For many years, a long list of multinational groups have offered share-based incentives to their employees. In this context the compensation is often paid by an entity (the entity offering the incentive, which is usually the group’s parent company) that is not the employer. Sometimes the payer (parent company) does not charge the cost of the compensation to the subsidiary employing the worker.

In ruling V2197-18, dated July 24, 2018, the Directorate-General for Taxes examined exactly this case involving a French parent company that had implemented plans awarding shares at no cost to certain senior managers and salaried employees of the various companies belonging to the group, including employees of a Spanish subsidiary.

  • EU law/questions of interpretation.- National courts have obligation to refer questions of interpretation of the Treaty on the Functioning of the European Union
  • State aid.- A tax is an integral part of state aid where it is collected exclusively and fully to grant the aid
  • Personal income tax.- Maternity benefit is exempt from personal income tax
  • VAT.- VAT on share purchase costs is deductible
  • Transfer and stamp tax.- Only one stamp tax charge when horizontal property established and condominium dissolved in one transaction
  • Transfer and stamp tax.- Transfer of share in tenancy in common to another tenant in common is not an exempt excess allocation if tenancy in common is not dissolved
  • Tax on large retail establishments.- Tax on large retail establishments is lawful
  • Financial liability of the state.- Basque provincial governments not required to indemnify companies for refund of aid equal to 45% of investments
  • Audit procedure.- Orders for entry and search by Tax Agency officials must be sufficiently reasoned
  • Audit procedure.- If a reassessment has effects on other non-audited years, tax authorities must correct returns
  • Personal income tax.- Continuous residence test to claim exemption for reinvestment in principal residence must be met from when ownership obtained
  • VAT.- Rate applicable to repair work on residential properties caused by insured losses varies according to who is the customer
  • Transfer and stamp tax.- Stamp tax base in declarations of new construction is construction cost
  • Special taxes.- Forfeiture of right to exemption or to reduced rate in cases of procedural breaches is not automatic
  • Management procedure.- TEAC adopts Supreme Court interpretation that assessment of property values cannot consist of increasing cadastral value by multiplier
  • Information requests.- Information requests made to bar associations in relation to members’ fees are lawful
  • Corporate income tax.- Brexit is a valid economic reason for applying the tax neutrality regime
  • Corporate income tax.- Hotel business carried on through investee is not line of business
  • Corporate income tax.- Distribution of additional paid-in capital qualifies for exemption under article 21
  • Personal income tax.- Directors not eligible for certain personal income tax exemptions
  • Personal income tax, VAT and wealth tax.- Clarification of treatment for various taxes of the lease of property with additional services
  • Personal income tax.- Penalty for breaching minimum holding period for pension plan gives rise to loss from movable capital
  • Nonresident income tax.- Severance payments for termination of employment contracts of nonresidents are taxed in Spain for period worked there
  • Tax on economic activities.- An unincorporated joint venture (UTE) carries on an economic activity separate and independent from that of its members
  • Tax amendments to reduce wholesale electricity prices
  • Publication of list of municipalities applying revised cadaster value multipliers approved for 2019
  • Annual equivalent rate approved for fourth calendar quarter of 2018, for the purpose of characterizing certain financial assets for tax purposes
  • Council of the European Union authorizes Spain to reduce exercise tax on electricity for vessels at berth in a port
  • Decision to allow future reduction to VAT rate applicable to electronic publications
  • Publication of draft royal decree amending Spanish Chart of Accounts
  • Publication of first report on conflict in application of the law, regarding leveraged purchases