EU: “Spanish Tax System Violates European Rules”
January 28th, 2010
The European Commission has today called on Spain to amend its tax legislation rules that require individuals and entities not resident in the country to appoint a tax representative within the Spanish territory. Brussels believes that certain requirements of the Spanish tax legislation for persons not resident in the country are “discriminatory” and therefore violate European rules.
The EU executive has formally requested Spain to amend those provisions or face infringement proceedings, as announced in a statement. If, in the next two months, the Spanish authorities do not provide a “satisfactory response” to this request, the EC could ask for Spain to be presented before the EU Court of Justice.
Spanish law forces an obligation to appoint a fiscal representative, who is resident in Spain, for pension funds originating in another EU country but that provide pension schemes within Spain, as well as for non-residents who are subject to gift and inheritances tax in Spain. Also subject to this obligation are European insurance companies that operate in Spain and also non-resident entities that operate in Spain through a permanent establishment.
The Commission considers that these requirements “are discriminatory and restrict the free flow of services.”
