On December 30th, new important tax and fiscal measures came into effect, to be considered for the fiscal end of 2018 and 2019. At the same time, and although they are pending approval at the beginning of the year, the Spanish Budget Act Draft (Proyecto de Ley de Presupuestos Generales del Estado), with significant developments about some of the taxes that affect companies and that will determine the planning of the 2019 financial year. In this context, along this first post we are going to focus on the tax novelties included in the Royal Decree-Law 27/2018 (Real Decreto-ley 27/2018), of December 28th.
Royal Decree-Law 27/2018
The Royal Decree-Law 27/2018 focusses on the Personal Income (Renta de las Personas Físicas) and Corporate Income Tax (Impuesto de Sociedades). It also updates the urban Real Estate value in cadastral terms and specifies the tax regime applicable to the Final 2019 UEFA Champions League and the Final UEFA EURO 2020 incomes.
PERSONAL INCOME TAX
- Social Security Public benefits for maternity and paternity and other groups covered by the Law are declared exempt. Years that haven´t already prescribed are contemplated retroactively. The request for the corresponding refund may be processed at the AEAT.
- Quantitative limits for 2019 tax period –that delimit the objective estimation scope for Personal Income Tax- are extended.
CORPORATE INCOME TAX
Applicable to tax periods from January 1st 2018:
- A Transitional regime to integrate, in equal parts in the taxable base, charges and credits in reserve accounts corresponding to each of the first three tax periods starting from January 1st 2018, as long as they have fiscal effects according to tax regulations.
URBAN REAL ESTATE
- The coefficients for updating the cadastral values of urban real estate for 2019 are approved.
UEFA CHAMPIONS LEAGUE 2019 and UEFA EURO 2020
- Tax regime for the incomes from the Final UEFA Champions League 2019 and UEFA EURO 2020 forseen by the organizers, as well as for legal entities residents in Spanish territory and specially incorporated for such events. The Royal Decree-Law 27/2018 establishes that the income obtained during the event and directly related to all participation in such event will be exempt from the Corporate Income Tax. The same exemption for the Non-Resident Tax, will apply to all permanent establishments set up in Spain for that same reason.
Therefore, it´s important to consider these novelties included in the Royal Decree-Law 27/2018 as well as to consult those foreseen in el Spanish Budget Act Draft in which we will delve into next article.