Financial entities. Royal Decree-Law 14/2013, of November 29, on urgent measures to adapt Spanish law to European Union law on the supervision and solvency of financial entities. (BOE 287, November 30, 2013)

European Union law on the supervision and solvency of financial entities (Basel III) has been incorporated into Spanish law.

The most noteworthy measure aims to avoid the regulatory capital of credit entities being affected, from January 1, 2014, by application of the European regulations on the solvency of credit institutions, which have materialized in the form of an amendment of the regulatory taxation rules for company tax affecting credit institutions and other payers of this tax.

With retroactive effect for tax periods starting January 1, 2011, deferred tax assets (“DTAs”) resulting from positive tax adjustments derived from the insolvency risk coverage and contributions to social security schemes will be included in the taxable base of company tax, with the same tax base limit as before inclusion of the DTAs and before offsetting negative tax bases.

From January 1, 2014, several solvency obligations applicable to credit institutions and investment service  companies will be enforceable. Financial credit establishments are no longer considered credit institutions and DTAs can continue to be calculated as capital, in line with current regulation in other EU Member States.

The provisions concerning corporate governance will be enforceable from June 30, 2014.