12/2002, of May 23, modified by Law 28/2007, of October 25 and by Law 7/2014, of April 21 ) and in the Economic Agreement between the State and the Foral Community of Navarra (Law 28/1990, of December 26, modified by Law 48/2007, of December 19 and by Law 14/2015, of June 24 ), joint taxation regimes are applied between the State and the Provincial Administrations for the distribution of Corporate Tax according to the volume of operations carried out in each of the territories.