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Regulatory changes force companies to be more rigorous in planning for 2018 fiscal closure

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Conference on Fiscal Update: 2018 fiscal close and 2019 legislative updates

Andersen Tax & Legal has warned on the importance of an adequate planning of the 2018 fiscal closing of the Corporate Tax, taking into account the latest administrative and jurisprudential doctrine, in addition to the few changes in the tax regulations for the 2018 fiscal year and the normative changes foreseen in the agreement on the General State Budgets for 2019 or the preliminary drafts of the Law on Prevention and Fight against Fraud, Tax on Financial Transactions or Tax on certain Digital Services.

This was evident during the conference on Fiscal Update: Fiscal Closing 2018 and Legislative Novelties 2019 that Andersen Tax & Legal organized in its offices in Madrid and Valencia, in which the partners of the firm Enrique Vázquez, Miguel Ángel Galán and Paula Caro participated, along with José Rivaya, Coordinating Inspector of the Technical Office of the Regional Inspection Unit of Valencia, and Elena Guerrero, Head of the Regional Inspection Team in the Madrid Delegation.

During his speech, Enrique Vázquez analysed the main issues to be considered for the fiscal year end, such as the rules of temporary imputation, economic activity and patrimonial entities, valuation rules, etc. On this point, he stressed the advantages of tax consolidation, as well as in a recent consultation of the Directorate General of Taxes that analyses a case of a specific distribution of dividends to a holding company and that causes it to have the character of an asset entity.

He went on to explain the regulatory changes envisaged in the agreement on the General State Budget for 2019 or the preliminary drafts of the Law on the Prevention and Fight Against Fraud, Tax on Financial Transactions or Tax on Certain Digital Services. Specifically, it focused on the advantages that the modification of the General Tax Law by the Preliminary Draft Law on the Prevention and Fight against Fraud could entail and, specifically, the section on reductions by Agreed Minutes and the filing of extemporaneous returns. These measures, he said, "may involve an increase in revenue, less conflict and a facility for taxpayers.

For his part, Miguel Ángel Galán explained the reductions in the capitalisation reserve and the updates in the reduction in the transfer of intangibles. He also emphasized the limitations existing in the tax regulations when it comes to offsetting negative tax bases and deductions, while highlighting the few deductions that remain in the rule. At this point, he analysed situations in which the tax is paid despite losses of previous years, especially in the case of large companies, and noted that "the existence of minimum fractioned payments is forcing companies to advance taxes to request their return to file the annual return, which in recent years has forced companies to finance fractioned payments."

Regarding tax benefits applicable to small businesses, Galán explained the regime of small entities and highlighted the possibility of applying the reduced rate of 15% for newly created entities, excepting certain cases in which you can not apply the tax rate for not being new activities or for addressing economic activity.

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