On 5 February 2020, Spain's Official State Gazette published Royal Decree-Law 3/2020, dated 4 February, on urgent measures passed by the Spanish Government, including the transposition of various directives of the European Union into the Spanish legal system in specific sectors; private insurance; pension plans and funds; tax and tax disputes.
This is an extensive rule that transposes several European Union directives that were pending introduction into our legal system in Spain.
In this respect, we would like to highlight new developments introduced in the area of Value Added Tax and in relation to the mutual agreement procedures.
The European Commission's so-called "Quick Fixes" for intra-Community VAT transactions have now entered into force
With regard to the VAT measures, Spanish VAT Act and VAT regulations have been amended in order to implement the so-called "Quick Fixes", by established uniform rules at a Communitary level in order to:
(i) introduce a simplified standard applicable to the Call-Off Stock regime to avoid the registration of the supplier in the country of destination of the goods;
(ii) determine the intra-community delivery in the so-called supply chain sales, by linking intra-community transport to a specific sale;
(iii) require the recipient's VAT Number and the report in Form 349 as substantive requirements to apply the exemption in intra-community deliveries;
(iv) establish common rules as to the required means of evidences to prove the existence of intra-community transport.
The first three measures will enter into force on March 1, 2020, while the fourth took effect on February 6.
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Transposition of the Directive on the Mechanisms for Resolving Tax Disputes in the European UnionMutual Agreement Procedures and Arbitration
The Royal Decree amends Non-Resident Income Tax (IRNR), in order to transpose Council Directive 2017/1852, dated 10 October 2017, on the mechanisms for resolving tax disputes in the European Union, which standardises the framework for resolving Mutual Agreements Procedures and strengthens the legal certainty thereof.
In line with the Directive, the new provision of the IRNR establishes that access to the dispute resolution procedure may be denied in cases where there have been penalties imposed for tax fraud, deliberate nonpayment, or gross negligence. It likewise establishes that while Mutual Agreement Procedures are being processed, delay interest shall be payable as from the date the Royal Decree enters into force.
The new provision establishes a preeminence of the Mutual Agreement Procedure over national proceedings, with the exception of those cases in which penalties have been challenged.
Spain's Central Tax Court is established as the competent authority to hear matters regarding the constitution and operation of the advisory commission. In addition, the law regulating the Courts of Administrative Justice has also been amended, with the aim of adapting it to the new provisions.
In general, the aforementioned legislative changes entered into force on 6 February 2020.