Special tax regime for international tax transparency
We inform you of the consequences of BREXIT on the special tax regime for international tax transparency
This special tax regime regulated in article 100 of the LIS establishes the imputation of income obtained by taxpayers who are partners or participants in non-resident companies under a series of circumstances, such as if they are owned by more than 50 percent by the partners and that have a direct tax burden less than 75 percent of what would correspond in Spain.
This imputation regime will not apply when the entity not resident in Spanish territory is resident in another Member State of the European Union, provided that the taxpayer proves that its constitution and operations respond to valid economic reasons and that it carries out economic activities or is of a collective investment institution other than those provided for in article 54 of this Law, established and domiciled in a Member State of the European Union.
This escape clause from the application of the international tax transparency regime when the controlled entity is resident in another Member State will not apply to the United Kingdom as of January 1, 2021.
Therefore, as of January 1, 2021, it will mean the non-application of the international tax transparency regime and thus the income that the entity domiciled in British territory obtains will be subject to the imputation regime at the headquarters of the Spanish partner.