If they comply with all the requirements of section D.8 letter h) of Section VIII of the Annex of Royal Decree 1021/2015, they will be considered to be an Active Non-Financial Entity (NFE).For this purpose, it can be considered that the partial exemption applicable to these foundations and associations represents compliance with the requirement foreseen in the subsection ii) of this section (the previous is also applicable with regards to the subsection ii of section VI.B.4 letter i) of the Annex I of the FATCA Agreement between the USA and Spain).
a) When the entity holder of the account is a Non-Financial Company and it provides a declaration of tax residence in which the only missing data is that stating if it is active or passive.
No. The omission of stating the active or passive condition of the entity does not oblige the Financial Institution to block the account.Notwithstanding, the entity shall be required to complete the Tax return with this information.
b) When the person who is owner of the account or holds control provides a declaration of tax residence in which the tax identification number is missing, if it has been issued.
Yes.The NIF (Tax ID Number) is an essential requirement in the aforementioned Tax return and must always be stated in the same, in accordance with the provisions of section 2 of Section I of the Annex of Royal Decree 1021/2015.In this case, as well as blocking the account, the Financial Institution must report this situation, according to the country or jurisdiction of tax residence stated in the Tax return (unless it is aware or may be aware that this is incorrect or not reliable).Notwithstanding, this person shall be required to complete the Tax return with this information.
In the event that the person who holds or controls the financial account still does not provide the required tax return, despite a complete blocking of the account, the Financial Institution shall report the account with all the information available to it at that time, for as long as this remains the case.Notwithstanding, this person shall be required to provide the aforementioned tax return.
The gross income derived from the sale or amortisation of financial assets paid or entered in the account, i.e. for the value of the asset disposal or refund obtained, must be reported. The income produced from this transaction in terms of interest shall not be reported.
No. Financial accounts held by a capital company whose share capital is regularly traded on one or more recognised stock exchanges or by a capital company which is a related entity of a capital company whose share capital is regularly traded on one or more recognised stock exchanges shall not be reported.All of the above in accordance with the definitions in Section VIII of the Annex to Royal Decree 1021/2015, specifically that referring to "person subject to reporting" within section D. Account subject to reporting.
No, under no circumstances should SGIICs be considered as reporting entities for form 289 in relation to the information on the units in the Investment Funds they manage.
It is the Investment Funds themselves that must be considered as reporting entities for form 289 (Reporting FI) in relation to the information on their units.
SGIICs may simply file form 289, on behalf of the Investment Funds, in those cases in which they have the status of electronic proxy of the corresponding Investment Fund or of social collaborator, although, as indicated above, in these cases the entity that must appear as the declarant will, in any case, be the corresponding Investment Fund.
Funds cannot be aggregated by countries, as, in accordance with the CRS, it must be registered as declarer of the fund, not the managing company.
No. The standards for the aggregation of the account balance do not apply to those that are excluded from the concept of financial account.
The Financial Institution may accept the client's declaration of tax residence unless it is aware or may be aware that this is incorrect or not reliable.The OECD has provided an Automatic Exchange of Information portal in which information on each country is provided regarding the issue, obtaining and, if applicable, structure and operation of the corresponding NIF (http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/#d.en.347759)
It is considered that a Financial institution is aware, or may be aware that a declaration of tax residence is incorrect or not reliable if it does not contain a NIF and the information in the web portal states that the country in question issues a NIF to all its tax residents.Although the Financial Institution is not obliged to collate the format and other specifications of the NIF with the information in the aforementioned web portal, it can contrast this information in order to reinforce the quality of the information it reports and minimise the administrative charges derived from a possible administrative order for having reported an incorrect NIF (for example, by means of the use of programs that check the structure of the NIF).
Yes.This commitment must be included in the contents of the declaration of tax residence.
The Financial Institution may establish periodically (annually, for example) internal instructions and training to those employees who can be considered personal managers. This includes the file of replies of each personal manager stating that they are aware of their obligations and how to report any knowledge of fact on the tax residence of the account holders they have been assigned.
There is no specific limit.In all cases, the responsibility of correct compliance with these obligations falls on the Financial Institutions obliged to report information, and these and third parties to which they resort must be in a position to comply with the obligation foreseen in section 6 of the twenty second Additional Disposition in accordance with the General Tax Act 58/2003.
A company whose gross income is attributable mainly to direct investment, reinvestment or negotiation in property is not an Investment Company, regardless of whether it is managed professionally by another company, since property is not considered financial assets.
If, on the other hand, a company (company A) participates in another company (Company B) that invests directly in property, this participation will be considered a financial asset and the gross tax base attributable to this participation must be taken into account for determining if company A complies with the criteria to be considered an Investment Company (Section VIII, section A.6 a) iii) or section A.6 b) of the Annex of Royal Decree 1021/2015).
Yes.The management requirement referred to in the aforementioned precepts also includes the cases in which a company has the discretionary power to manage the assets (fully or partially) of another company but does not manage the company itself.
The fact that passive income has not been generated from the asset during the corresponding period is not incompatible with the fact that the purpose of the asset is to generate passive income.The importance is that the aim of the asset is to generate passive income.For example, the balance of a current account must be considered an asset that generates passive income or the holding of which has the purpose of generating passive income (interest) even if it does not generate this income.
Technically the label may be optional (as it implies a choice between one type of information or another, out of several possible options), but if such information is legally required to be included in the Form 289, the financial institution has to complete with the information it has on that field of information, in any case.In other words, if you have it, you cannot choose whether to declare it or not.
Article 5 of Royal Decree 1021/2015, of 13 November, establishes the information to be provided for each of the accounts subject to reporting, with Annex III of Order HAP/1695/2016, of 25 October, approving Form 289, for the annual informative declaration of financial accounts in the field of mutual assistance, and establishing other tax regulations, detailing the content of the information to be contained in Form 289.For example, the type of account number must be provided, although this is information that in Form 289 corresponds to an optional label.
No. The tax identification number to be obtained and included in Form 289 (in the TIN field) is the one issued by the jurisdiction of your residence and not the TIN issued by the Spanish authorities (the NIF).
Therefore, the TINs to be completed on form 289, being those issued by the country or jurisdiction of the person or entity not resident in Spain, must conform to the structure established in that country or jurisdiction.
For these purposes, you can access the portals for consulting the information of each country in relation to the issuing, obtaining and, where applicable, structure and operation of the corresponding TIN, through the section "Web portals for validation of TIN (NIF)" of Form 289, which can be found in the AEAT E-Office, the link to which is:
In accordance with provisions of section 2 letter d) of the Annex of Royal Decree 1021/2015, the declaration of tax residence (declaration of the account holder) must contain a NIF.Thus, for the purpose of complying with the obligation of article 3 of Royal Decree 1021/2015, the determining of the tax residence of Persons who hold the control by means of a declaration of this type requires the Financial Institution to obtain the NIF (if it has been issued).
In order to complete the information relating to the address of persons or entities not resident in Spain, the financial institution must proceed as follows, regardless of whether the information is in free or structured format:
You must fill in the correct address at the jurisdiction in which you are resident in application of the due diligence rules.
It shall always be completed with correct data that corresponds to the full address provided by the person who holds or controls certain financial accounts.
Therefore, should not include alphanumeric characters or words (***, 000, zzzz, nnn, among others) that do not constitute or form part of the actual address of the holder or person exercising control.
The obligation to provide information regarding the address is established in article 5.1 a) of Royal Decree 1021/2015, of 13 November, and the address associated with each of the accounts subject to disclosure must be provided.The specific details of the information to be provided can be found in number 18 of Annex III of Order HAP/1695/2016.As indicated in the Technical Manual for the submission of Form 289, this information should be reported:
At structured format, through the fields provided for that purpose, or
In free format, if the structured format is not possible or when the fields of the latter do not reflect all the casuistry of the address in the country of residence of the person or entity not resident in Spain that holds the ownership or control.
The Technical Manual for filing Form 289, which is available at the AEAT E-Office in the section "Information on filing Form 289 via Web Service", can be accessed via the following link:
In accordance with the OECD Common Reporting Standard for the Automatic Exchange of Financial Information, there is no general obligation to carry out a manual search of this type.The general requirement in this procedure is that the address is based on documentary evidence.If the Financial Institution has kept an entry of the documentary evidence in which the address is provided or it has policies and procedures in force to guarantee that the updated address is the same as the address stated in the provided documentary evidence, it will have complied with the requirement that the address is based on documentary evidence.
Yes.The situation may arise in which the Financial Institution has two addresses that comply with the requirements of this procedure. For example, in the event that the account holder works and lives half the year in country A and the other half in country B.In this case, a tax declaration can be requested from the account holder or it could be considered that the account holder is the tax resident of both countries A and B.
The outline for the presentation of Form 289 CRS, based on the outline of the OECD, is prepared to declare several tax residences, if required.
The Financial Institution is not obliged to provide tax advice to its clients or to carry out a legal analysis to verify the reasonableness of the declaration of tax residence.The Financial Institution can rely on the declaration of tax residence of the client unless it is aware, or may be aware that it is incorrect or not reliable ("reasonableness" test), which is based on the information obtained on the opening of the account, including any document obtained in the application of the procedures foreseen in accordance with Act 10/2010, of 28 April, on the prevention of money laundering and terrorist financing and its implementing regulations.
In the Comments of the OECD Automatic Exchange of Information Standard you will find examples of the application of the "reasonableness" test.
Declarations of tax residence must comply with the requirements set forth in section 2 of Section I of the Annex of Royal Decree 1021/2015.Regarding the form in which this must be carried out, in accordance with this precept, any form is accepted, including electronic and telephone channels, provided that the Financial Institution holds and keeps records of its content and date of issue and can accredit if it has been carried out by the account holder or the representative to this effect.
This requirement will be considered not met when the holder, in order to open the account, is obliged to provide the Financial Institution with new, additional or amended information on the same as a result of a legal, statutory, contractual or similar obligation.(See Comment 82 of Section VIII of the OECD Common Reporting Standard).
When entering or not entering this value in Form 289, it should be borne in mind that:
- The account number is not limited to IBAN or ISIN codes, but may be different depending on the category of financial account concerned.
- Only if the financial institution does not have any unique identifier, functional equivalent or numbering that would enable it to identify the reported financial account, should the characters "NANUM" be entered.
- If "NANUM" was entered because the information is aggregated by customer in its databases, the financial institution must provide the identification numbers of the accounts individually considered as this aggregation is not correct in accordance with the applicable regulations.
In short, the use of the value "NANUM", should be considered exceptional and should only be used in cases where the financial institution does not have the identification code of the financial account in question.
The normative basis for the above can be found in the following paragraphs:
Article 5.1.b) of Royal Decree 1021/2015, of 13 November, which establishes the obligation to identify the tax residence of persons who hold ownership or control of certain financial accounts and to report on them in the field of mutual assistance, when determining the information to be provided in respect of each of the accounts to be declared, inter alia, includes the following:"b) The account number."
Similarly, the Orden HAP/1695/2016, of 25 October, which approves form 289, for the annual informative declaration of financial accounts in the field of mutual assistance, and which modifies other tax regulations, in Annex III, section 7, the content of the declaration includes:
'7. Account number, indicating whether this is an IBAN or other bank account number, an ISIN code or other securities identification number, or another identifier such as an insurance contract reference number.Where the declared financial account has an IBAN or ISIN code, this code must be entered on Form 289.
Account number means, as set out in section E of Section VIII of the Annex to Royal Decree 1021/2015:
'6.Account number" means the identification number assigned by the financial institution to distinguish it from other accounts held at the financial institution, including an equivalent functional element.
Therefore, the account number is not limited to IBAN or ISIN codes, but can be different depending on the category of financial account, and only in case no unique identifier of the declared financial account is available, the characters "NANUM" (no account number) should be entered.
According to the Second Additional Provision of Royal Decree 1021/2015 its rules are to be interpreted in accordance with the OECD Commentary to the Model Competent Authority Agreement and the Common Reporting Standard, in whose Annex 3 "User Guide to the Common Reporting Standard", section IVd.Account Number is specified:
"The account number used by the Financial Institution to identify the account in question shall be provided.If the Financial Institution does not have an account number, the functional equivalent used by the Financial Institution to identify the account shall be provided.Mandatory for financial institutions with account numbers (including alphanumeric identifiers).
For example:The account number can be that of a Custodial Account or a Deposit Account;(ii) the code (ISIN or other) relating to a Debt or Equity Unit (if not held in a Custodial Account), or (iii) the identification code of a Cash Value Insurance Contract or an Annuity Contract.
In exceptional cases, where no account numbering system exists, "NANUM" shall be used to indicate the absence of the account number, as it is a Validation element.This account number format is the same as that covered by FATCA and can be used for both structured and free format account numbers.A non-standard account identifier or insurance contract number may also be included in this field'.
Finally, in the event that they have not provided an account number because they have submitted the information aggregated by customer, in accordance with the applicable regulations, they should provide the identifying numbers of the accounts individually considered, the aggregation by customer not being correct.
A substantial number of jurisdictions offer "Citizenship by Investment" (CBI) and "Residency by Investment" (RBI) schemes and allow foreign individuals to obtain citizenship or temporary or permanent residency rights on the basis of local investments.
CBI/RBI schemes can be misused to undermine CRS due diligence procedures.This may result in inaccurate or incomplete reporting under the CRS, in particular when not all jurisdictions of tax residence are disclosed to the Financial Institution.
Such a scenario could arise where a person is not actually resident or not only resident in the CBI / RBI jurisdiction, but declares himself resident for tax purposes only in that jurisdiction and provides his financial institution with supporting documentation issued under the CBI / RBI scheme (e.g., a certificate of residence, identity card or passport).
Not all RBI / CBI schemes present a high risk of being used to circumvent the CRS.Schemes that are potentially high risk for these purposes are those that give the taxpayer access to a personal income tax rate of less than 10% on offshore financial assets and do not require a significant physical presence of at least 90 days in the jurisdiction offering the CBI / RBI Scheme.
Where CBI/RBI schemes meet both criteria, but the residency documentation provided to successful applicants is clearly identified as being issued under the respective CBI/RBI scheme, such specific residency documentation should only be perceived as potentially high risk in the context of CRS due diligence procedures, and subject to the additional guidance for financial institutions, detailed below.
These schemes and the corresponding residency documentation are listed in the table below.
Name of the CBI/RBI scheme
|Panama||Reforestation investor permit||Panamanian identification cards with reference code "PRP-FOR".|
|Panama||Economic solvency permit||Panamanian identification cards with reference code "PRP-SEP".|
|Panama||Permission from friendly nations||Panamanian identification cards with reference code "PRP-PA".|
Under Section VII of the CRS, a financial institution may not rely on a self-certification or documentary evidence if the financial institution knows, or has reason to know, that the self-certification or documentary evidence is incorrect or unreliable.The same applies with respect to high value pre-existing accounts where a relationship manager has actual knowledge that self-certification or documentary evidence is incorrect or unreliable.
In determining whether a financial institution has reason to know that a self-certification or documentary evidence is incorrect or unreliable, it should take into account all relevant information available to the financial institution, including the results of the OECD CBI/RBI risk analysis.As a result, where, taking into account all relevant information, the facts and circumstances would lead the Financial Institution to have doubts about the tax residence(s) of an Account Holder or the Person exercising control of the Account Holder, it should take appropriate steps to determine the residence of such persons.
To the extent that the doubt relates to the fact that the account holder or person in control of the account is accredited as residing in a jurisdiction that offers a potentially high-risk CBI/RBI scheme, financial institutions may consider asking further questions, including:
- Did you obtain residence rights under a CBI / RBI scheme?
- Do you have residence rights in any other jurisdiction(s)?
- Have you spent more than 90 days in other jurisdictions during the previous year?
- In which jurisdiction(s) have you filed your personal income tax returns during the previous year?
The answers to the above questions should assist financial institutions in determining whether the self-certification provided or documentary evidence is incorrect or unreliable.
In no case shall accounts owned or controlled by persons whose sole jurisdiction of tax residence is Spain be included in Form 289, even if they are undocumented accounts in respect of which the financial institution must or may know that the ownership or control of such accounts corresponds to a tax resident in Spain.
In cases where an “undocumented financial account” is involved, all the information available to the financial institution at that time shall be indicated for as long as this remains the case.In no case shall accounts owned or controlled by persons whose sole jurisdiction of tax residence is Spain be included in Form 289.
This shall apply generally and in particular in the following cases:
- Pre-existing accounts of lesser value of natural persons (paragraph B.5 of Section III of the Annex to Royal Decree 1021/2015):If the financial institution does not apply the address procedure and the only evidence discovered in the electronic search procedure to determine tax residence was an instruction to hold correspondence or an address for the receipt of correspondence, provided that subsequently no evidence could be obtained through the paper search either and the attempt to obtain a declaration or documentary evidence from the account holder to determine their tax residence is unsuccessful.This procedure should be repeated when there is a change of circumstances or when the account acquires high-value account status.However, the account will have to be declared with all the information available every year as long as these circumstances prevail.
Pre-existing accounts of higher value of natural persons (paragraph C.5 c) of Section III of the Annex to Royal Decree 1021/2015):Where the only evidence discovered in the enhanced scrutiny of these accounts to determine the tax residence of the account holder was an instruction to withhold correspondence or an address for the receipt of correspondence, provided that it was not subsequently possible to obtain a declaration or documentary evidence to determine the tax residence of the account holder.The financial institution must apply the enhanced review procedures of the Royal Decree each year until the account is documented.However, the account will have to be declared with all the information available every year as long as these circumstances prevail.
In the event that on the last day of the calendar year in question, an account is blocked in application of Section 5 of the 22nd Additional Provision of Law 58/2003, of 17 December, on General Taxation and provided that there is no information available regarding the country of residence of the person who holds or controls the account, all of the above and without prejudice to the financial institution continuing to try to obtain the tax returns that may be required.
Yes, it is required.
As a consequence of the amendment of Article 4 of RD 1021/2015, of 13 November (RD of CRS), Order HAP/1695/2016, of 25 October, of Form 289, is also amended to include the obligation to submit the informative return Form 289 even in cases of non-existence of accounts to be reported by the financial institution obliged to report after the application of the due diligence rules.
In these new cases of tax returns for accounts without communication, the content of Form 289 is limited to the concepts included in numbers 1 to 5 of Annex III of Order HAP/1695/2016, as well as the new concept introduced by the present order "6.2.Tax return with no accounts to report” (*).
To facilitate the filing of Form 289 "without accounts to report", a simple Form has been enabled and will be available at the e-Office.
However, this filing can also be made via the already enabled Web Service.More information:
Pursuant to the provisions of Article 5.1 d) of Royal Decree 1021/2015 of 13 November, which establishes the obligation to identify the tax residence of persons who hold or control certain financial accounts and to report on them in the field of mutual assistance, among the information to be provided for each of the accounts subject to reporting must be included the balance or value of the account at the end of the calendar year under consideration.In the case of a cash value insurance contract or an annuity contract, the cash value or surrender value is taken.
Without prejudice to how the cash value is to be determined in accordance with the definition provided in Section VIII.C.8 of the Annex to Royal Decree 1021/2015, pursuant to Section VIII. C. 6 and 8 of the aforementioned Royal Decree, both in the annuity contract and in the insurance contract with cash value, for the purposes of calculating the balance or value of the financial account, the financial institution obliged to report information may use, where appropriate, the capitalisation value or the surrender value referred to in Order EHA/3481/2008, of 1 December, which approves form 189 of the annual informative declaration regarding securities, insurance and income.
For these purposes, Law 11/2021 of 9 July on measures to prevent and combat tax fraud, transposing Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, amending various tax rules and on the regulation of gambling, has amended Article 17 of Law 19/1991 of 6 June on Wealth Tax, relating to Life Insurance and temporary or life annuities to which Order EHA/3481/2008 refers, in accordance with the following wording to be taken into consideration, where appropriate, for the purposes of determining the surrender or capitalisation value:
One.Life insurance policies shall be computed at their surrender value at the time of accrual of the tax.
However, in cases where the policyholder does not have the right to exercise the right of full surrender on the date on which the tax is due, the insurance shall be computed for the value of the mathematical provision on the said date in the policyholder's taxable base.
The provisions of in the preceding paragraph shall not apply to temporary insurance contracts which only include benefits in the event of death or disability or other supplementary risk guarantees.
Two.Temporary or life annuities, constituted as a consequence of the delivery of a capital sum in money, movable or immovable property, must be computed at their capitalisation value on the date of accrual of the tax, applying the same rules as for the constitution of pensions established in the Tax on Transfer of Assets and Stamp Duty.
However, when annuities, temporary or life annuities, are received from life insurance, these shall be computed at the value established in section One of this article.".