Suspension of tax collection.

Yes, according to paragraph 6.1 of the Fist Additional Provision e of the Consolidated Text of the Non-Resident Income Tax Law, in mutual agreement procedures, collection of the debt will be suspended automatically at the request of the interested party where the amount of the debt, as well as any surcharges which may be applicable at the time when suspension is requested, is guaranteed as required under the regulation.

In that regard, Article 58 of the Regulation on Mutual Agreement Procedures provides that suspension of collection of the tax debt may be requested in mutual agreement procedures when the following requirements are satisfied:

1. Initiation of the mutual agreement procedure has been requested.

2. It is not possible to request the suspension in administrative or judicial proceedings.

3. The guarantees provided for in section 5.2 of the First Additional Provision of the Consolidated Text of the Non-Resident Income Tax Law, approved by Legislative Royal Decree 5/2004, of 5 March, are provided.

That is, where the suspension has been requested in administrative or judicial proceedings, tax collection will be suspended according to the procedure for the relevant administrative/judicial appeals.

Any person who has requested the initiation of a mutual agreement procedure can request it.

According to Article 60 of the Regulation on Mutual Agreement Procedures, the competent collection bodies are those determined in the specific organisational regulations. In the case of mutual agreement procedures relating to transfer pricing, it is the responsibility of the collection body of the regional office applicable to the debtor.

According to Article 61.5 of the Regulation on Mutual Agreement Procedures, the request for suspension is to be submitted as a written document containing the following points and must be accompanied by the following documentation, as well as any other documentation that the taxpayer considers relevant to prove that the requirements necessary for granting the suspension are satisfied:

1. Taxpayer’s full name or trade name, tax identification number and address Where the taxpayer is acting through a representative, full identification details of the representative must be included, as well as evidence of their authority to represent the taxpayer.

2. Body from which the suspension is requested.

3. Document formalising the guarantee provided, which shall be instituted before the competent tax collection body and must include the signatures of the individuals providing the guarantee, authenticated by a notary public or by appearing before the authority that issued the relevant tax assessment, or authenticated digital signatures. An electronically generated image of said document is valid as well, provided that the digitalization process ensures its authenticity and integrity.

4. The administrative assessment, proceeding or self-assessment origin of the tax debt whose suspension is sought, including identification data and dates of former proceedings.

5. Copy of the request for initiation of the mutual agreement procedures under Article 1 and, where that request has been accepted at the time when the request for suspension is submitted, a copy of the admission of the procedures under Article 1. (mutual agreement procedure)

6. Statement declaring that the suspension in administrative or judicial proceedings l is unavailable for the taxpayer.

7. Taxpayer’s address for notifications.

8. Place, date and signature of the document or request.

Where the request does not satisfy the requirements listed above or where it is necessary to amend defects in the document formalising the guarantee, the taxpayer will be requested to amend the defect or provide the required documents within ten days, starting from the day following notification of that request, and will be informed that failure to comply with the request will result in the proceedings being dismissed and the request for suspension being regarded as not having been submitted (Article 61.7 of the Regulation on Mutual Agreement Procedures).

The guarantees to be provided are those referred to in paragraph 6.2 of the First Additional Provision one of the Consolidated Text of the Non-Resident Income Tax Law, which are exclusively the following:

• Deposit of cash or public securities.

• Joint and several guarantee from a credit institution or mutual guarantee society or certificate of surety bond.

In the event suspension of collection of the tax debt may no longer be obtained in administrative or judicial proceedings, suspension may be requested within the mutual agreement procedure, in which case the guarantees provided to the administrative or judicial bodies will remain valid, provided that they are of the types mentioned above (Article 62.2 of the Regulation on Mutual Agreement Procedures).

As regards the amount, the sum of the debt to which the mutual agreement procedure relates must be guaranteed; that is, if that procedure does not relate to the whole debt, suspension will be limited to the amount affected by the mutual agreement procedure (paragraph 6.3 of the First Additional Provision of the Consolidated Text of the Non-Resident Income Tax Law), as well as any surcharges which may be applicable at the time when suspension is requested.

Yes, requests for suspension of collection of the tax debt to which a mutual agreement procedure relates may be rejected on the following grounds:

• If, at the time suspension is requested in the mutual agreement procedure, it is still possible to request suspension in administrative or judicial proceedings (Article 61.3 of the Regulation on Mutual Agreement Procedures). In such a case, the request will be dismissed and it will be regarded as not having been submitted for all relevant purposes. That dismissal will be notified to the taxpayer.

• If the request for suspension is not accompanied by the document formalising the guarantee provided or a copy of the request for initiation of the mutual agreement procedures or, where applicable, a copy of the acceptance of the request for initiation. The request for suspension will not have suspensive effects and will be regarded as not having been submitted for all relevant purposes. In such a case, the request will be dismissed and that dismissal will be notified to the taxpayer (Article 61.6 of the Regulation on Mutual Agreement Procedures).

• Where the request does not satisfy the requirements laid down in section 5 of Article 61 of the Regulation on Mutual Agreement Procedures and the request for amendment is not complied with within the required time limit. In such a case, the proceedings will be dismissed and the request will be regarded as not having been submitted (Article 61.7 of the Regulation on Mutual Agreement Procedures).

Any request for suspension that is not related to a mutual agreement procedure will have no effect, without the need for an express decision rejecting it.

According to Article 63 of the Regulation on Mutual Agreement Procedures:

1. Where the initiation of the mutual agreement procedure has been allowed, a request for suspension in accordance with the requirements laid down in paragraphs b) and c) of Article 58.1 and the provisions of Article 61 of the Regulation on Mutual Agreement Procedures will suspend the collection of the debt while the mutual agreement procedure is being conducted. The suspension will be deemed to have been agreed from the date of the request and that fact must be notified to the taxpayer.

   Where it is necessary to amend defects in the document formalising the guarantee in accordance with Article 61.7 and those defects have been amended, the competent body will agree the suspension with effect from the date of the request. The suspension decision will be notified to the taxpayer.

   Where the request for amendment has been answered by the taxpayer within the required time limit, but the defects identified are not deemed to have been rectified, suspension will be rejected. The taxpayer may appeal to the decision-making body to reconsider its decision or bring an appeal in the relevant economic-administrative Tribunal.

2. Where no decision has been made regarding whether or not to allow the initiation of the mutual agreement procedure, if suspension is requested and initiation is subsequently allowed, the competent collection body will agree the suspension with effect from the date of the request for suspension. The suspension decision will be notified to the taxpayer. The suspension decision will be notified to the taxpayer.

   Where a request for the initiation of a mutual agreement procedure has been submitted and the competent authority has not decided about its admission and where the request for suspension regulated in this title has been submitted and that request complies with the requirements for admissibility regulated in paragraphs b) and c) of Article 58.1 and the provisions of Article 61, collection of the debt will be suspended provisionally, if the request for suspension was submitted within the time limit for voluntary payment. If, in the same circumstances, the request for suspension was submitted during the enforcement period, the enforcement procedure will be initiated or continue, although the proceedings may be discontinued following the request for suspension, if a mutual agreement procedure is initiated.

   The competent collection body will ask the competent authority to inform it of whether or not the mutual agreement procedure has been initiated, in order to notify the taxpayer of the suspension.

   If the mutual agreement procedure is ultimately not initiated, the suspension will be refused. There will be no right of appeal against that decision.