Joint taxation system with Navarra

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

• 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 million euros.

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

The above criteria are also applicable to non-resident income tax payers who obtain income subject to the same through a permanent establishment.

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

• The split 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 return-settlement.

• The tax consolidation regime will be the one corresponding to that of the Foral Community when the parent company and all the subsidiaries were subject to foral regulations under an individual taxation regime. Instead, it will be the one corresponding to the fiscal consolidation regime of common territory when the parent company and all subsidiaries were subject to the common territory tax regime under an individual taxation regime. For these purposes, companies that are subject to the other regulations will be considered excluded from the tax group.

  The tax groups in which the dominant entity is subject to the regional regulations under the individual taxation regime, will be treated the same as the tax groups in which the dominant entity is not resident in Spanish territory.

  In any case, the same regulations as those established at any given time by the State for the definition of tax group, parent company, dependent companies, degree of ownership and internal operations of the group will apply.

  Furthermore, and in accordance with the provisions of the transitional provision of Law 28/1990, of December 26, approving the Economic Agreement between the State and the Foral Community of Navarra, added by Law , of June 24:

  • The tax groups subject to common regulations in tax periods beginning before January 1, 2015 that include dependent entities subject to the Navarra tax regulations under an individual regime, may choose to keep said entities in the tax group in tax periods that begin thereafter, provided that the start date of these 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 or after January 1, 2015 and will be communicated to the Navarra Tax Authority and to the State Tax Administration. Once the option has been exercised, the tax group will be bound by 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 waiver must be exercised within 2 months from the end of the last tax period of its application and must be communicated to both Administrations.

• The tax regime of the economic interest groups and temporary business associations will correspond to Navarra when all the entities that comprise them are subject to regional regulations, without prejudice to the distribution of the profit of said business groups being carried out 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.

Finally, with regard to the determination of the regulations applicable for the purposes of Corporate Tax in the Basque Country and Navarre, the following diagram is reproduced below: