On July 10, 2019, the presentation of the study promoted by the Fundación Impuestos y Competitividad related to Corporate Income Tax took place at the headquarters of the Center for Political and Constitutional Studies, under the title of Corporate Profit Taxation: Recent Developments, Future Prospects.
The event was chaired by Ms. Ana Sánchez Lamelas, Deputy Director of the Centre, Mr. Maximino Linares Gil, Chairman of the Foundation’s Board of Trustees, and Mr. Jesús Gascón Catalán, Director of the Spanish Tax Administration (AEAT). Mr. Gascón opened the act by reflecting on the current issues affecting corporate taxation, highlighting the technical difficulties in concluding broad-spectrum agreements, within both the EU framework regarding the Common Consolidated Corporate Tax Base and Common Corporate Tax Base proposals, and the inclusive and OECD framework regarding the new criteria concerning the connection and distribution of tax sovereignty.
Management aspects of this concept were also examined, pointing out that the introduction of DAC 6 would probably entail a new design of tax governance among companies; while, emphasising, moreover, that management handled by national administrations with national rules, as opposed to multinational business groups, revealed difficulties and inefficiencies, suggesting the need to explore new ways of resolving conflicts, supporting bilateral or multilateral Advance Pricing Agreements, as well as the possibility of joint verification actions between different administrations, and welcoming initiatives in the arena of the cooperative relations model such as the so-called ICAP (International Compliance Assurance Programme).
The presentation of the book published by the Foundation, which reflects a project undertaken over recent months – supported by the Foundations of the Spanish Banking Association (AEB for its acronym in Spanish) and the Association of Real Estate Developers of Madrid, and Savings Banks – thanks to the work of a long list of collaborators linked to the Board of Trustees or from academia and the Administration, took place during two consecutive round-tables.
The first, moderated by Mr. Ignacio García Alonso (DELOITTE), was attended by Mr. Juan Zornoza Pérez, Professor of Financial and Tax Law (UAM) Mr. Ignacio Ucelay Sanz (BAKER McKENZIE) Mr. Ignacio Quintana Elena (PwC) and Mr. Iñigo Alonso Salcedo (EY) and presented the main lines of the first and second parts of the project, set out in 10 chapters.
The resulting overall assessment of the retrospective analysis and the current corporate income tax scheme, highlighted the fact that the attempt to contribute to tax consolidation, as well as several reforms to that effect, has played a significant role in the evolution of corporate income tax in recent years as well, promoting several reforms with that target. They are logical solutions based on a global consideration of the budgetary crisis, but which, taken as a whole, have significantly affected the current system, triggering tax situations which are not always consistent with the existence of accounting profits, to the extent that they sometimes raise doubts concerning their constitutional status, essentially because tax is levied regardless of the effective ability of companies to contribute, but also because treatment is discriminatory on the basis of income, considering this measure to be insignificant from the viewpoint of the ability to be taxed.
During the assessment of the current regime, a special focus was placed on the issues addressed by the EU Directives, ATAD 1 and ATAD 2, that aim to align the implementation among the Member States regarding the solutions proposed by the BEPS Action Plan; insisting that existing legislation in Spain requires minor changes to ensure the transposition of EU rules, it even being considered advisable that for those situations where the “minimum standards” established by the EU are less onerous than the solutions of Law 27/2014, our regulations should be amended in order to improve our companies’ competitiveness.
The second round-table, moderated by Mr. José Manuel Bunes de Ibarra (DELOITTE), was formed by Ms. Silvia López Ribas (Deputy Director of Taxation for Legal Entities of the Directorate General for Taxation), Mr. Eduardo Sanz Gadea (retired Government Tax Inspector), Mr. Juan López Rodríguez (TAXUD) and Mr. José Ignacio Box García (DELOITTE), and all tried to deal with future proposals concerning corporate profit taxation, which was the purpose of the study in the third part of the book, chapters XI to XVII
The most important proposals of the EU and the OECD were discussed during this round-table, paying special attention to recent proposals on the so-called first pillar, focused on the review of the criteria for the distribution of tax powers among States, and the second pillar, aimed at solving other problems with respect to the BEPS Plan and ensuring a minimum taxation for multinational business groups. This event ended with some observations regarding possible solutions in terms of minimum global taxation, which have recently been the subject of emphatic discussion from the point of view of legal doctrine and by international bodies.