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Article 7 of Royal Decree-Law 23/2020, of June 23, in the wording given by the Eighth Final Provision of Royal Decree-Law 34/2020, of November 17, with effects for tax periods that begin within the years 2020 and 2021, establishes that the deduction percentage referred to in letter c) of article 35.2 of the LIS (Corporate Tax Law) will increase by 38 percentage points for expenses incurred in projects started on or after the 25th. June 2020 consisting of carrying out technological innovation activities whose result is a technological advance in obtaining new production processes in the value chain of the automotive industry or substantial improvements to existing ones. Thus, this deduction is increased depending on the type of taxpayer among those taxpayers who are considered small and medium-sized companies in accordance with the provisions of Annex I of Regulation (EU (European Union)) No. 651/2014 of the Commission, of June 17, 2014, and those that do not. In the case of taxpayers who do not have this consideration, the expected increase will be 3 percentage points.
The fourth Final Provision of Royal Decree-Law 23/2020, of June 23, introduced the sixteenth Additional Provision in the LIS, which includes a new assumption of freedom of amortization in investments made in the value chain of electric, sustainable or connected. In this sense, the sixteenth Additional Provision in the LIS, in its wording given by Royal Decree-Law 34/2020, includes the tax incentive of freedom of amortization in investments made in the electric, sustainable or connected mobility value chain for investments made in tax periods ending between April 2, 2020 and June 30, 2021. In this way, investments in new elements of tangible assets that involve sensorization and monitoring of the production chain can be freely amortized, as well as the implementation of manufacturing systems based on modular platforms or that reduce the environmental impact, affecting the industrial sector of automotive, made available to the taxpayer and that come into operation between April 2, 2020 and June 30, 2021, provided that, during the 24 months following the start date of the tax period in which the acquired elements come into operation operation, the total average workforce of the entity is maintained compared to the average workforce of 2019. It should be taken into account that the maximum amount of the investment that can benefit from the freedom of amortization regime will be 500,000 euros.
Furthermore, for the application of this assumption of freedom of amortization, taxpayers must provide a reasoned report issued by the Ministry of Industry, Commerce and Tourism to classify the taxpayer's investment as suitable. Said report will be binding on the Tax Administration.
This new assumption of freedom of amortization regulated in the sixteenth Additional Provision of the LIS is incompatible with the assumption of freedom of amortization established in article 102 of the LIS for small entities, so these entities will have to choose to apply one of the two tax incentives.
With effects for tax periods that begin on January 1, 2020 and that have not ended on March 11, 2021, Royal Decree-Law 4/2021, of March 9, which modifies the Law 27/2014, of November 27, on Corporate Tax, and the consolidated text of the Non-Resident Income Tax Law, approved by Royal Legislative Decree 5/2004, of March 5, in relation to hybrid asymmetries , introduces a new article 15 bis in the LIS , with the consequent repeal of article 15 j) of the IS , and adds sections 6 and 7 to article 18 of the Consolidated Text of the Non-Resident Income Tax Law, with the aim of transposing Council Directive (EU) 2016/1164, of July 12, 2016, in the wording given by the Directive ( EU) 2017/952 of the Council, of May 29, 2017, regarding hybrid asymmetries that take place between Spain and other Member States and between Spain and third countries or territories.
In general, with the introduction of this new article 15 bis of the LIS, the aim is to neutralize the fiscal effects generated by the hybrid asymmetries generated between a taxpayer of Corporate Tax located in Spanish territory and a related entity established in another Member State. or in a third country or territory, when they carry out operations that have different tax classifications in Spain and in that other country.
Article 65.One of Law 11/2020, of December 30, on the General State Budgets for the year 2021, with effects for tax periods that begin on January 1, 2021 that have not concluded as of entry into force of this law (01-01-2021) and validity indefinitely, modifies the regulation in article 16.1 of the LIS on the limitation on the deductibility of financial expenses, establishing that for the determination of the operating profit, no take into account the addition of financial income from participations in equity instruments that correspond to dividends, when the acquisition value of said participations is greater than 20 million euros, without reaching the percentage of 5 percent referred to in the articles 21.1 a) and 32.1 a) of the LIS.
On the other hand, due to the incorporation into the LIS of article 15 bis (with the consequent repeal of article 15 j) of the LIS) carried out by Royal Decree-Law 4/2021, of March 9, with the aim of transposing Council Directive (EU) 2016/1164, of July 12, 2016, in the wording given by Council Directive (EU) 2017/952, of May 29, 2017, regarding hybrid asymmetries that have place between Spain and other Member States and between Spain and third countries or territories, article 16.1 of the LIS is modified in said Royal Decree-Law, to establish that the reference made to the expenses referred to in the repealed article 15 j) of the LIS, must be carried out with effect for the tax periods that begin on January 1, 2020 and that have not concluded upon the entry into force of this Royal Decree-Law (March 11, 2021), to the non-deductible expenses of article 15 bis of the LIS.
Law 11/2021, of July 9, on measures to prevent and combat tax fraud modifies the regulation of exit taxation, with the aim of transposing Council Directive (EU) 2016/1164, of July 12 of 2016, which states that the function of said taxation is to guarantee that, when a taxpayer moves his assets or his tax residence outside the tax jurisdiction of the State, said State must tax the economic value of any capital gain created in its territory, even when said capital gain has not yet been realized at the time of departure.
Specifically, with effects for the tax periods that begin on January 1, 2021, through the modification introduced in article 19.1 of the LIS by Law 11/2021, of July 9, it is replaced in the cases of change of residence of an entity to a Member State of the European Union or the European Economic Area that has entered into an agreement with Spain or the European Union on mutual assistance in the collection of tax credits, the possibility that the taxpayer had to postpone the payment of the tax debt resulting from the application of the provisions of the first paragraph of the aforementioned article 19.1 of the LIS, until the affected assets are transferred to third parties, due to the possibility of splitting said payment, also upon request. of the taxpayer, in equal annual fifths.
The exercise of the option will be carried out exclusively in the Corporate Tax declaration corresponding to the tax period concluded on the occasion of the change of residence, taking into account that the payment of the first fraction must be made within the voluntary declaration period corresponding to said period. tax. The expiration and enforceability of the four remaining annual installments will be required together with the late payment interest accrued for each of them, successively after one year from the end of the voluntary declaration period corresponding to the last tax period. Furthermore, the provision of guarantees will be required when the existence of rational indications that the collection of the debt could be frustrated or seriously hindered is justified.
Finally, the cases in which the division will lose its validity are included, as well as the consequences of said loss.
Article 65.Two of Law 11/2020, of December 30, on the General State Budgets for the year 2021, with effects for tax periods that begin on January 1, 2021 that have not concluded as of entry into force of this law (01-01-2021) and validity indefinitely, modifies the first paragraph of letter a) of article 21.1 of the LIS and letter a) of article 21.6 of the LIS , to establish that dividends or participation in profits of entities will be exempt, when the requirement is met that the percentage of participation, direct or indirect, in the capital or own funds of the entity is, at least, of 5 percent, eliminating the alternative requirement that the acquisition value of the stake be greater than €20 million.
In relation to the above, the fortieth transitional provision is added to the LIS to regulate a transitional regime to be applied for a period of 5 years to the shares acquired in the tax periods beginning prior to January 1, 2021, which had a value of acquisition exceeding 20 million euros, without reaching the 5 percent percentage established in article 21.1 a) of the LIS .
On the other hand, section 10 is added to article 21 of the LIS , which establishes that the amount of dividends or participation in profits of entities and the amount of positive income obtained in the transfer of participation in an entity and in the rest of the cases referred to in article 21.3 of said Law, to which the exemption provided therein is applicable is reduced, for the purposes of the application of said exemption, by 5 percent in management expenses referred to said participations, and section 11, which states that the 5 percent reduction applicable to dividends or participations in profits of entities referred to in the aforementioned section 10, will not apply when the following circumstances:
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Dividends or participation in profits are received by an entity whose net turnover in the immediately preceding tax period is less than 40 million euros.
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Dividends or participation in profits come from an entity incorporated after January 1, 2021 in which it holds, directly and since its incorporation, all of the capital or own funds.
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Dividends or shares in profits are received in the tax periods that end in the 3 years immediately following the year of incorporation of the entity that distributes them.
Finally, a paragraph is added to the end of article 64 of the LIS that establishes that the amounts that must be integrated into the individual tax bases by application of the provisions of article 21.10 of the LIS will not be subject to elimination.
Article 65.Three of Law 11/2020, of December 30, on the General State Budgets for the year 2021, with effects for tax periods that begin on January 1, 2021 that have not concluded as of entry into force of this law (01-01-2021) and validity indefinitely, modifies letter a) of article 32.1 of the LIS, which regulates the deduction for international double taxation on dividends or participation in profits paid by a non-resident entity in Spanish territory, eliminating the alternative requirement that the acquisition value of the participation be greater than 20 million euros.
In relation to the above, the fortieth transitional provision is added to the LIS to regulate a transitional regime to be applied for a period of 5 years to the shares acquired in the tax periods that began prior to the January 1, 2021, that had an acquisition value of more than 20 million euros, without reaching the 5 percent percentage established in article 32.1 a) of the LIS.
Finally, section 4 of article 32 of the LIS is modified to add that, to calculate the full quota, dividends or participations in profits will be reduced by 5 percent as management expenses related to said participations, unless the circumstances of non-application regulated in article 21.11 of the LIS occur. The excess over said limit will not be considered a tax-deductible expense, without prejudice to the provisions of article 31.2 of the LIS.
In relation to the deduction for investments in Spanish film productions of feature films and short films and fiction, animation or documentary audiovisual series, Law 11/2020, of December 30, on the General State Budgets for the year 2021, with effects For tax periods starting on January 1, 2021, it modifies letter a') of article 36.1 of the LIS , adding that the required certificates will be binding for the Tax Administration , regardless of the date on which they were issued.
In addition, Royal Decree-Law 17/2020, of May 5, modifies the definition of cinematographic productions and allows until August 31, 2020 (this period is extended until January 31, 2021, as established in the first section of Order CUD/807/2020, of August 27) are also considered a commercial release of a film, without it losing its status as a cinematographic film, the deduction for investments in Spanish cinematographic productions regulated in article 36.1 of the LIS, which is carried out through television and platforms that offer streaming content (through television audiovisual communication services, as well as electronic communication services that broadcast television channels or catalog services of programs).
On the other hand, the last paragraph of article 39.1 of the LIS is modified, adding that the increased limit of the deduction to 50 percent will also apply (in addition to the deduction for research and development and technological innovation activities regulated in the article 35 of the LIS), to the deduction for investments in cinematographic productions, audiovisual series and live shows of performing and musical arts regulated in article 36 of the LIS, when these deductions exceed 10 percent of the full account reduced in the deductions to avoid international double taxation and bonuses.
Section 5 of article 39 of the LIS is also modified to establish in relation to the requirement of permanence of the assets subject to deductions to encourage certain activities regulated in articles 35 to 38 of the LIS, that in the case of deduction for investments in cinematographic productions, audiovisual series and live shows of performing and musical arts regulated in article 36 of the LIS, said requirement will be understood to be fulfilled to the extent that the production company maintains the same percentage of ownership of the work during the period of 3 years, without prejudice to its power to fully or partially market the exploitation rights derived from it to one or more third parties.
Finally, section 7 is added to article 39 of the LIS, which extends the application of the deductions regulated in sections 1 and 3 of article 36 of the LIS to the taxpayer who participates in the financing of Spanish productions of feature films and cinematographic short films and audiovisual series of fiction, animation, documentaries or production and exhibition of live performances of performing and musical arts carried out by another taxpayer. The taxpayer who participates in the financing of said productions must contribute amounts as financing to cover all or part of the costs of the production without acquiring intellectual or other property rights regarding the results thereof, whose ownership In any case, it must be from the producer. These contributions can be made at any stage of production until the nationality certificate is obtained.
In relation to the deduction for investments in foreign productions of feature films or audiovisual works, Law 11/2021, of July 9, on measures to prevent and combat tax fraud, with effects for tax periods that begin on As of January 1, 2021, it incorporates in article 36.2 of the LIS, some of the requirements that producers who are in charge of the execution of foreign productions of feature films must meet, in order to apply said deduction.
For these purposes, the certificate issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community, is required, accrediting the cultural nature of the production in order to comply with the provisions of the Communication. of the Commission on state aid to cinematographic works and other productions in the audiovisual sector, of 15 November 2013. In addition, the incorporation in the credit titles of the work of the specific filming locations in Spain is requested and the authorization of the use of the title of the work and of graphic and audiovisual press material that expressly includes specific filming locations or of any other production process carried out in Spain, for the carrying out of activities and preparation of promotional materials in Spain and abroad for cultural or tourist purposes, which may be carried out by state, regional or local entities with powers in matters of culture, tourism and economy.
Finally, the forty-second transitional provision of the LIS is added, which establishes that the requirements regulated in letters b') and c') of article 36.2 of the LIS, to which reference has been made in the previous paragraph, will not be enforceable. in the case of foreign productions of feature films and audiovisual works in respect of which the contract by which the execution of the production is in charge had been signed prior to the date of entry into force (07-11-2021) of the Law of measures to prevent and combat tax fraud.
Article 65.Five of Law 11/2020, of December 30, on the General State Budgets for the year 2021, with effects for tax periods that begin on January 1, 2021 that have not concluded as of entry into force of this law (01-01-2021) and validity indefinitely, modifies section 10 of article 100 of the LIS, which establishes that dividends or shares in profits will not be integrated into the tax base in the part that corresponds to the positive income that has been included in the tax base, incorporating that for these purposes, the amount of dividends or participations in profits will be reduced by 5 percent as management expenses related to said participations, unless the circumstances apply. established in article 21.11 of the LIS.
Section 11 of article 100 of the LIS is also modified, which establishes that to calculate the income derived from the transfer of the participation, direct or indirect, the acquisition value will be increased by the amount of the social benefits that, without effective distribution, correspond to income that had been imputed to the partners as income from their shares or participations in the period of time between their acquisition and transmission, incorporating, for these purposes, that the amount of the corporate benefits referred to in this section is will reduce management expenses related to said shares by 5 percent.
Subsequently, Law 11/2021, of July 9, on measures to prevent and combat tax fraud, with effects for tax periods starting on January 1, 2021, modifies article 100 of the LIS with the purpose of transposing Directive (EU) 2016/1164, of the Council, of July 12, 2016.
For these purposes, section 1 of article 100 of the LIS is modified to establish that the imputation of income that occurs by application of the international tax transparency regime, not only affects those obtained by entities in which the taxpayer has a stake, but also those obtained by their permanent establishments abroad. Section 12 of article 100 of the LIS is also modified to add the documentation that must be provided along with the Corporate Tax declaration, for the income obtained by said permanent establishments.
Finally, section 3 of article 100 of the LIS is modified to introduce various types of income that may be subject to imputation in this international tax transparency regime, such as those derived from financial leasing operations or insurance, banking activities. and other financial activities.
With effect for tax periods starting on January 1, 2021, Law 11/2021, of July 9, on measures to prevent and combat tax fraud, modifies article 119 of the LIS to introduce a technical improvement in the regulation of deregistration in the Corporate Tax entity index, to clarify that the concept of "failed" must be applied to debtor entities, and not to credits .
With effects for tax periods beginning on January 1, 2021, the second Final Provision of Law 11/2021, of July 9, on measures to prevent and combat tax fraud, modifies the special tax regime applicable to Listed Investment Companies in the Real Estate Market (SOCIMI), introducing in section 4 of article 9 of Law 11/2009, of October 26, a special tax of 15 percent on the amount of profits obtained in the year that is not the subject of distribution, in the part that comes from income that has not been taxed at the general corporate tax rate nor is it income covered by the 3-year reinvestment period regulated in letter b) of the article 6.1 of Law 11/2009.
This special tax will be considered a Corporate Tax fee and will accrue on the day of the agreement to apply the results of the year by the general meeting of shareholders, or equivalent body. Said special tax must be self-assessed and entered in form 237 approved by Order HFP/1430/2021, of December 20, within two months from the date of accrual.
Finally, due to the introduction of this special tax, section 1 of article 11 of Law 11/2009, of October 26, which regulates the information obligations in the annual accounts report, is modified to add the obligation to distinguish in said information, the part of the income subject to the special tax rate of 15%.
1. Deduction for investment in cinematographic production
With effects for tax periods beginning on January 1, 2021, the first Final Provision of Law 14/2021, of October 11, which modifies Royal Decree-Law 17/2020, of 5 of May, which approves measures to support the cultural and tax sector to address the economic and social impact of COVID-2019, modifies the fourteenth Additional Provision of Law 19/1994, of July 6, modifying of the Economic and Fiscal Regime of the Canary Islands, to update the limits applicable to deductions for investments in film productions and audiovisual series made in the Canary Islands.
In this way, it is established that the amount of the deduction for investments in Spanish productions of feature films and short films and audiovisual fiction, animation or documentary series regulated in article 36.1 of the LIS, may not be higher than the result of increasing 80% of the maximum amount referred to in said article when it comes to productions made in the Canary Islands.
Furthermore, it is established that the amount of the deduction for expenses incurred in Spanish territory for foreign productions of feature films or audiovisual works regulated in article 36.2 of the LIS, as well as the amount of the deduction for expenses incurred in the production and exhibition of live performances of performing and musical arts referred to in article 36.3 of the LIS, may not be higher than the result of increasing by 80% the maximum amount referred to in said articles when it comes to expenses incurred in the Canary Islands.
2. Tax regime for ships and shipping companies in the Canary Islands
With effect for tax periods starting on January 1, 2021 that have not ended on July 11, 2021, Law 11/2021, of July 9, on measures to prevent and combat tax fraud, adds section 3 to article 73 of Law 19/1994, of July 6, modifying the Economic and Fiscal Regime of the Canary Islands, to establish that ships of shipping companies registered in the Special Registry of Ships and Shipping Companies that are registered in another Member State of the European Union or the European Economic Area, are also considered to be registered in the Special Registry, provided that they comply with the requirements required of other vessels for their registration.
introducing a limitation on said applicable bonuses. For these purposes, it is established that when the part of the tax base that comes from the performance of activities closely related to maritime transport exceeds the part of the tax base resulting from the activities that generate the right to apply the special regime, the The fee corresponding to said excess may not be subject to a bonus. This limitation will apply to each of the vessels whose exploitation generates the right to the bonus.
Finally, it is added in said article 76 of Law 19/1994, of July 6, that the negative tax bases derived from the activities that generate the right to the application of the special regime for ships and shipping companies in the Canary Islands, may not be be offset with positive tax bases derived from the rest of the entity's activities, neither in the current year nor in subsequent years.
With effects for tax periods that begin on or after January 1, 2021, Law 14/2021, of October 11, which modifies Royal Decree-Law 17/2020, of May 5, modifies the article 2 of Law 49/2002, of December 23, to include within the list of non-profit entities, and which can thus be considered as entities benefiting from patronage, non-resident entities that operate in Spanish territory through establishment permanent and to entities resident in a Member State of the European Union or other member States of the European Economic Area.
On January 31, 2020, the United Kingdom effectively left the European Union.
However, it should be noted that, in relation to Corporate Tax, there is a bilateral agreement between the United Kingdom and Spain to avoid double taxation, which will continue to be applicable from January 1, 2021. For these purposes, certain income that is no longer exempt in application of domestic regulations would continue to be considered exempt income invoking the right to apply said Convention.