Spain’s draft bill includes ATAD, tax haven provisions

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November 2018

Overview

The Spanish Ministry of Finance published for public consultation three draft bills on October 23. Two of those tax bills introduce a financial transactions tax and a digital services tax. The third tax bill introduces measures to prevent tax fraud by transposing some of the provisions contained in the EU’s Anti-Tax Avoidance Directive (ATAD), transposing the Directive on Tax Dispute Resolution Mechanisms in the European Union (EU), and broadening the tax haven definition to align it with EU and OECD standards. This Insight discusses the most relevant proposed tax amendments contained in the draft bill that aim to prevent tax fraud.

The takeaway

Multinational enterprises with operations in Spain should review how the proposed changes may affect their investments in Spain. Furthermore, Spanish multinationals should monitor these changes since, if the draft bill is approved, it may require them to consider certain international reorganizations.

Both types of multinationals should also expect introduction of the ATAD measures that are not contained in the draft bill, particularly those dealing with the limitation on interest expense deductions and the anti-hybrid rules.

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Carlos Concha

Partner, PwC US

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