On December 29, 2017, Spain issued Royal Decree 1074/2017 (the “Decree”), introducing amendments, effective for tax periods that begin on or after January 1, 2016, to Article 13 (Information and documentation on companies and related transactions) of Decree No. 634/2015 regarding the submission of country-by-country (CbC) reports. See BEPS Action 13.
Article 13 of Decree No. 634/2015 says that Spanish-resident companies that are the ultimate parent must provide a CbC report. Also, Spanish-resident constituent entities of a non-resident parent must provide the CbC report if any of the following applies:
- They have been designated by the foreign parent company to prepare the CbC report.
- The foreign parent is not required to provide a CbC report in its tax jurisdiction.
- There is no automatic exchange of information agreement with the foreign parent’s tax jurisdiction.
- There has been a systemic breach of an automatic exchange agreement with the foreign parent’s tax jurisdiction, and the Spanish Tax Administration has given notice of this breach to the Spanish-resident constituent entities or permanent establishments.
According to the Decree, Spanish-resident subsidiaries or permanent establishments are not required to provide CbC reports when the multinational group has designated a group constituent entity that is resident in an EU member state to submit the CbC report, or when the report has already been submitted in its territory of fiscal residence by another non-resident entity named by the group as a surrogate entity. The deadline to submit the CbC report is 12 months following the end of the tax period.
Any Spanish-resident entity that is part of a group that is required to submit the CbC report must communicate to the Tax Administration the identification and the country or territory of residence of the entity required to prepare the CbC report. This notification must be made before the end of the tax period to which the CbC report relates.
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