On June 1, the Official Gazette of the Cortes Generales was published Draft Law on measures to prevent and fight tax fraud, transposing Directive (EU) 2016/1164, of the Council, of July 12, 2016, which establishes rules against tax avoidance practices that affect directly in the functioning of the internal market, of modification of various tax regulations and in matters of gambling regulation, more popularly known as "Draft Law against Tax Fraud”. It is not the first - nor the last - Law that will bear this name and I will not bore the reader by listing all the norms that have incorporated such a well-intentioned purpose.
We have read a lot on blogs, LinkedIn or the press about the measures included in said project and, in particular, the more or less accurate criticisms - some more political than technical - on some of the matters that are being reformed. As a common denominator, the reproaches that, from various watchtowers, are being made to the project is that it contains a disguised tax hike; which is a kind of "Counterprogramming" to the jurisprudence of the Supreme Court (TS) that in recent years had not been favorable to the interests of the Public Treasury and, finally, that it seeks to encourage collection to increase through certain Incentives to taxpayers with a supposedly lower tax awareness or who simply decide to appeal the tax penalties with which they do not agree. This will not be the object of this article. We are going to analyze, even succinctly, the opportunities the pre-legislator is missing -Because there is still time to correct them! - to introduce in our legal-tax system certain regulatory provisions that, for more INRI, would be coherent with the spirit manifested in the Statement of Motives of the project and, more specifically, with two wishes already expressed from the first paragraph of the Preamble (one express and the other implicit): adapt Spanish tax regulations to EU law and reduce tax litigation.
Let's go with the first: in the Bill it is said to transpose the so-called Anti-Tax Avoidance Directive ("ATAD" by its Anglo-Saxon acronym), focused on establishing a general anti-abuse rule (“GAAR” for its acronym in English, which we already have in our General Tax Law), a new international tax transparency regime, the treatment of so-called hybrid asymmetries , the limitation of the deductibility of interest and the regulation of the so-called exit tax. However, the project only transposes the new regime of international tax transparency and "Exit tax". First missed opportunity.
It is powerfully striking that the pre-Legislator wasted also the opportunity what the project gives you for remove from our order Article 237, paragraph 3, of the General Tax Law (LGT) that was introduced through a reform carried out in 2015 and allows economic-administrative courts to raise preliminary questions before the Court of Justice of the European Union (CJEU), since This last judicial body, by means of a ruling of January 2020, considered that the Spanish economic-administrative courts they did not have enough independence grades that the ordinary courts of justice have to urge prejudicial dialogue. As if this were not enough, the Supreme Court (TS) has pending to solve a appeal in which it will determine precisely whether, in light of the aforementioned CJEU ruling, it is necessary that those taxpayers who question the conformity to EU law of a national tax are forced to go the economic-administrative review instance as previous and unavoidable step before going to legal aid.
I also know lose the opportunity to introduce -as it already happened in 2010- a exemption (partial or total, depending on the caso) such as the one included in article 14 of the Non-Resident Income Tax Law for investment funds or extra-community pension funds which invest directly in the IBEX without settling in Spain. Much and abundant is the jurisprudence of the CJEU on the matter (casos “Emerging Markets” or “Santander”, for example) that protects the free movement of capital even with countries that are not part of the Union. Furthermore, in the last year and a half we have known dozens of Supreme Court rulings that endorse said community jurisprudence and have granted significant refunds to Canadian pension funds and US investment funds. Wouldn't it be a good opportunity to introduce a specific assumption in our non-resident regulations that is in line with Community case law?
Do not adapt our regulations to this reiterated community jurisprudence will undoubtedly imply increased tax litigation (at least for part of the aforementioned funds) and here I link -and close- with the second of the themes: this project could have been a great opportunity to introduce in our legislation alternative mechanisms resolution of tax disputes other than those already existing and traditional (tax litigation after all) as mediation and / or arbitration in tax matters, decongesting our already overloaded economic-administrative and judicial courts of the thousands of pending matters. Is not something alien to what already exists in neighboring countries like, for example, neighboring Portugal. It was -it is- an occasion Excellent to set them. Hopefully the Legislator see the clear opportunity.
Anthony Bridges Moreno
Partner of the Tax area of BDO.
Article originally published in the Blog Fide en The Confideinitial