Confianz

Categoría: News

  • How the new 15% supplementary tax works

    Since January 2024, Spain has been applying a new minimum supplementary tax of 15%, which is a crucial measure in the era of economic globalisation. It is especially aimed at large multinational companies and its purpose is to guarantee a minimum level of taxation at a global level.

    An international initiative to combat tax evasion

    In fact, the implementation of this new tax is part of an international effort to combat tax evasion by large companies and to establish a fairer tax framework at the international level. 138 OECD countries have reached a pact that in the EU has materialised through the 2022 Directive that all Member States must apply since 1 January.

    In Spain, the Tax Agency has configured this tax as a new tax that complements corporate income tax.

    830 companies affected in Spain

    The new supplementary tax will be levied both on multinational companies and their subsidiaries in Spain and on large national groups with a turnover of 750 million euros or more in at least two of the last four financial years and taxed at a rate of less than 15%.

    It is estimated that the new tax affects a total of 830 companies in Spain, both national and international. The vast majority, 707, are foreign multinationals with subsidiaries in Spain. 113 are Spanish multinational companies of which 41 are taxed below 15% (at an average rate of 6.21%) and 109 have subsidiaries abroad that are also taxed below 15% (average rate of 5.14%). In addition, the supplementary tax also affects 10 national groups that are taxed at an effective average rate of 9.2%.

    How it works

    While corporate income tax is levied on the taxable base, this new supplementary tax is levied on the accounting result. In other words, income minus expenses.

    However, the Draft Supplementary Tax Bill allows for adjustments to reflect «the significant permanent differences that typically exist in most tax systems between accounting profit and the tax base of a tax on corporate profits».

    The supplementary tax is configured through two taxes:

    • The primary supplementary tax. This is the general rule or income inclusion rule. It is levied on multinationals or large groups based in Spain whose subsidiaries abroad are under-taxed.
    • The secondary supplementary tax. This is the closing rule or insufficiently taxed profits rule. It establishes that in the event that a company has a parent company in a country that does not have this complementary tax, «Spain, as the country of residence of the Spanish subsidiaries of that foreign parent company, has the right to collect the complementary tax corresponding to the Spanish subsidiaries».

    Entry into force and derogations

    We said at the beginning that the supplementary tax came into force on 1 January last. This is true for the primary supplementary tax. However, in the case of the secondary tax it will enter into force for tax periods starting from 31 December 2024.

    Furthermore, the Treasury recognises the complexity of this new tax and for this reason foresees the exceptional case of being able to get rid of the tax during 2023 and 2026 if certain requirements are met in the information contained in the country-by-country report.

    Nor will the tax be applied during the first five years to groups undergoing internationalisation or to companies with a turnover in excess of 750 million and which therefore become taxable under the new tax.

    The Confianz tax consultancy team can help you avoid errors in the application of this tax.

  • We continue to consolidate our growth in the Expansion Ranking 2023

    During a 2023 full of opportunities and challenges – why not say it – Confianz has continued to strengthen its position in Spain’s competitive legal market. It is with great pride that we announce our advancement in the prestigious Ranking of Expansion 2023, which highlights the most relevant law firms in the country in terms of turnover and growth. During this year we have increased our turnover by a remarkable 8.7% and expanded our headcount, reflecting our adaptation and proactive response to market dynamics.

    This achievement transcends mere numbers; it is a testament to our focused and adaptive strategy and unwavering dedication to our clients. Our team has worked tirelessly to deliver innovative and effective legal solutions, cementing the trust our clients place in us.

    The year 2023 has been particularly significant due to the challenges we continue to face globally. However, our philosophy of perseverance and commitment to Confianz’ core principles have enabled us to achieve this new success.

    Thank you for being with us on this path to excellence. Your trust is what really defines and drives us.

  • BEPI: how the employer can claim the benefit of exoneration of unsatisfied liabilities

    Within the insolvency field, the Benefit of Exoneration of Unsatisfied Liabilities or BEPI is a legal tool that provides relief to entrepreneurs (and any natural person in general) who find themselves in a situation of insolvency. With it, the entrepreneur can be totally or partially released from debts that he or she is unable to pay, provided that the established requirements are met. Thus, the BEPI represents an exception to the principle of universal patrimonial liability of the debtor established in Article 1911 of the Civil Code, which states that the debtor is liable with all his present and future assets for the fulfilment of his obligations.

    Objective of the BEPI

    The purpose of the BEPI is, as stated in the Explanatory Memorandum of the Second Chance Law: «to allow a natural person, despite a business or personal economic failure, to have the possibility to get his or her life back on track and even to risk new initiatives, without having to carry around indefinitely a burden of debt that he or she will never be able to pay off».

    How does BEPI work?

    The BEPI is regulated in Articles 486 to 502 of Royal Legislative Decree 1/2020 of 5 May and has two possible modalities or regimes:

    • General or immediate payment regime: this involves the payment at the same time of a minimum amount of credits with the income generated by the liquidation of the debtor’s attachable assets.
    • Special Regime or subject to a payment plan: allows an initial partial exoneration of unsatisfied debts. Subsequently, the debtor must comply with a deferred payment plan approved by the insolvency judge.

    Eligibility for the benefit of exoneration of unsatisfied liabilities

    Subjective requirement: requirement of good faith

    As mentioned above, the debtor-entrepreneur can only qualify for the benefit of the waiver of unsatisfied liabilities if he has acted in good faith. To prove this, two conditions must be met:

    – The insolvency proceedings must not have been declared guilty. In practice, this requirement means that the BEPI can only be applied for once the debtor has already tried to resolve his payment difficulties by all means. In addition, he has had to prove that the insolvency proceedings are fortuitous. This is intended to provide maximum guarantees for creditors. The only exception foreseen for this condition is that the insolvency proceedings have been declared guilty because the debtor has failed to comply with the duty to apply for the declaration of insolvency in a timely manner. In this case, depending on the circumstances of the delay, the judicial authority may grant the BEPI.

    – The debtor has not been convicted of offences related to dishonesty in business activity in the ten years prior to the declaration of insolvency proceedings. This includes offences against assets, against the socio-economic order, forgery of documents, against the Public Treasury and Social Security or against workers’ rights.

    Objective requirements

    As for the objective requirements, in order to obtain the benefit of exoneration of unsatisfied liabilities, it is necessary:

    • That in the insolvency proceedings all claims against the insolvency estate and privileged insolvency claims have been paid in full.
    • The debtor has concluded or attempted to conclude an out-of-court payment agreement with the creditors. Even if the agreement is not reached, is not complied with, is annulled or is terminated early for a reason not attributable to the debtor’s wilful misconduct or negligence. Only if the out-of-court payment agreement is terminated due to the debtor’s withdrawal will it be deemed not to have been attempted. Even in this case, the entrepreneur still has a chance to obtain the BEPI if in the insolvency proceedings he has satisfied the claims against the insolvency estate, the privileged claims and at least 25% of the ordinary insolvency claims.

    If you are an entrepreneur and you are facing insolvency proceedings, Confianz can advise you so that you do not put your personal assets at risk.

  • How to professionalise the family business without conflict

    In the family business there are three concepts that are constantly intertwined: ownership, company and family. The three have much in common, but they are also separated by many divergences. Not the least of these are emotional differences. For this reason, professionalising relations within family businesses and bringing in external professional experts is the first step towards leaving personal and family emotions behind, so that there is a difference between a family meal and a shareholders’ meeting. Making this separation allows more rational decisions to be made.

    The relationship between professionals and ownership

    Professionalisation is one of the great challenges that family businesses usually face from the second generation onwards. On the one hand, it is essential, but on the other hand, it can be a source of internal conflict.

    It is clear that being a member of a business family does not automatically give you the training and skills needed to manage a company. Therefore, as the company grows, it must delegate the management of finances, human resources, marketing, R&D, etc. to competent professionals. Despite possible reluctance within the family, entrusting part of the development and even leadership of the project to competent outsiders brings great benefits and new points of view to the family business.

    Professionalise management with an external administrator from outside the family

    In fact, it is even possible to delegate the entire management of the family business to professional administrators from outside the family. This is a frequent possibility in the case of unexpected deaths or even when the natural successors are not interested in taking over the company.

    These professional directors are subject to personal liability, which is enforceable not only by the company but also by third parties. This is the same as in any commercial company. This is a potential source of conflict, because the owner can give the professional director orders at the general meeting which he is obliged to comply with, but for the result of which he is responsible.

    There are also common conflicts of interest in companies that opt for professional management. For example, when part of the family wants to distribute dividends and the professional administrator, on the other hand, considers it a priority to strengthen the treasury in order to undertake a certain investment.

    Professional managers are not spared from this kind of tension. Because business families are not only present on the board of directors as owners of the company. They often also exercise their management on the board of directors. Pressure can even come from outside the company. From family members who are partners but do not hold a position within the company.

    Avoiding conflicts between the business family and external professionals

    Every business family is made up of diverse individuals, perhaps many, each with their own personal visions and goals. But to make the business profitable and continue to grow generation after generation, it is vital to create a shared vision of the ‘collective self’, to align personal interests with corporate interests.

    The family protocol can be a useful tool to help minimise conflicts. Because they mark the roadmap to be followed at key moments such as the succession process or the progressive incorporation of new generations into the company. They also determine the role of each member and their relationship with the company.

    One thing that all successful and long-lived family businesses have in common is that they have trained their new generations and have opted to professionalise the management of the company in key areas.

  • Startups and M&A: why sell and buy

    M&A transactions involving start-ups and emerging businesses of all types offer advantages for both start-ups and investors.

    Why it is in the interest of an established company to invest in the merger or acquisition of a startup

    Both to grow and to diversify the product portfolio. Acquiring an emerging business is an excellent way to stay competitive and stimulate a company’s growth quickly and efficiently. For example, acquiring startups can enable them to offer new solutions and services to their customers. This can quickly increase sales while saving on product development costs.

    Established companies are looking to stay at the cutting edge of innovation. And acquiring a startup is a way of both acquiring new technologies and knowledge and keeping in touch with emerging trends.

    For startups, it is a way to recoup invested capital and make a profit

    Mergers and acquisitions (M&A) are one of the ways for startup founders and investors to materialise their divestment process in order to recoup their invested capital and make a profit. The other common way of harvesting or exiting is by selling shares in an initial public offering (IPO) or IPO. In this article, we will focus on M&A transactions, which in the case of emerging companies are usually carried out when their value has increased due to their growth.

    Other reasons why a startup may undertake an M&A strategy are: to reduce costs, boost its commercial activity, diversify its product portfolio, improve its market share, increase its bargaining power, access new countries or sectors… In any case, these operations can be carried out between companies in the same sector or between companies operating in different markets.

    Advantages 

    One of the advantages of this strategy from the startup investors’ point of view is that it avoids the risk of going public and not finding a buyer for the shares. A merger or acquisition is a sure way to get rid of the shares.

    Disadvantages

    From the point of view of the founders of a start-up company, entering into an M&A transaction means losing control of the company.

    In addition, during the integration process the company faces a thorough investigation by potential buyers. This includes conducting at least one due diligence. In this process it is essential to provide sensitive data, which can result in a leakage of information that poses a fatal risk. To prevent any leakage of information, we recommend always signing a confidentiality agreement between both parties.

    Due diligence is an audit of the company’s financial records. Its purpose is to corroborate that there are no errors or incidents in the accounts and to recognise possible contingencies and opportunities. This is an analysis that usually lasts for a month and is generally carried out by independent external consultants.

    The importance of being decisive

    After reaching an agreement, it is vital that the changes and restructuring necessary to implement the merger or takeover are implemented as soon as possible. In this way, the benefits of the agreement can begin to be reaped as soon as possible.

    In the M&A process of a startup, it is advisable to have the support of a specialist advisor. At Confianz we are prepared to accompany and advise you throughout this process.

  • Companies must make public their gender pay gap

    The European Commission has set out to promote pay transparency and the principle of equal pay for men and women. This strategy is legally articulated through Directive 2023/970 of the European Parliament and of the Council of 10 May 2023. Once transposed into Spanish law, this new regulation will oblige companies to share information on the remuneration received by women and men for the same work or for work of equal value in their organisation.

    Equal pay laws in Spain

    In recent years, a number of regulations on equal pay have been published in Spain. Specifically, Royal Decree 902/2020 of 13 October on equal pay for women and men implements issues set out in Royal Decree Law 6/2019 of 1 March on urgent measures to guarantee equal work and equal opportunities for women and men in employment and occupation.

    In line with the European strategy, this Royal Decree is based on two principles:

    • Equal pay for work of equal value.
    • Pay transparency through a series of instruments: a register with information disaggregated by sex, job classification and type of pay; a company audit that includes job evaluation; a plan to correct inequalities; and a job evaluation system that allows for a real comparison between jobs of equal value.

    6 changes to equal pay rules introduced by Directive 2023/970

    However, the transposition of Directive 2023/970, to be effective by 7 June 2026, will require adjustments to Spanish legislation:

    1.- The scope of application shall be extended to job applicants during the selection process. Job applicants shall have the right to receive information on the starting pay for the position for which they are applying, as well as on the collective agreement applied. The employer may not ask questions about the applicant’s salary history.

    2.- The pay gap shall be publicly available on the company’s website or any other means of dissemination.

    3.- The average pay gap between workers is reduced from 25% to 5%, after which the company must justify that the difference between the two genders is due to neutral criteria.

    4.- There will continue to be compensatory and dissuasive compensations for the damages that workers may have suffered as a result of non-compliance with the principle of equal pay. The great novelty is that these compensations may not be capped or consist of fixed amounts. At present, it is a widespread procedural practice in Spain to use the penalties provided for in the Law on Social Order Infringements and Penalties as a scale for these damages.

    5.- The limitation period for cases of discrimination due to differences in pay may not be less than three years. It is currently one year.

    6.- The possibility remains open that the social partners may be responsible for the application of this Directive, especially with regard to the tools or methodologies that measure the value of work in the terms of the Directive, and with regard to possible fines or financial penalties.

    Awaiting transposition

    In short, the transposition of Directive 2023/970 of the European Parliament and of the Council of 10 May 2023 into Spanish law will imply the appearance of new legal obligations that companies will have to comply with as early as mid-2026.

  • How the special tax regime for mergers and spin-offs works

    Mergers and spin-offs are very complex business operations in accounting and tax terms. In this article we will try to list their main particularities so that you can take them into account from the beginning of the negotiations.

    What is a corporate merger?

    Merger is the process by which two different companies are brought together, transferred en bloc and become a single new company.

    They must therefore initiate a dissolution process without liquidation whereby the two initial companies cease to exist, but neither the inventory nor their assets are sold. Because these will be used to create the new company.

    What is a corporate spin-off?

    A spin-off is the opposite of a merger. It is an operation whereby an entity divides its entire corporate assets and transfers them en bloc to two or more companies. In this case, the final companies may be new or existing companies.

    As in the case of a merger, the company is also dissolved without liquidation in the case of a demerger.

    Tax regime for mergers and spin-offs

    The special regime for mergers and spin-offs is set out in Law 27/2014, of 27 November, on Corporate Income Tax. The main points of this regime are outlined below.

    Income derived from the transfer

    The income derived from mergers and spin-offs that are the result of the following will not be included, i.e. will not be taxed in the tax base:

    • Transfers carried out by entities resident in Spanish territory;
    • Permanent establishments in EU and non-EU states in favour of entities resident in Spanish territory;
    • The transfer of items that are assigned to a permanent establishment located in Spanish territory.

    Tax valuation of the shares or units received as consideration for the contribution 

    The shares or holdings received shall be valued, for tax purposes, at the same tax value as the branch of activity or the assets and liabilities contributed.

    Tax valuation of acquired assets

    The assets and rights acquired shall be valued at the same values they had in the company where they were generated, before the merger or spin-off operation was carried out. In the resulting company, the acquisition date of the transferring entity shall be maintained.

    Taxation of partners

    Provided that the shareholders are resident in Spain or in another EU Member State, the income derived from the attribution of securities from the acquiring entity to the shareholders of the transferring entity will not be included in the tax base. Likewise, they will not be included if the shareholders are resident in a non-EU country if the securities are representative of the share capital of an entity resident in Spanish territory.

    Securities received are valued at the tax value of those delivered, determined in accordance with corporate income tax, personal income tax or non-resident income tax rules, as applicable.

    Fraud and tax havens

    The regime does not apply where the transaction is not carried out for valid economic reasons, but with the intention of obtaining a tax advantage and committing tax evasion or avoidance. In this case the effects of the tax advantage arising from the merger or spin-off will be eliminated.

    Lastly, it should be noted that income obtained in transactions involving entities domiciled or established in tax havens will be included in the taxable base for corporate income tax, personal income tax or non-resident income tax purposes.

    This is a general guide to the special tax regime for mergers and spin-offs. However, the regulations are full of exceptions and special cases. In these cases, the advice of a law firm specialised in M&A and taxation is essential.

  • Confianz consolidates its position in the Chambers Europe 2024 Ranking

    At Confianz, we believe in excellence as the basis for every project we undertake. That is why receiving, for the third consecutive year, Chambers and Partners’ recognition in the «Corporate/M&A Mid-Market» category for the year 2024, fills us with pride and gratitude. For us, this achievement reflects the trust and continued support of our clients and the tireless efforts of our team.

    Thank you very much!

  • Veri*factu Regulation: these are the requirements to be met by the new electronic invoices

    Royal Decree 1007/2023, of 5 December (BOE of 6 December), approves the so-called Veri*Factu Regulation, the technical regulation that implements the provisions of Law 11/2021 on measures to prevent and combat tax fraud with regard to invoicing processes.

    This regulation establishes the requirements to be adopted by the computer or electronic systems and programmes that support the invoicing processes of companies and the self-employed. All taxpayers must have computer systems adapted to the required characteristics and requirements in place by 1 July 2025. The only exception will be taxpayers who keep their books of records through the AEAT e-Office by means of the electronic supply of invoicing records (SII).

    The transition from traditional to digital invoicing is a transition that requires careful planning. Because it involves allocating adequate technical resources, reorganising internal procedures and thorough staff training. In this article we explain the basic conditions to be met.

    Objective of the Veri*Factu Regulation

    The aim of the Veri*Factu Regulation is to ensure the standardisation of invoicing systems and software. It also prevents the alteration of invoices and simplified invoices once they have been issued.

    IT resources required:

    Taxpayers have several options for complying with the new obligations:

    • A proprietary computer system. This must have a written declaration of responsibility issued by the manufacturer or developer certifying that the software and hardware comply with the standards. In addition, this declaration shall include a description of the computer system and the characteristics of the installation.
    • A computer system shared between several taxpayers. Indeed, the only condition is that the invoicing records of each of them are differentiated and meet the requirements individually.
    • In the future, the computer application that the tax administration may develop for this purpose.

    Requirements for computerised invoicing systems

    In addition, computerised invoicing systems should:

    • Ensure the integrity, preservation, accessibility, readability, traceability, and unalterability of billing records.
    • Have the capacity to send all invoicing records electronically to the Tax Administration. Provided that it is continuous, secure, correct, complete, automatic, consecutive, instantaneous and reliable.
    • To have an event log that automatically records certain interactions with the computer system. Also operations performed with it or events occurring during its use.
    • Locate access to any possible confidential non-patrimonial information in a dissociated manner. Thus, the tax administration will be able to directly access the consultation of invoicing and event records.

    Invoice requirements 

    In summary, each billing record or invoice should include:

    • The tax identification number and name and surname, name or company name.
    • The invoice number.
    • The date of issue and the date on which the transactions documented therein were carried out.
    • The type of invoice issued: full or simplified.
    • The general description of the operations.
    • The total amount of the invoice.
    • Value Added Tax or other levies.
    • Electronic signature.

    Although it still represents a major challenge, especially for SMEs, e-invoicing is gradually spreading. In short: it is about to become the new standard for commercial transactions. Therefore, if you have any doubts about its implementation, the tax and commercial law specialists at Confianz can help you.

  • Alternatives to insolvency proceedings: restructuring plans and sale of the production unit

    Insolvency proceedings are not the only option available to a company facing insolvency difficulties. Restructuring plans before and the sale of the production unit after the insolvency proceedings are two options to be considered in order to achieve the company’s continuity.

    In this article we analyse the pros and cons of these alternatives to insolvency proceedings, a solution that still unfairly suffers a great deal of negative stigma and is often seen more as a way to dismantle the business than as a tool for its survival after a difficult transitional period.

    Restructuring plans: the pre-bankruptcy option

    The latest insolvency reform gives great weight to restructuring plans, consisting of pre-insolvency agreements of the debtor with its creditors or of the creditors and binding on the debtor. However, in the time that the new rules have been applied, successful restructuring plans have been scarce in comparison with the number of insolvency proceedings.

    This is primarily because restructuring plans face a number of constraints:

    • The court’s protection periods for debtors are short, so it is necessary to act quickly.
    • They cannot affect labour credits or practically public credits, which affect the majority of Spanish companies in insolvency. The most common situation is that companies in difficulties are in a situation of non-payment of debts with the AEAT, TGSS and salaries.
    • They involve a significant investment in the services of lawyers and restructuring experts, whose fees are not regulated.

    In any case, the pre-bankruptcy mechanism of debt restructuring through a restructuring plan is an option to be taken into account due to its viability for medium and large companies.

    Sale of the production unit in liquidation: the post-bankruptcy option

    When the insolvency proceedings fail and the insolvency agreement is not approved, there is still the possibility of selling the production unit in liquidation. This is an option that has grown significantly in the last year.

    The sale of the production unit is a judicial procedure whereby all the assets inherent to an economic activity (material means, machinery, intangible assets, employees, etc.) are sold. The buyer does not assume the company’s debts prior to the transfer, whether they are bankruptcy debts or debts against the insolvency estate. The liabilities remain with the insolvent company unless the purchasers of the production unit are partners, administrators or relatives of the insolvent company.

    Conditions for selling the production unit

    The conditions for the sale of the production unit are as follows:

    • The company has to be operational.
    • The sales proposal should be public in order to get the best possible offer.

    What is a production unit

    It is essential to identify and delimit the scope of the production unit to be transferred. A production unit is understood as an economic entity with a set of means organised for the purpose of carrying out an essential or ancillary economic activity.

    Therefore, with the sale of the production unit we can save part of the company, that which is profitable.

    When to sell the production unit

    In reality, the possibility of selling the production unit is not limited to the moment of liquidation of the insolvency proceedings. It can also be done in the common phase of the insolvency proceedings and even in the application itself. This must include a binding written proposal for the purchase by a creditor or third party. The aim should always be to take measures to save the company as soon as possible, at an early stage. If your company is in insolvency difficulties, please contact us as soon as possible for personalised advice.