Category: Ruling/Decisions and case law
Taxation of royalties: the Supreme Court gives primacy to the Directive over agreements
In a recent and controversial judgment, the Supreme Court affirms that when the Interest and Royalties Directive cannot be applied because the recipient of the royalties is not the “beneficial owner”, the withholding tax rate established in the Spanish domestic non-resident income tax regulations must be applied, rather than the reduced rate of the corresponding […]
Review of the requirements for applying the reduced 15% corporate income tax rate to newly incorporated entities carrying out the same activities as their shareholders or related entities
In a recent binding ruling, the Spanish Directorate General for Taxes (Dirección General de Tributos, DGT) concluded that the mere coincidence between the activity carried out by a newly incorporated entity and that previously performed by its shareholders or other entities related to those shareholders is not, in itself, sufficient to deny the application of […]
Tax liability after the recent jurisprudence of the Supreme Court
In various judgments, the Supreme Court insists on the need to prove the guilt of the directors of companies that have committed tax infringements or to inquire into the existence of jointly and severally liable parties before deriving liability to subsidiary liable parties. The Administration has been reacting to the difficulties in the collection of […]
The purchase of real estate property for hotel use is subject to VAT
The High Court of Justice of the Balearic Islands confirms the doctrine of the DGT and the TEAC, according to which, when the transfer concerns only the property itself, without including the organizational structure required to operate the business, the transaction is subject to VAT and not to Property Transfer Tax. The indirect taxation applicable […]
The spanish Supreme Court outlaws the tax authorities’ “third shot”
According to the court, where an assessment is set aside the tax authorities only have a second chance to issue a new administrative measure, regardless of the reasons for ordering it to be set aside. On September 29, 2025, the Supreme Court issued a decisive judgment on second and subsequent assessments by the tax authorities, […]
Residents outside the European Union or the European Economic Area can also deduct expenses from their rental income
The National High Court fully accepts the application of the principle of free movement of capital to third countries for income from real estate leases, although there is no case law of the CJEU for the specific case of this type of income. Tax payers resident in Spain determine the income from real estate capital […]