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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE

OF INFORMATION FOR TAX PURPOSES

Peer Review Report on the Exchange of Information


on Request

SPAIN
2019 (Second Round)
Global Forum
on Transparency
and Exchange
of Information
for Tax Purposes:
Spain 2019
(Second Round)
PEER REVIEW REPORT ON THE EXCHANGE
OF INFORMATION ON REQUEST

March 2019
(reflecting the legal and regulatory framework
as at December 2018)
This work is published under the responsibility of the Secretary-General of the
OECD. The opinions expressed and arguments employed herein do not
necessarily reflect the official views of OECD member countries or those of the
Global Forum on Transparency and Exchange of Information for Tax Purposes.

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international frontiers and boundaries and to the name of any territory, city or
area.

Please cite this publication as:


OECD (2019), Global Forum on Transparency and Exchange of Information for Tax Purposes:
Spain 2019 (Second Round): Peer Review Report on the Exchange of Information on Request , Global
Forum on Transparency and Exchange of Information for Tax Purposes, OECD Publishing,
Paris.
https://doi.org/10.1787/997a7b23-en

ISBN 978-92-64-62286-9 (print)


ISBN 978-92-64-74532-2 (pdf)

Global Forum on Transparency and Exchange of Information for Tax Purposes


ISSN 2219-4681 (print)
ISSN 2219-469X (online)

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TABLE OF CONTENTS – 3

Table of contents

Reader’s guide����������������������������������������������������������������������������������������������������������� 5

Abbreviations and acronyms����������������������������������������������������������������������������������� 9

Executive summary��������������������������������������������������������������������������������������������������11

Overview of Spain��������������������������������������������������������������������������������������������������� 15

Part A: Availability of information����������������������������������������������������������������������� 23


A.1. Legal and beneficial ownership and identity information����������������������������� 23
A.2. Accounting records��������������������������������������������������������������������������������������� 50
A.3. Banking information������������������������������������������������������������������������������������� 58

Part B: Access to information������������������������������������������������������������������������������� 63


B.1. Competent authority’s ability to obtain and provide information����������������� 63
B.2. Notification requirements, rights, and safeguards ��������������������������������������� 68

Part C: Exchanging information��������������������������������������������������������������������������� 71


C.1. Exchange of information mechanisms����������������������������������������������������������� 71
C.2. Exchange of information mechanisms with all relevant partners����������������� 77
C.3. Confidentiality����������������������������������������������������������������������������������������������� 78
C.4. Rights and safeguards of taxpayers and third parties����������������������������������� 80
C.5. Requesting and providing information in an effective manner��������������������� 82
Annex 1: List of in-text recommendations����������������������������������������������������������� 89
Annex 2: List of Spain’s EOI mechanisms����������������������������������������������������������� 90
Annex 3: Methodology for the review������������������������������������������������������������������� 97
Annex 4: Jurisdiction’s response to the review report ��������������������������������������� 99

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Reader’s guide– 5

Reader’s guide

The Global Forum on Transparency and Exchange of Information for


Tax Purposes (the Global Forum) is the multilateral framework within which
work in the area of tax transparency and exchange of information is carried
out by over 150 jurisdictions that participate in the Global Forum on an equal
footing. The Global Forum is charged with the in-depth monitoring and
peer review of the implementation of the international standards of trans-
parency and exchange of information for tax purposes (both on request and
automatic).

Sources of the Exchange of Information on Request standards and


Methodology for the peer reviews

The international standard of exchange of information on request (EOIR)


is primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, Article 26 of the OECD
Model Tax Convention on Income and on Capital and its commentary
and Article 26 of the United Nations Model Double Taxation Convention
between Developed and Developing Countries and its commentary. The
EOIR standard provides for exchange on request of information foreseeably
relevant for carrying out the provisions of the applicable instrument or to the
administration or enforcement of the domestic tax laws of a requesting juris-
diction. Fishing expeditions are not authorised but all foreseeably relevant
information must be provided, including ownership, accounting and banking
information.
All Global Forum members, as well as non-members that are relevant
to the Global Forum’s work, are assessed through a peer review process for
their implementation of the EOIR standard as set out in the 2016 Terms of
Reference (ToR), which break down the standard into 10 essential elements
under three categories: (A) availability of ownership, accounting and bank-
ing information; (B) access to information by the competent authority; and
(C) exchanging information.

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6 – Reader’s guide

The assessment results in recommendations for improvements where


appropriate and an overall rating of the jurisdiction’s compliance with the
EOIR standard based on:
1. The implementation of the EOIR standard in the legal and regulatory
framework, with each of the element of the standard determined to be
either (i) in place, (ii) in place but certain aspects need improvement,
or (iii) not in place.
2. The implementation of that framework in practice with each element
being rated (i) compliant, (ii) largely compliant, (iii) partially compli-
ant, or (iv) non-compliant.
The response of the assessed jurisdiction to the report is available in an
annex. Reviewed jurisdictions are expected to address any recommendations
made, and progress is monitored by the Global Forum.
A first round of reviews was conducted over 2010-16. The Global Forum
started a second round of reviews in 2016 based on enhanced Terms of
Reference, which notably include new principles agreed in the 2012 update
to Article 26 of the OECD Model Tax Convention and its commentary, the
availability of and access to beneficial ownership information, and complete-
ness and quality of outgoing EOI requests. Clarifications were also made on
a few other aspects of the pre-existing Terms of Reference (on foreign com-
panies, record keeping periods, etc.).
Whereas the first round of reviews was generally conducted in two
phases for assessing the legal and regulatory framework (Phase 1) and EOIR
in practice (Phase 2), the second round of reviews combine both assessment
phases into a single review. For the sake of brevity, on those topics where
there has not been any material change in the assessed jurisdictions or in
the requirements of the Terms of Reference since the first round, the second
round review does not repeat the analysis already conducted. Instead, it sum-
marises the conclusions and includes cross-references to the analysis in the
previous report(s). Information on the Methodology used for this review is set
out in Annex 3 to this report.

Consideration of the Financial Action Task Force Evaluations and


Ratings

The Financial Action Task Force (FATF) evaluates jurisdictions for


compliance with anti-money laundering and combating terrorist financing
(AML/CFT) standards. Its reviews are based on a jurisdiction’s compliance
with 40 different technical recommendations and the effectiveness regarding
11 immediate outcomes, which cover a broad array of money-laundering issues.

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Reader’s guide– 7

The definition of beneficial owner included in the 2012 FATF standards


has been incorporated into elements A.1, A.3 and B.1 of the 2016 ToR. The
2016 ToR also recognises that FATF materials can be relevant for carrying
out EOIR assessments to the extent they deal with the definition of ben-
eficial ownership, as the FATF definition is used in the 2016 ToR (see 2016
ToR, annex 1, part I.D). It is also noted that the purpose for which the FATF
materials have been produced (combating money-laundering and terrorist
financing) is different from the purpose of the EOIR standard (ensuring
effective exchange of information for tax purposes), and care should be taken
to ensure that assessments under the ToR do not evaluate issues that are out-
side the scope of the Global Forum’s mandate.
While on a case-by-case basis an EOIR assessment may take into account
some of the findings made by the FATF, the Global Forum recognises that the
evaluations of the FATF cover issues that are not relevant for the purposes of
ensuring effective exchange of information on beneficial ownership for tax
purposes. In addition, EOIR assessments may find that deficiencies identified
by the FATF do not have an impact on the availability of beneficial ownership
information for tax purposes; for example, because mechanisms other than
those that are relevant for AML/CFT purposes exist within that jurisdiction
to ensure that beneficial ownership information is available for tax purposes.
These differences in the scope of reviews and in the approach used may
result in differing conclusions and ratings.

More information

All reports are published once adopted by the Global Forum. For
more information on the work of the Global Forum on Transparency and
Exchange of Information for Tax Purposes, and for copies of the published
reports, please refer to www.oecd.org/tax/transparency and http://dx.doi.
org/10.1787/2219469x.

PEER REVIEW REPORT – SECOND ROUND – SPAIN © OECD 2019


Abbreviations and acronyms– 9

Abbreviations and acronyms

2010 Terms of Terms of Reference related to EOIR, as approved by


Reference the Global Forum in 2010.
2016 Assessment Assessment Criteria Note, as approved by the Global
Criteria Note Forum on 29-30 October 2015.
2016 Methodology 2016 Methodology for peer reviews and non-member
reviews, as approved by the Global Forum on
29-30 October 2015.
2016 Terms of Terms of Reference related to EOIR, as approved by
Reference the Global Forum on 29-30 October 2015.
AML Anti-Money Laundering
AML/CFT Anti-Money Laundering/Countering the Financing
of Terrorism
AML/CTF Act Law 10 of 2010
CDD Customer Due Diligence
CPA Certified Public Accountant
DNFBP Designated Non-Financial Businesses and Professionals
DTC Double Tax Convention
EOI Exchange of Information
EOIR Exchange Of Information on Request
FATF Financial Action Task Force
Global Forum Global Forum on Transparency and Exchange of
Information for Tax Purposes
KYC Know Your Customer
Multilateral Convention on Mutual Administrative Assistance in
Convention (MAAC) Tax Matters, as amended in 2010

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10 – Abbreviations and acronyms

OCP Notaries’ Centralised Prevention Unit


PRG Peer Review Group of the Global Forum
SEPBLAC The Spanish AML/CFT Supervisor and Financial
Intelligence Unit
TIEA Tax Information Exchange Agreement
TIN Taxpayer Identification Number
VAT Value Added Tax

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Executive summary– 11

Executive summary

1. This second round report analyses implementation by Spain of


the standard of transparency and EOIR for tax purposes against the 2016
Terms of Reference. This includes an assessment of its legal framework as
at 21 December 2018, as well as its operation in practice as it concerns the
handling of EOI requests received during the period of 1 January 2015 to
31 December 2017. This second round report concludes that Spain is rated
Largely Compliant overall. In 2011, the Global Forum similarly evaluated
Spain against the 2010 Terms of Reference and reached an overall rating of
Compliant.
2. The following table shows the comparison of results from the first
and the second round review of Spain’s implementation of the EOIR standard:

First Round Report Second Round


Element (2011) EOIR Report (2018)
A.1 Availability of ownership and identity information C LC
A.2 Availability of accounting information C LC
A.3 Availability of banking information C C
B.1 Access to information C C
B.2 Rights and Safeguards C C
C.1 EOIR Mechanisms C C
C.2 Network of EOIR Mechanisms LC C
C.3 Confidentiality C C
C.4 Rights and safeguards C C
C.5 Quality and timeliness of responses C C
OVERALL RATING C LC

C = Compliant; LC = Largely Compliant; PC = Partially Compliant; NC = Non-Compliant

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12 – Executive summary

Progress made since previous review

3. In 2011, Spain was found to be Compliant with the international


standard of transparency and exchange of information on request. In par-
ticular, the legal and regulatory framework was fully in place to ensure the
availability and access to information on legal ownership of relevant entities,
accounting information and banking information. The only issues identified
in the 2011 Report related to exchange of information mechanisms with all
relevant partners (element C.2 which was rated Largely Compliant). The
negotiation of some exchange of information agreements was stalled for rea-
sons not linked to exchange of information for tax purposes and Spain was
recommended to continue to develop its EOI network to the standard with all
relevant partners.
4. Since the first round review Spain has implemented these recom-
mendations.
5. During the review period, Spain received 1 775 EOI requests from
58 treaty partners and sent 2 014 EOI requests to 74 treaty partners. Spain
provided complete responses to partner EOI requests in 69% of cases within
90 days of receipt and 93% of cases within 180 days of receipt, while 0.1% of
cases took more than one year to provide a complete response.

Key recommendations

6. The main area where improvement is recommended relates to


Spanish system whereby a significant number of non-complying inactive
companies remain with legal personality on the Commercial Registry, as this
may affect the availability of beneficial ownership and accounting records
for these entities.

Overall rating

7. Spain has achieved a rating of Compliant for eight elements (A.3, B.1,
B.2, C.1, C.2, C.3, C.4, C.5), and Largely Compliant for two elements (A.1,
A.2). Spain’s overall rating is Largely Compliant based on a global considera-
tion of Spain’s compliance with the individual elements.
8. This report was approved at the PRG meeting on 14 February 2019
and was adopted by the Global Forum on 15 March. A follow-up report on
the steps undertaken by Spain to address the recommendations in this report
should be sent to the PRG no later than 30 June 2020 and thereafter in accord-
ance with the procedure set out under the 2016 Methodology.

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Executive summary– 13

Summary of determinations, ratings and recommendations

Determinations and Factors underlying


Ratings Recommendations Recommendations
Jurisdictions should ensure that ownership and identity information, including information on
legal and beneficial owners, for all relevant entities and arrangements is available to their
competent authorities (ToR A.1)
The legal and
regulatory framework
is in place
Largely Compliant The large number of inactive Spain should review its system
companies that maintain legal whereby a significant number
personality and do not comply of non-complying inactive
with their filing obligations companies remain with legal
raises concerns that beneficial personality on the Commercial
ownership information might Registry.
not be available in all cases.
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements (ToR A.2)
The legal and
regulatory framework
is in place
Largely Compliant The large number of inactive Spain should review its system
companies that maintain whereby a significant number
legal personality and do of non-complying inactive
not comply with their filing companies remain with legal
obligations raises concerns personality on the Commercial
that accounting records might Registry.
not be available in all cases.
Banking information and beneficial ownership information should be available for all account-
holders (ToR A.3)
The legal and
regulatory framework
is in place
Compliant

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14 – Executive summary

Determinations and Factors underlying


Ratings Recommendations Recommendations
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1)
The legal and regulatory
framework is in place
Compliant
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information (ToR B.2)
The legal and regulatory
framework is in place
Compliant
Exchange of information mechanisms should provide for effective exchange of information
(ToR C.1)
The legal and regulatory
framework is in place
Compliant
The jurisdictions’ network of information exchange mechanisms should cover all relevant
partners (ToR C.2)
The legal and regulatory
framework is in place
Compliant
The jurisdictions’ mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received (ToR C.3)
The legal and regulatory
framework is in place
Compliant
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties (ToR C.4)
The legal and regulatory
framework is in place
Compliant
The jurisdiction should request and provide information under its network of agreements in
an effective manner (ToR C.5)
The legal and regulatory This element involves issues of practice. Accordingly no
framework is in place determination on the legal and regulatory framework has
been made.
Compliant

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Overview of Spain– 15

Overview of Spain

9. This overview provides some basic information about Spain that


serves as context for understanding the analysis in the main body of the
report. It is not intended to be a comprehensive overview of Spain’s legal,
commercial or regulatory systems.

Legal system

10. The Kingdom of Spain is a parliamentary monarchy. The Constitution,


issued in 1978, is the supreme law and provides for the administrative and
political system as well as for the fundamental rights of the Spanish People.
The Constitution is the supreme law against which the validity of all laws and
regulations may be measured. Spain has a civil law system.
11. While the King is the Head of State and the symbol of its unity,
the division of powers is at the core of the Spanish political system. The
government is comprised of the President of the Government (the head of
government) and the Council of Ministers designated by the President. The
legislative power lies with the Parliament (Las Cortes Generales), composed
of the Senate and the Congress of Deputies. Parliamentarians are elected by
universal suffrage; they choose the President of the Government and control
the action of the executive, thus making Spain a parliamentary political
system. Judges and courts are independent of the legislative and executive
branches. The Constitutional Court ensures that the laws and the regulations
of the government are in line with the Constitution.
12. From the political and administrative perspective, Spain is divided
into seventeen Comunidades Autónomas (Autonomous Regions), in addi-
tion to Ceuta and Melilla, which are considered Autonomous Cities. The
Constitution sets the organisational framework of the State. Autonomous
Communities are further regulated through an “autonomy statute” (Estatuto
de Autonomía), which sets out the distribution of powers and responsi-
bilities between the State and each Community. Each community has
wide legislative and executive autonomy, with their own parliaments and
regional governments. The central government of Spain retains exclusive

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16 – Overview of Spain

responsibility for nationality, international relations, external trade, defence,


justice, criminal and commercial law, etc. Autonomous Communities may
assume competencies over matters like the organisation of their institutions
of self/government, health, social assistance. The Spanish Constitutional
Court is the body responsible for resolving conflicts between the State and
the Autonomous Communities regarding their powers.

Tax system

13. There are three tax subsystems in Spain: the state, regional and
local systems. Taxes are accordingly levied by the central Government,
the Autonomous Community governments, and local authorities. There are
special regimes applicable in the Basque Country and Navarra, which are
two Autonomous Communities with special rights recognised in the Spanish
Constitution, but these special regimes have no impact on the availability and
access to tax information.
14. The main state taxes are classified as direct taxes: corporate income
tax, personal income tax, non-residents income tax, capital, and inheritance
and gift tax; and indirect taxes: value added tax (VAT), transfer tax, stamp
duty, excise taxes, and customs duties.
15. The Spanish Tax Agency (AEAT) is the relevant public body at the
Ministry of Economy and Finance, responsible for managing, auditing and
collection of central government taxes. The Spanish system is predominantly
one of self-assessment, with the taxpayer completing a tax return and making
the appropriate payment or receiving the appropriate refund, subject to
review by the tax authorities.
16. Any act performed by the Tax Administration in applying taxes,
or sanctions in case of non-compliance, may be subject to review by an
economic-administrative tribunal, and the decisions thereof barring new
administrative procedures may be subject to review by specialised courts, on
condition that the corresponding appeal is filed.
17. Resident companies and other entities without legal personality such
as pension funds are subject to corporate income tax. The general rate of
corporate income tax is 25%, but there are other rates applicable, e.g. accord-
ing to section 29 of the Corporate Enterprises Act, investment funds with at
least 100 investors are subject to a 1% tax rate and pension funds are taxed at
a rate of 0%. Resident companies are companies incorporated under Spanish
law, companies domiciled in Spain and companies whose place of effective
management is located in Spain. Corporate income tax is levied on the net
aggregate taxable income from all sources of the entities. However, income
from permanent establishments located abroad is exempt, provided that

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Overview of Spain– 17

certain conditions are met. Foreign source dividends are exempt according to
participation exemption provisions. There is a classic double taxation system,
under which corporate income is first taxed in the hands of the company
and dividends are subsequently taxed in the hands of the shareholders at the
appropriate rates. Distributions by resident holding companies “Entidades de
Tenencia de Valores Extranjeros” to non-resident persons, which are attrib-
utable to income obtained by such companies from sources outside Spain
(exempt from tax in Spain), are deemed to be foreign source income and are
also exempt from tax.
18. Domestic or foreign source income derived by non-residents that is
attributable to a permanent establishment situated in Spain is subject to non-
resident income tax. Such income is computed according to the rules of the
Corporate Income Tax Act. A non-resident is deemed to have a permanent
establishment in Spain if, either directly or through a representative with
power of attorney, it maintains premises or places of work where the enter-
prise, either wholly or partly, carries on its business. Non-residents deriving
income that is not attributable to a permanent establishment in Spain are
subject to non-resident income tax on their Spanish-source income.
19. The General Tax Law was amended in December 2011, taking effect
on 1 January 2012, in order to transpose into Spanish national law the EU
2010/24/EU Directive concerning mutual assistance for the recovery of claims
relating to taxes, duties and other measures and the EU 2011/16/Directive.
These amendments cover all assistance actions that the Tax Administration
may request or provide to other States or international entities, including the
exchange of information, simultaneous tax examinations, the presence of tax
representatives, assistance in notification and the recovery of tax claims.

Financial sector

20. Spain has a large financial sector: according to the non-consolidated


national accounts, the total amount of financial assets held by the financial
sector was EUR 4 676 billions at the end of 2017. The activities of the finan-
cial sector in Spain amounted to 3.63% of GDP at market prices in 2017.
21. The following table shows the numbers of the various types of finan-
cial institutions in Spain.

Banks (banks and savings banks) 61


National banks 1
Subsidiaries of foreign banks: Branches of EU credit institutions 78
Subsidiaries of foreign banks: Branches of non EU credit institutions 4
Securities (broker-dealers, dealers and portfolio managers) 314

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18 – Overview of Spain

Insurers (life insurance) 227


Credit co-operatives 63
Credit finance institutions 39
Collective investment 4 698
Pension funds 2 661
Payment entities (MVT) 42
E-money 5
Private equity 415
Bureaux de change See below
Entities licensed to buy and sell foreign currency 14
Entities licensed to buy foreign currency 2 700

22. The Bank of Spain (Banco de España) is the national central bank
and, within the framework of the Single Supervisory Mechanism (SSM),
in force since 4 November 2014 (established by Council Regulation (UE)
1024 of 15 October 2013), it is in charge of the prudential supervision of
the Spanish banking system along with the European Central Bank (ECB).
It is also the supervisor of other financial institutions. These functions are
exercised either independently or within the SSM. The legal basis governing
the supervisory functions of the European Central Bank (ECB) are the SSM
Regulation and the SSM Framework Regulation.
23. The ECB is directly responsible for the prudential supervision of sig-
nificant credit institutions, 1 while the Bank of Spain directly supervises those
considered less significant. On 31 December 2017, the number of Spanish
significant entities groups was 13 and the number of Spanish less significant
entities groups was 69.

AML framework

24. Spain’s AML/CFT Regulatory Framework is contained in the AML/


CFT Act, of 28 April 2010, and its Regulation approved by Royal Decree
304/2014, of 5 May 2014 as amended by Royal Decree Law 11/2018. The
AML/CFT supervisory functions are exercised by SEPBLAC (the AML/CFT
Supervisor and the Spanish FIU). SEPBLAC depends on the Commission
for the Prevention of Money Laundering and Monetary Offences, which is a

1. The status of “significant credit institution” is set out in Article 6(4) or


Article 6(5) (b) of European Council Regulation (EU) No. 1024/2013 of 15 October
2013. “Significance” is determined on the following criteria: (i) size of the financial
institution; (ii) importance for the economy of the European Union or any partici-
pating Member State; and (iii) significance of its cross-border activities.

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Overview of Spain– 19

collegiate body 2 responsible for directing and promoting activities in order to


prevent the use of the financial system and other sectors of economic activ-
ity for the purpose of money laundering and terrorist financing. SEPBLAC’s
supervision covers a wide range of obliged persons; in addition, it co-ordi-
nates its supervisory functions with the prudential supervisors in each sector
in order to ensure effective compliance with obligations imposed under the
AML/CTF Act. To date, three prudential financial supervisors have signed
agreements with the Commission for the Prevention of Money Laundering
and Monetary Offences with the aim to work in collaboration with SEPBLAC
on AML supervision: the Bank of Spain (mainly for banks and payment insti-
tutions), CNMV (for investment institutions) and DGSFP (for life insurance
firms and pension funds).
25. Notaries are obliged persons pursuant to the AML/CFT Act. Notaries
play a central role in the process of incorporation of legal persons, as well as
other transactions, including those related to changes in property, increase of
capital, etc. A notary must obtain information on the ownership structure of
the company and its beneficial owners when acting for it. This information
must be updated on a systematic basis and included in the Notarial central-
ised database called Notaries Sole Index. The Notaries Sole Index is managed
by the Central Prevention Unit (the OCP) of the General Council of Notaries.
According to the AML/CFT Act (Article 27), the OCP is a centralised pre-
vention body with the objective to strengthen and channel the co-operation of
Notaries with the AML/CFT bodies and enforcement forces.
26. The Notaries Sole Index aggregates the information that has been
submitted by notaries. Notaries must ensure that such information corre-
sponds truthfully and exactly to the public documents issued or authorised
by them and this information must be submitted within the dates statutorily
defined by law. The notaries are liable for any discrepancies, as well as for
non-compliance with the deadlines for the submission of the information.
27. The AML/CFT Act transposes to a national level the III Directive
AML/CFT (Directive 2005/60/CE of the European Parliament and of the
Council of 26 October 2005), that inserted into EU law the Recommendations
of the Financial Action Task Force upon their revision in 2003.
28. The adoption of the new FATF Recommendations, in February
2012, lead Spain to issue Royal Decree 304/2014 to incorporate the new

2. The Commission for the Prevention of Money Laundering and Monetary


Offences is composed by Spain’s Secretary of State, who presides over it, and
by representatives of: the Prosecutor’s Office, Ministries and institutions com-
petent in this matter (Police, Civil Guard, Customs, financial and tax Inspection,
Data Protection, National Intelligence Center), supervisory bodies of financial
institutions and Autonomous Regions.

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20 – Overview of Spain

Recommendations into the Spanish AML/CFT framework. Spain also imple-


mented several regulatory initiatives, such as the development of the Financial
Ownership File on savings and securities accounts and fixed term deposits,
which is a unified registry of financial accounts information. Further, since
January 2016, credit institutions must report to SEPBLAC the opening and
cancellation by any individual or legal person of current accounts, savings
accounts, securities accounts and term deposits. Information reported to
SEPBLAC includes the legal and beneficial owner(s) of the account or deposit.
29. On 31 August 2018, the AML/CFT Act was modified by Royal
Decree Law 11/2018 with the purpose to fully incorporate EU Directive
2015/849 into Spanish law. This modification consisted, among others, (i) on
modifying the definition of Beneficial Ownership for trusts (establishing
that obliged entities should identify as beneficial owners of trusts and simi-
lar arrangements the settlor, the trustee(s), the protector(s), the beneficiary
or class of beneficiaries), in order to directly include in the law what was
previously only mentioned in Royal Decree 304/2014, (ii) on increasing the
amount of the sanctions for non compliance with the AML/CTF regime and
(iii) on introducing special registration obligations for TCSPs.

AML evaluation

30. The Fourth Round of Mutual Evaluation of Spain’s compliance with


the AML/CFT standard was conducted in 2014 by FATF. The report provides
a summary of the AML/CFT measures in place in Spain as at the date of the
onsite visit on 21 April to 7 May 2014. The complete assessment report has
been published and is available at www.fatf-gafi.org/media/fatf/documents/
reports/mer4/Mutual-Evaluation-Report-Spain-2014.pdf.
31. The outcomes of the report were positive and resulted in an overall
rating of “largely compliant”. The FATF report concluded that Spain has up-
to-date laws and regulations, which implement the revised FATF Standards,
and is compliant or largely compliant with most of the Recommendations.
Immediate Outcome 5, concerning the implementation rules ensuring avail-
ability of beneficial ownership information in respect to legal entities and
arrangements, was rated as substantial. Spain’s technical compliance with
FATF’s recommendations 10, 24 and 25 was rated as Largely Compliant.
32. At the FATF plenary session of February 2018, “Follow Up of the
2014 MER” was examined and approved. The follow-up report reviewed the
actions taken by Spain to address the deficiencies identified in the 2014 MER
and resulted in an upgrade in the rating of three Recommendations, namely
Recommendations 5 (Targeted financial sanctions related to terrorism and
TF), 16 (Wire transfers), and 39 (Extradition).

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Overview of Spain– 21

Recent developments

33. The General Tax Law was also amended in 2015 to introduce
reporting and due diligence requirements for: (i) the automatic exchange of
information on financial accounts at the Community level (Council Directive
(EU) 2015/2376 of 8 December 2015 – DAC 2-); and (ii) implementing
Spain’s commitment to exchange of information by signing the Multilateral
Competent Authority Agreement (CRS MCAA). These new obligations came
into effect on 1 January 2016. According to these amendments, financial
institutions must identify the place of tax residence of account holders of cer-
tain financial accounts and provide specified information to the Spanish Tax
Authorities. As well, account holders must inform the financial institutions
of their tax residence.
34. On 21 March 2018, Order JUS/319/2018 was issued, requiring all
companies to annually submit a form, identifying their beneficial owners,
to the Commercial Registry when fulfilling the obligation to file annual
accounts.
35. As mentioned in paragraph 29, on 31 August 2018, Royal Decree Law
11/2018 was issued modifying the AML/CTF act with the purpose to fully
incorporate EU Directive 2015/849 into Spanish law.

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Part A: Availability of information– 23

Part A: Availability of information

A.1. Legal and beneficial ownership and identity information


Jurisdictions should ensure that legal and beneficial ownership and identity information
for all relevant entities and arrangements is available to their competent authorities.

36. The 2011 Report concluded that Spain’s legal and regulatory frame-
work ensured the availability of legal ownership information at any time
either from the public authorities (e.g. tax administration, Commercial
Register) or directly from the entities (register of shareholders) or regulated
third parties (banks, public notaries), and some information is also publicly
available. Element A.1 was thus considered to be “in place”.
37. In practice, the 2011 Report did not identify any shortfall in the
implementation of the legal framework relating to the availability of legal
ownership information of entities and arrangements. Accordingly, ele-
ment A.1 was rated compliant.
38. Since the evaluation report was published in 2011, there has not been
any major change in the legal framework examined. In practice, Spain’s
partners are satisfied with the Spanish responses to their legal and beneficial
ownership information requests. Nevertheless, around two thirds of Spanish
companies do not comply with their account filing obligations with the com-
pany registry raising concerns about the availability of up to date beneficial
ownership information in all cases. According to Spain, the reason why
these entities do not comply with filing obligations is that a large number
of the companies that still exist are in fact completely inactive and the Tax
Administration supervises the absence of economic activity on these inactive
entities, on a continuous basis.
39. The tax administration possesses a very comprehensive database that
contains extensive information on taxpayers, thanks to the annual tax returns
filed by the taxpayers themselves, but also periodic tax information returns sent
by third parties like the Commercial Register, public notaries, banks and other
financial entities, business partners (goods and services suppliers), insurance
companies, CIVs, the Dirección General de Transacciones Exteriores, treaty

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24 – Part A: Availability of information

partners, Dirección General del Catastro (inmovable property). The tax admin-
istration knows the identity of the founding partners of commercial companies
and it annually receives information on the identity of shareholders holding 5%
or more of shares in the capital of commercial companies (1% for listed com-
panies). It may also obtain the identity of all the shareholders of a SA (public
limited companies) either from the company itself (registry of shareholders) or
from the financial institution that manages its shares.
40. However, companies and partnerships’ compliance with their annual
account filing obligation is low. The CIT return filing rate is also low com-
pared with the number of registered entities; although many of these have
reported their total cessation of business or have their TIN removed.
41. Beneficial ownership information is a new aspect of the 2016 ToR
and had not been assessed in 2011. The legal framework in Spain contains a
number of measures relating to the identification of beneficial owners of legal
entities and arrangements. The availability of information on the beneficial
owners of commercial entities is secured in Spain by Notaries, Financial
institutions and the Commercial Registry, among other sources.
42. The main requirements for ensuring availability of beneficial owner-
ship information are contained in the AML Framework. All relevant entities
are required to engage a notary in order to obtain a legal status and, in most
cases, any subsequent change in their ownership has to be done with an
engagement of a notary. Notaries are required to identify beneficial owners
and this information is compiled in a national notarial index. However, the
index does not contain information on all relevant entities. In addition, compa-
nies and partnerships have to engage in a business relationship with financial
institution (which are AML obliged persons), as one of the essential docu-
ments for the registration of any entity is the funds deposit certificate showing
that company’s capital has been deposited in a financial institution. These
already existing obligations have been recently accompanied by the obligation
of entities themselves to keep beneficial ownership information and, since
31 July 2018, entities have to annually submit beneficial ownership informa-
tion to the Commercial Registry when submitting their annual accounts.
43. Supervision of AML obligations is generally adequate to ensure
availability of beneficial ownership information in practice. The responsible
supervisory authorities undertake a range of supervisory measures includ-
ing risk based off-site and on-site inspections and rigorously apply a variety
of enforcement measures in cases of failure to identify and keep beneficial
ownership information. However, supervisory activities in the case of nota-
ries, TCSPs and lawyers should be strengthened. Also, the large number of
inactive companies that maintain legal personality and do not comply with
their filing obligations raises concerns that beneficial ownership information
might not be available in all cases.

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Part A: Availability of information– 25

44. Spanish law allows public limited companies to issue bearer shares.
There may be a few cases in which the tax administration may not be aware
of the owners of these shares, but their issuance and transfer has been strictly
regulated for more than 75 years (except from the period 1989-98), and cur-
rently no one can derive income or capital gains from bearer shares without
being identified by the tax administration.
45. The table of determinations and ratings is as follows:

Legal and Regulatory Framework


Deficiencies identified Underlying Factor Recommendations
in the implementation
of the legal and
regulatory framework
Determination: In place
Practical Implementation of the standard
Deficiencies identified Underlying Factor Recommendations
in the implementation The large number of Spain should review
of EOIR in practice inactive companies its system whereby a
that maintain legal significant number of
personality and do non-complying inactive
not comply with their companies remain with
filing obligations raises legal personality on the
concerns that beneficial Commercial Registry.
ownership information
might not be available in
all cases.
Rating: Largely Compliant

A.1.1. Availability of legal and beneficial ownership information


for companies
46. As already described in the 2011 Report, Spanish law provides for
three types of companies:
• Sociedad de responsabilidad limitada (SRL or SL for sociedad limi-
tada, Limited Liability Company) is a commercial company formed
by one or several members not personally liable for the company’s
debts; they only bear losses up to the amount of their contribution.
The minimum capital of these companies is EUR 3 000 (articles 1, 4
and 12 of the Corporate Enterprises Act). This is the most common
type of entity in Spain.

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26 – Part A: Availability of information

• Sociedad anónima (SA, Joint Stock Company or Public Limited


Company) is constituted between one or more shareholders not per-
sonally liable for the company’s debts; they only bear losses up to the
amount of their contribution. Shares are represented by certificates
or book entries, and where share certificates are issued, by-laws
must specify whether they represent registered or bearer shares
and whether the issue of multiple share certificates is envisaged.
The minimum capital is EUR 60 100 (articles 1, 4, 12 and 23 of the
Corporate Enterprises Act). The shares of an SA can be listed on an
official securities market (section 495).
• Sociedad comanditaria por acciones (S.Com. por A. or SCA,
Partnership Limited by Shares) is formed by one or more general
partners, who are traders and are indefinitely and jointly liable for
the partnership’s debts, and limited partners, who are shareholders
and bear losses only up to the amount of their contributions (article 1
of the Corporate Enterprises Act). This type of company is scarcely
used (none have been created over the last four years).
47. The following table provides statistics on the number of companies
registered with the Commercial Registry:

Company statistics

Statistics as at Statistics as at Statistics as at


Type of company Governing law December 2015 December 2016 December 2017
Limited liability companies (SRL) Corporate Enterprises Act 2 693 082 2 768 738 2 836 759
Joint stock companies (SA) Corporate Enterprises Act 321 128 319 277 317 222
Partnership Limited by Shares (SCA) Corporate Enterprises Act 119 123 130

48. According to the information provided by the Registrars Professional


Association, at the end of calendar year 2017, SRLs corresponded to 87.8%
of all Spanish companies and partnerships and SA to 9.6% of all Spanish
companies and partnerships.
49. Foreign corporations can carry out business activities in Spain as a
branch. At the end of calendar year 2017, there was a total of 1 423 branches
of foreign companies registered in Spain. Branches of foreign companies
and permanent establishments must comply with the same tax obligations
as Spanish companies, including filing CIT returns and obtaining a TIN.
Additionally, branches of foreign companies must annually deposit annual
accounts with the Commercial Registry. Finally, the administrator of the
branch and of the permanent establishment must obtain beneficial ownership
information in accordance with 9.1 of the Royal Decree 304/2014.

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Part A: Availability of information– 27

50. The 2011 Report concluded that ownership information in respect of


companies, including foreign companies with a sufficient nexus, was required
to be available in line with the standard and that these rules are properly
implemented to ensure availability of ownership information in practice.
There are no changes in the relevant rules or practices since the first round
review.
51. Under the 2016 ToR, beneficial ownership on companies should be
available. Availability of beneficial ownership information is required in line
with the standard under the AML framework supported by obligations under
the tax law and commercial law. The main source of information on benefi-
cial owners are AML obliged service providers and in particular notaries
along with banks and other financial institutions. Notaries must be engaged
upon incorporation of a company in Spain and for the majority of subsequent
changes in ownership. Further, companies are now also required to keep
information on beneficial owners and file it annually with the Commercial
Register. Supervision of AML obligations is generally adequate to ensure
availability of beneficial ownership in practice (see below).
52. Companies have to be incorporated through a public deed granted
by a notary. The incorporation public deed has to be registered in the
Commercial Registry within two months following the issuance of the public
deed. Companies only acquire legal personality when the incorporation
public deed is registered on the commercial registry.
53. In addition, tax regulations impose the obligation on any new entity
to request a Tax Identification Number (TIN) and to register on the Tax
Census with the Tax Administration. Normally, the Notary in charge of the
incorporation public deed will request directly from the Tax Administration,
by electronic means, a provisional TIN for the entity. This TIN will be
provisional until the entity files with the tax administration the public deed
of incorporation and the certificate of registration before the Commercial
Registry. If six months elapse from the time the provisional TIN was
assigned and no proof of registration is provided, the Tax Administration
may notify the company requesting that proof of registration and unattended
requirements may lead to the revocation of the TIN.
54. For a TIN to be assigned, the company must communicate its corpo-
rate name, registered office, legal form, date of incorporation, capital stock
and complete data of its fiscal representatives.
55. The following table shows the numbers of companies and partner-
ships registered in the Tax Census held by the Tax Administration at the end
of 2017.

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28 – Part A: Availability of information

Tax census statistics

Type of entity Entities registered on the Tax Census


Public Limited Company (SA) 358 222
Limited Liability Company (SRL) 2 502 534
General Partnership 2 427
Limited Partnership and Limited Partnership with 423
a share capital (SCA)

56. In order to ensure that all companies have a TIN and are registered
in the Tax Census, the notaries and the Commercial Registry have to provide
monthly reports to the Tax Administration detailing information in relation
to companies’ incorporation and liquidation. The difference in number of
companies registered (SRL and SA) in the Commercial Registry and in the
Tax Census is due, among others reasons, to: (i) entities that were assigned
a provisional TIN during its incorporation process, but the definitive TIN is
never assigned, (ii) entities that had their TIN removed and therefore are not
included in the tax census, (iii) entities that are dissolved and liquidated but
this information is not communicated to the Tax Administration. According
to the Spanish authorities, the following actions are being taken in order to
resolve the discrepancies:
• In the case of entities with a provisional TIN, that do not obtain a
permanent TIN: Compulsory documentation is requested by the Tax
Administration in order to obtain a permanent TIN. If the entity
does not provide the documentation, the provisional TIN would be
removed. When there is a provisional TIN, communication would be
sent to financial institutions in order to block the entity’s accounts.
• In the case of entities with a removed TIN: This kind of entity is
included in the Tax Census in the category of “deregistered in the
Entities Index and with TIN removed”. In case that these entities
carry out or intend to carry out any operation, information should be
gathered due to the connection with the TIN number, allowing the
detection of any economic indicia.
• In the case of entities dissolved and liquidated where this informa-
tion has not been communicated to the Tax Administration: There is
ongoing co-operation between the Tax Agency and the Mercantile
Registry in order to address these cases.

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Part A: Availability of information– 29

57. The following table 3 shows a summary of the legal requirements to


maintain legal and beneficial ownership information in respect of companies:

Type Company law Tax law AML law


Limited Liability Company Legal – all Legal – some Legal – all
Beneficial – none Beneficial – none Beneficial – all
Public Limited Company Legal – all Legal – some Legal – all
Beneficial – none Beneficial – none Beneficial – all
Partnership Limited by Shares Legal – all Legal – some Legal – all
Beneficial – none Beneficial – none Beneficial – all

Legal ownership
58. As discussed in the 2011 Report, legal ownership information is
available through a number of existing mechanisms in Spain’s laws.
59. The identity of all the founding members of a company is disclosed
in the deed of incorporation that has to be submitted to the Commercial
Register within two months of its creation. The deed must also include the
contributions made by each of the founders (whether individuals or corpora-
tions), and their respective number of shares.
60. The issuance of the public deed of incorporation requires the inter-
vention of a Spanish public notary, who usually takes care of registering the
company with the Commercial Register and the tax administration, even
though that obligation remains on the founders and managers who are jointly
liable for damages caused by them for breach of this obligation.
61. Public notaries must periodically (monthly and annually) inform the
tax administration the number of new incorporated companies.
62. The public deed of incorporation does not have to be amended on a
change of shareholders except in the case of a SCA, whose managing part-
ners, as members indefinitely and jointly liable for the SCA’s debts, must
always be identified (section 23 of the Corporate Enterprises Act). In the case
of SRL, the transfer of its property (“stakes”) has to be done through a public
deed before a notary.

3. The table shows each type of company and whether the various rules applicable
require availability of information for “all” such entities, “some” or “none”. “All”
in this context means that every company of this type is required to maintain
ownership information in line with the standard and that there are sanctions and
appropriate retention periods. “Some” in this context means that a company will
be required to maintain a portion of this information under applicable law.

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30 – Part A: Availability of information

63. Notaries have to report to the Tax administration changes on the deed
of incorporation of a company, changes of general partners of an SCA or a
change of an SRL member. Section 42(1) of the General Regulation on Tax
Auditing requires that public notaries report annually the transfer of SRL
shares, specifying the full name, domicile and TIN of buyers and sellers,
shares involved in the transaction, date and amount of the transaction and
income derived.
64. Additionally, all companies are required to register with the Tax
Administration to obtain a TIN when companies are created. To obtain a
TIN, the company shall provide to the Tax Administration the name and the
TIN of all the founders of the company (section 7 and 12 of Royal Decree
1065/2007). There is no obligation to report to the Tax Administration a
change in the company’s legal owners, but companies are required to report
annually to the Tax Administration (on the Corporate Income Tax return)
the identity of persons owning at least 5% of their capital (1% if it is publicly
traded company).
65. Regarding the information required to be kept by the company, the
rules are different for shares of SRLs, and shares of SA and SCA.
66. An SRL must keep a shareholders ledger that contains records of the
original shareholders and subsequent share transfers, as well as the creation
of rights ad rem or other encumbrances thereon. Only the parties entered
in such ledger are acknowledged by the company to be shareholders. The
ledger must indicate their identity and address (section 104 of the Corporate
Enterprises Act). The ledger must be kept throughout the lifetime of the
company, and the ledger of liquidated companies is sent to the Commercial
Register. SRLs cannot issue bearer shares.
67. SA (joint-stock companies) and SCA (partnerships limited by shares)
shares are represented by certificates of title or book entries (i.e. dematerial-
ised or immobilised), and where share certificates are issued, by-laws must
specify whether they represent registered or bearer shares. Registered shares
must be entered in a ledger, which records subsequent share transfers, includ-
ing the name, surname, company name, nationality and address of subsequent
holders (section 116 of the Corporate Enterprises Act). The managers of the
company must enter the transfer of shares in the ledger immediately (sec-
tion 120 Corporate Enterprises Act).
68. The shares of an SA and SCA can also be represented in the form
of book entries (i.e. dematerialised) maintained by financial intermediaries,
in which case they are governed by the provisions of the securities market
regulations. The financial intermediary must maintain the identity of the
account owners (sections 118 and 497 of the Corporate Enterprises Act). In
addition, shareholders of SAs and SCAs that are listed on the Stock Exchange

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Part A: Availability of information– 31

are obliged to communicate the acquisition or transfer of significant amounts


of shares to the issuer and the National Securities Market Commission
(CNMV), i.e. when the percentage of shares reaches, exceeds or goes below
certain thresholds, starting from 3%.
69. Sanctions apply for failure to register deeds of incorporation with the
registry. The Commercial Registry verifies the form of the deeds registered
(i.e. they check whether the documents are complete). If the documents are
not compliant, they are not registered, and the company does not acquire
legal personality. New companies have 2 months to register the deed of incor-
poration with the registry; any late registration of documents incurs a fine.
(section 32 and 33 of the Corporate Enterprises Act). The Spanish authorities
report that in practice registrations are usually made within the deadlines, as
it is this formality that confers rights and protection on the company and on
partners.
70. The Registrars assess the legality of the documents to be registered,
the capacity of the persons subscribing them and the validity of the con-
tent. The Notaries, as part of their public function, assess the accuracy and
certainty of the data included in the Public document (obtain, verify and
record the data concerning every act or contract to be authorised by them).
In practice, notaries collate the information and check it against official
databases. The quality of the work of notaries is audited by OCP (the Central
Prevention Unit of the General Council of Notaries), notably with regard to
the conservation of proofs of identity. During the review period, all the reg-
istered Notaries (there are 2 758 registered in Spain) were supervised by the
OCP on the fulfilment of their AML/CFT obligations and, following a risked
based approach, 82 notaries were selected to undergo in situ inspections by
the OCP. On the in situ inspection, the OCP inspectors check the notary’s
compliance with AML/CFT obligations and the accurate uploading of infor-
mation to Notaries database. Once the process has ended a final report is
drafted in order to be approved and afterwards sent to SEPBLAC, for its
follow-up. There is no comprehensive public information available regarding
disciplinary sanctions by the OCP, nor on formal warnings, but the Spanish
authorities indicate that ethical rules are well respected by the notaries.
71. With regard to the shareholders ledger held by the company itself,
the directors of the company are liable for its accuracy. The Commercial
Framework does not specify any deadlines for recording transfers of shares
in the register, although their ownership is established by being entered in
the register. Hence, being registered in the ledger is a requirement to receive
dividends and to exercise voting rights. Checking whether the registers of
shareholders or partners are properly kept is one of the elements that are
checked in the course of a tax audit.

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32 – Part A: Availability of information

72. Additionally, since 2014, companies and partnerships have to send an


electronic copy of the ledger to the Commercial Registry in order for it to be
considered as legalised (section 18 of Act 14/2013 and section 5 of Instrucción
of 12 February 2015). If there was any change in the legal ownership during
a financial year, the companies and partnerships have to send telemetrically,
within the four months after the end of any financial year, the updated copy
of the ledger. Entries in this record ledger shall include complete identifica-
tion of the shareholders, their nationality and address. If the ledger is not
legalised, it does not have public trust and can be refused as evidence in a
trial before a judge. There are no statistics on the compliance of companies
and partnerships with this obligation.
73. Compliance with annual accounts filing requirements at the cor-
porate registry, consisting of accounts with additional forms covering
non-financial matters, is very low with around two thirds of companies sys-
tematically failing to file their annual returns.
74. The Tax Administration monitors compliance with the filing of
Corporate Income Tax returns and record keeping. During the review period,
control actions were undertaken by the Tax Administration to ensure compli-
ance, including the removal of TINs. Nevertheless as explained further in the
section on inactive entities the compliance rate with CIT return filing obli-
gations is low, at approximately 57%; although many of these have reported
their total cessation of business (740 290 SRL and 23 643 SA) or have their
TIN removed (289 654 entities) (see paragraphs 116 and 118).
75. During the current review period, Spain received a significant number
of requests for legal ownership information and, in general, Spain was able to
obtain the requested information and exchanged it with the requesting partner.
The input provided by the peers was positive and no concerns were raised
regarding Spain’s ability to exchange legal ownership information.

Beneficial ownership
76. The 2016 Terms of Reference introduced the obligation to ensure
that information about beneficial owners is available. This element was not
specifically assessed in the 2011 Report, even though it was addressed (see in
particular paragraphs 72-73). In Spain, the main requirements on availability
of information on beneficial owners are set out in the anti-money laundering
legislation.
77. The definition of beneficial owner (section 4 AML/CFT Act and
section 8 of Royal Decree 304/2014) is in line with the beneficial ownership
definition under the 2016 ToR. According to Spain’s AML/CFT Act, a ben-
eficial owner is: “the natural person(s): (a) on whose behalf the relationship
is to be established or the transaction conducted; (b) who ultimately owns

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Part A: Availability of information– 33

or controls (direct or indirect) 25% or more of the capital or voting rights or


who, by other means exercises control, directly or indirectly controls, over
the management of a legal person; or (c) who owns or controls 25% or more
of the property of a legal arrangement, or, where the beneficiaries have yet to
be determined, the class of persons in whose interest the legal arrangement is
set up”. Royal Decree 304/2014 includes additional detail, such as section 8,
which contains the obligation to identify the senior managing official in
cases where no natural person is identified under the definition of beneficial
owner set out above. In the case of trusts (and similar arrangements), there is
a specific provision in section 9.5 of Royal Decree 304/2014, 4 which requires
obliged persons to identify, as beneficial owners, the settlor, the trustee(s), the
protector(s), the beneficiary or class of beneficiaries, and any other natural
person exercising control over the trust. For other relevant legal arrangements
(including fiducias), the person(s) holding equivalent or similar positions in
the case of trusts must be identified.
78. According to section 9.1 of the Royal Decree 304/2014, in order
to allow the correct determination of the beneficial owner of an entity, the
administrators of all entities shall “obtain and maintain appropriate, accurate
and updated information on the beneficial ownership thereof”.
79. The scope of obliged persons, subject to know-your-customer and
record-keeping requirements, in Spain is listed in article 2 of the AML/CTF
Act. It includes:
“a) Credit institutions.
b) Insurance companies authorised to operate in the field of life
insurance and insurance brokers acting in connection with life
insurance or other investment related-services, with the excep-
tions laid down in the regulations.
c) Investment services firms.

4. “Article 9. Identification of the beneficial owner: (…) 5. In relation to Anglo-


Saxon trusts, obliged subjects shall identify and take appropriate measures to
verify the identity of the settler, the trustees, the protector, the beneficiaries or
types of beneficiaries and of any other individual who exercises ultimate effec-
tive control over the trust, even through a chain of control or ownership. For
beneficiaries designated based on features or types, the required information
must be obtained to establish the beneficiary’s identity at the time of payment or
when the beneficiary intends to exercise rights conferred.
In the event of legal instruments which are similar to Anglo-Saxon trusts, obliged
subjects shall identify and take appropriate measures to verify the identity of per-
sons holding equivalent or similar positions to those specified in the preceding
paragraph.”

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34 – Part A: Availability of information

d) Management companies of investment funds and investment


companies whose management is not assigned to a management
company.
e) Pension fund management entities.
f) Management companies of venture capital entities and venture
capital companies whose management is not assigned to a man-
agement company.
g) Mutual guarantee companies.
h) Payment institutions and electronic payment institutions.
i) Persons whose business activity includes currency exchange.
j) Postal services in respect of giro or transfer activities.
k) Persons professionally involved in brokering loans or credits,
as well as persons who, without being licensed as credit institu-
tions, carry out professionally any of the activities covered by
the First additional provision of Law 3/1994, of 14 April 1994,
adapting Spanish legislation on credit institutions to the Second
Banking Co-ordination Directive and introducing other changes
relative to the financial system.
l) Property developers and persons whose business activities
include those of agency, commission or brokerage in real state
trading.
m) Auditors, external accountants and tax advisers.
n) Notaries and land, commercial and moveable property
registrars.
ñ) Lawyers, barristers and other independent professionals when
they participate in the design, implementation or advice on activ-
ities on behalf of clients relating to the buying and selling of real
estate or business entities, the management of funds, securities
or other assets, the opening or management of current, savings or
securities accounts, the organisation of contributions necessary
for the creation, operation or management of companies or the
creation, operation or management of trusts, companies or simi-
lar structures, or when acting on behalf of clients in any financial
or real estate transaction.
o) Persons who on a professional basis and in accordance with
the specific rules applicable in each case provide the follow-
ing services to third parties: forming companies or other legal

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Part A: Availability of information– 35

persons; acting as or arranging for another person to act as a


director or secretary of a company, a partner of a partnership or
a similar position in relation to other legal persons; providing a
registered office, business address, correspondence or admin-
istrative address and other related services for a company, a
partnership or any other legal person or arrangement; acting as
or arranging for another person to act as a trustee of an express
trust or similar legal arrangement, or acting as or arranging for
another person to act as a shareholder for another person, other
than a company listed on a regulated market that is subject to
disclosure requirements in conformity with EU Community leg-
islation or subject to equivalent international standards.
p) Casinos.
q) Professional dealers in jewels, precious stones or precious
metals.
r) Professional dealers in works of art or antiques.
s) Persons whose business activity includes those set down in
article 1 of Consumer Protection in the Procurement of Goods
with a Price Refund Offer Law 43/2007, of 13 December.
t) Persons engaged in the deposit, custody or professional transfer
of funds or means of payment.
u) Persons responsible for the management, operation and mar-
keting of lotteries or other gambling activities in respect of prize
payment transactions.
v) Natural persons engaged in the movement of means of pay-
ment, under the terms laid down in article 34.
w) Professional dealers in goods, under the terms set out in
article 38.
x) Foundations and associations, under the terms provided for in
article 39.
y) Managers of payment systems, clearing systems and those for
the settlement of securities and financial derivatives, as well as
managers of credit cards or debit cards issued by other entities.”
80. The key categories of obliged persons in the identification of
companies’ beneficial owners and maintenance of updated information were
notaries, financial institutions and, since 2018, the Commercial Registry. In
addition, under article 9.1 of Royal Decree 304/2014, administrators of entities
have to “obtain and maintain appropriate, accurate and updated information

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36 – Part A: Availability of information

of the beneficial ownership thereof”. In addition, the Tax Administration


has sufficient powers to collect and request information regarding legal and
beneficial ownership, either by direct access to the Commercial Registry or
by request to any database or to the administrators of companies, whose iden-
tification is publicly available at the Commercial Registry itself and in the Tax
Administration´s database.
81. Notaries are the primary source of beneficial ownership informa-
tion. As previously mentioned, the incorporation process of a company is
through a public deed of incorporation that must be executed before a notary.
The notary, according to section 2 (n) of the AML/CTF Act is an obliged
person who must conduct CDD on company owners and directors as part
the incorporation process. According to section 4 of the AML/CTF Act, an
obliged person must identify the beneficial owner of the company when it is
establishing a business relationship.
82. In addition, in each notarised transaction performed by a company
(which includes the transmission of SRL’s stakes, a modification in the
bylaws, an increase in the company’s capital, etc.) the notary must undertake
beneficial ownership identification.
83. Beneficial ownership information obtained by notaries is transmitted
to the General Notary Council and is held in a centralised database called the
Notaries Sole Index. Notaries must ensure that the transmitted information
corresponds truthfully and exactly to the public documents issued or author-
ised by them. The Notaries Sole Index records separately the information
obtained through customer declarations at the time of notarised transactions
and the verified, aggregated information compiled by notaries.
84. Currently the Notaries Sole Index contains information on all acts
authorised by notaries since 2004, and is available to competent authori-
ties (including the Tax Administration). According to the General Notary
Council, the Notaries Sole Index contains, overall, beneficial ownership
information on approximately 2 200 000 entities. This includes the beneficial
ownership information of 1 975 715 companies and partnerships, which is
equivalent to around 63% of the total number of companies and partnerships
registered in the Commercial Registry at the end of 2017. According to the
information provided by Spain, the companies and partnerships that do not
have beneficial ownership information in the Notaries Sole Index are enti-
ties that have not had a transaction with a notary since 2004. However, all
changes of legal ownership for SRLs (which are approximately 93% of the
registered legal entities) must be executed before a Public Notary through a
public deed and the notary, as an AML obliged person, should identify the
beneficial ownership in accordance with the AML/CTF Law.

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Part A: Availability of information– 37

85. The second source of beneficial ownership information are financial


institutions. Even though there is not an explicit obligation for companies to
have a bank account, one of the essential documents for the registration of
companies and partnerships is the funds deposit certificate showing that com-
pany’s capital has been deposited in full. The commercial legal framework
stipulates that funds from the share capital should be paid by the persons
who receive them, and in the name of the company being created, into a
credit institution (section 62 of the Corporate Enterprises Act, sections 132
and 189 of Royal Decree 1784/1996). There is an exception for SRL’s incor-
porated after 1 January 2018 according to which the certificate showing that
company’s capital has been deposited is not mandatory if the shareholders,
in the public deed of incorporation, assume a joint and personal liability vis-
a-vis the company and third parties for the amount of the company’s capital
(section 62 of the Corporate Enterprises Act).
86. Financial institutions, as further described in A.3, have to identify
beneficial owners when establishing a business relationship or performing
an occasional wire transfer for an amount exceeding EUR 1 000 or perform-
ing other occasional transaction over a EUR 15 000 threshold (section 9.1 of
Royal Decree 304/2014).
87. Since January 2016, financial institutions are required to submit a
financial ownership file (which includes beneficial ownership information)
to the SEPBLAC on the opening, modification or cancellation of financial
accounts (section 43 of the AML/CFT Act and sections 50-57 of the Royal
Decree 304/2014). The Tax Administration has access to this information
(section 52 of the Royal Decree 304/2014).
88. Furthermore, on 21 March 2018, Order JUS/319/2018 was issued
which requires all companies and partnerships to annually submit to the
Commercial Registry a form identifying their beneficial owners (as defined
in the Spanish AML/CFT Framework) as on 31 December of the previous
year, when complying with the obligation to file their annual accounts.
This new obligation was introduced in order to comply with the European
Directive 2015/849, establishing a beneficial ownership central register
within in each Member State. The dateline for reporting this information
for first time was 31 July 2018. The sanctions for not complying with this
requirement are the same as those applicable for the non-compliance with the
obligation to file the annual accounts with the Commercial Registry, which
are described below in paragraphs 178 and 181.
89. In conclusion, there is a network of overlapping mechanisms:
Notaries, Financial institutions and the Commercial Registry (from 31 July
2018) which together should secure the availability of information on the
beneficial owners of commercial entities in Spain. According to Article 25 of
AML Law, obliged subjects must keep documentation (including ownership

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38 – Part A: Availability of information

information) for a period of ten years. Additionally, with regard to notaries,


they must keep public documents for 25 years in the notary’s office and for
75 years in the Notarial College to which the notary belongs.
90. Nonetheless, as already indicated, there is a large number of companies
for which beneficial ownership information is not available in the Notaries Sole
index, around 30% of all companies which were operating before 2004, and a
much larger number, 65%, that do not comply with the obligation to file their
annual accounts with the Commercial Registry. In year 2017, 1 137 097 out of
the 3 156 095 entities registered with the Commercial Registry at the end of 2017
filed annual accounts for 2016 taxable year and other taxable years (approxi-
mately 35% of all registered companies and partnerships). The 1 906 658 entities
that do not comply with this obligation have their Commercial Registry closed.
Spain should monitor and enforce the effective compliance of the new obliga-
tion – established under Order JUS/319/2018 – of companies and partnerships to
annually submit to the Commercial Registry a form identifying their beneficial
owners. Effective enforcement of this obligation would close the gaps in infor-
mation that currently exist in the Notaries Sole index.
91. During the current review period, Spain received approximately
9 requests for beneficial ownership information from 7 different jurisdictions;
it was able to obtain the requested information in each case. No concerns
were raised by the peers regarding Spain’s ability to exchange beneficial
ownership information.

Beneficial ownership information – enforcement measures and oversight


92. AML/CFT supervisory functions are mainly exercised by SEPBLAC
and cover a wide range of obliged persons. In addition, SEPBLAC co-
ordinates its supervisory actions with the financial prudential supervisors in
each sector in order to ensure compliance with obligations imposed under the
AML Act. To date, the three financial supervisors have signed agreements
with the Commission for the Prevention of Money Laundering and Monetary
Offences with the aim to work in collaboration with SEPBLAC on AML
supervision: Banco of Spain (mainly for banks and payment institutions),
CNMV (for investment institutions) and DGSFP (for life insurance firms and
pension funds).
93. SEPBLAC monitors using a mix of off-site and on-site tools. Off-site
analysis is systematic, carried out at set intervals, and based on analysis of a
comprehensive set of data and information of different origins. The off-site
activities includes such supervisory actions as requests for information to
the obliged entities and consultations with the obliged entities. Based on the
off-site analysis results, inspections are planned and carried out choosing the
most appropriate on-site visiting format. During on-site visits, the auditors

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Part A: Availability of information– 39

must check the documents kept to identify beneficial owners as well as the
measures and methods used by the obliged person to identify the beneficial
owner. Between 2013 and 2017, SEPBLAC did around 300 in situ inspections:
166 to financial entities and 134 to non-financial entities.
94. SEPBLAC, adopts a risk-based supervision model (Article 47.3 of
AML/CFT Act), concentrating its supervisory actions on the sector and
activities that pose more ML/FT risks. The AML/CFT reviews (on site and
off site activities) are based on an annual plan approved by the Commission
for the Prevention of Money Laundering and Monetary Offences.
95. The table below gives an overview of the total number of AML on-
site inspections carried out by the different supervisory authorities during the
last years for which the statistics are available.

AML on-site inspections

2012 2013 2014 2015 2016


SEPBLAC 3 20 91 71 65
Bank of Spain 5 12 6 3 3
CNMV 3 5 2 7 8
DGSFP 0 0 5 5 3

96. The table below sets out the number of on-site inspections performed
on relevant AML obliged persons.

AML on-site inspections on relevant AML obliged persons

2014 2015 2016 2017


Credit institutions 23 22 13 14
Credit finance institutions 3 2 0 5
Mutual guarantee 4 0 0 1
E-money 0 0 3 2
Payment entities 4 4 2 1
Broker-dealers, dealers, portfolio managers and insurers 7 0 4 4
(life insurance)
Auditing, accountants and tax advisors 6 7 1 1
Notaries and registrars a 2 1 0 2
Lawyers 10 5 15 9
TCSP 2 4 0 0
Note: a. The on-site inspections of notaries and registrars mentioned in this table are those
carried out by SEPBLAC with the OCP. Paragraph 104 specifies the number of
individual inspections of notaries carried out by the OCP.

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40 – Part A: Availability of information

97. The frequency of AML/CFT inspections on those obliged persons


that are sources of beneficial ownership information for companies and part-
nerships seems adequate to ensure compliance with the AML obligations
as required under the standard, with the exception of notaries which is dealt
with further below.
98. Where deficiencies are identified, supervisory authorities take meas-
ures to ensure that the deficiencies are remedied. These measures include
warning letters, removal of the senior management or of the representative
board, monetary sanctions and criminal sanctions.
99. The following table shows the numbers of warnings actions per-
formed during the review period by SEPBLAC.

Number of warning actions on AML obliged persons

2015 2016 2017


Total number of warning actions 11 9 23
Financial institutions 4 8 20
Non-financial institutions 7 1 3

100. Sanctions can be applied also in respect of individuals responsible


for the failure In the case of severe infringements of the AML framework,
pecuniary sanctions may be applied, and in some cases, non-pecuniary
sanctions can be used, including the revocation of the financial institution’s
license. Non-compliance with identification of beneficial owner(s) or record
keeping obligations is considered to be a severe infringement, which can be
sanctioned with, a fine between a minimum of EUR 60 001 and a maximum
amount that may be imposed up to the highest of these figures: 1% of the
net worth of the obliged persons, the sum of the economic substance of the
transaction, plus 50% or EUR 150 000. In addition, that sanction would be
accompanied by an individual sanction of a minimum of EUR 3 000 and a
maximum of EUR 60 000, and it could be accompanied by (i) a private warn-
ing, (ii) a public warning; or (iii) temporary suspension from office. Royal
Decree Law 11/2018 amended article 57 of the AML/CFT Act, establishing
new sanctions in case of non-compliance with identification of beneficial
owner(s) or record keeping obligations. 5

5. Under amended article 57 of AML/CFT Act it is considered to be a severe


infringement, which can be sanctioned with a fine between a minimum of
EUR 60 001 and a maximum amount that may be imposed up to the highest
of these figures: 10% of the net worth of the obliged persons, the sum of the
economic substance of the transaction, plus 50% or EUR 150 000, the triple of
the profits derived from the infringement, or EUR 5 000 000. In addition, that

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Part A: Availability of information– 41

101. Under Section 54 of the AML/CFT Act, holders of administrative


or management posts in or for an obliged person, whether individually or in
professional associations, may be liable for any infraction attributable to their
wilful or negligent misconduct.
102. Monetary sanctions in the amount of EUR 6 005 137 were imposed
in 2014, EUR 5 605 690 of fines were imposed in 2015 and EUR 10 037 159
of fines were imposed in 2016 against obliged persons for the non-compliance
with AML obligations.
103. The AML supervisors have opened an investigation and applied sanc-
tions on the following types of AML obliged persons during 2014 to 2017:

Number of monetary sanctions imposed by AML supervisors


by type of obliged person

2014 2015 2016 2017


Financial institutions 5 6 8 3
DNFBP 0 2 5 10
Administrators 0 0 0 0

104. In addition to SEPBLAC, the OCP supervises notaries to ensure


compliance with their AML/CFT obligations. The OCP has the legal duty to
supervise the individual Notaries according to guidelines and a specific and
approved inspection plan –Article 44.2.i) of AML/CFT Regulation. The results
of the inspections performed by the OCP are sent to SEPBLAC. The OCP
approved its methodology on November 2015. On April 2018, the OCP sent to
SEPBLAC the results of its 82 individual inspections to notaries between 2015
and 2017 –“OCP inspection report”. SEPBLAC has reviewed the OCP’s inspec-
tion report and in addition has performed three on-site inspections to the OCP
since 2014 in order to verify its compliance of the AML/CFT obligations. In
particular, SEPBLAC has focused on internal control issues –as the obligation
to have an AML/CFT external review or the fulfilment of the training obliga-
tions – of the centralised prevention body (OCP) which has relevant duties over
the individual Notaries according to the Spanish legal framework.
105. While acknowledging that properly assessing the effectiveness of
enforcement and inspection agencies is difficult, the proportion of notaries
subject to AML/CFT inspections is low despite the fact that notaries have an
important role in the establishment and operation of legal entities and are,
therefore, an important source of beneficial ownership information. Spain

sanction could be accompanied by (i) a private warning, (ii) a public warning; or


(iii) temporary suspension from office.

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42 – Part A: Availability of information

should further strengthen measures to ensure that notaries obtain adequate,


accurate and up to date beneficial ownership information in all cases.

Inactive entities
106. According to the statistics provided by Spain, there are a significant
number of companies that do not comply with the annual obligation to file
CIT returns with the tax administration; although many of these have reported
their total cessation of business or have their TIN removed. Additionally, as
mentioned above in paragraph 90, for 2017, approximately 65% of the compa-
nies and partnerships registered in the Commercial Registry did not comply
with the obligation to file the annual financial accounts.
107. During the onsite it was explained that the reason these entities do
not comply with filing obligations was that a large number of companies that
still exist are in fact completely inactive.
108. Entities that (i) do not submit their annual accounts to the Commercial
Registry; or (ii) do not file their CIT returns for three consecutive years; are
automatically subject to the closure of the Commercial Registry. The closure
of the Commercial Registry prevents the company or partnerships from reg-
istering acts before the Commercial Registry. 6 The closure of the Registry
is public information and the general public (including EOI partners) have
access to this information online. In addition, the administrators of the entity
could be liable for economic damages caused to entity due to the entity’s
non-compliance and could be personally liable for the company’s debts in the
case of bankruptcy.
109. According to Spain, the closure of the Commercial Registry impedes
the entity from running a business in a normal way and limits the participa-
tion of the entity in commercial activities (including the possibility to obtain
a loan from a financial institution or to transfer or acquire an asset subject to
public registry, among many other transactions).
110. Nonetheless, an entity that has its Commercial Registry closed
remains in legal existence, does not have an express legal prohibition from
performing commercial operations and continues to have the legal obligation
to comply with commercial and tax filing requirements.

6. The only acts that can be registered when the registry is closed are: (i) removal
or resignation of liquidators, (ii) revocation of powers of representation, (iii) liq-
uidation of the company, (iv) appointment of liquidators, and (v) files that should
be registered by judicial or administrative order. In the event that a company or
partnership has its registry closed due to the non-compliance with CIT returns
filing obligation, it can only register files if there is a judicial order that mandates
that it has to be registered.

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Part A: Availability of information– 43

111. There are 1 906 658 (approximately 60% of the companies and part-
nerships registered in Spain) that have their Commercial Registry closed.
112. From the Commercial Law perspective, the Institute of Accounting
and Audit of Accounts (ICAC) is the body in charge of supervising the statu-
tory auditors and imposing sanctions on companies and partnerships for not
filing their annual accounts with the Commercial Register.
113. Annually, the ICAC receives from the Commercial Registry, the
list of companies that were non-compliant with the obligation to deposit
their annual accounts with the Commercial Register. Based on this list (and
according to its institutional capabilities), the ICAC initiates infringement
proceedings in relation to the non-compliant companies and partnerships and
can impose monetary sanctions ranging between EUR 1 200 to EUR 60 000
and when the company’s annual turnover exceeds EUR 6 000 000, the fine
can be increased up to EUR 300 000 (section 283 Corporate Enterprises Act).
114. The table below sets out the number of infringement proceedings
conducted by the ICAC during the review period and the total amount of
monetary sanctions levied.

Sanctions Applied by ICAC for non-compliance with


annual account filing requirement

Years Infringement proceedings conducted by the ICAC Total amount of fines levied
2017 159 EUR 769 469
2016 179 EUR 1 037 437
2015 151 EUR 938 240

115. Another mechanism to address non-compliance with filing obliga-


tions, is the possibility for the Tax Administration to remove an entity’s TIN
if the entity has not filed income tax returns in three consecutive taxable
periods (section 147 of the Royal Decree 1065/2007).
116. Up to February 2019, the Tax Administration had removed 289 654
TINs. The table below shows the number of TINs removed by the Tax
Administration during the review period.

TINs removed by the Tax Administration

Year Number of TINs removed by the Tax Administration


2017 76 240
2016 88 826
2015 101 073

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44 – Part A: Availability of information

117. The removal of a TIN will greatly impede an entity from operating
in domestic and cross-border transactions but until a company has been dis-
solved the obligation to file the company’s annual financial statements as
well as the annual corporation tax declarations remains. The consequences
of having the TIN removed are, among others:
• the impossibility to register any document within the Commercial
Registry until the TIN is reinstated or a new TIN assigned
• the inability for the entity to make or receive payments in accounts or
deposits held in credit institutions
• inability to obtain a certificate of up-to-date tax and social security
payments
• third parties doing business with the entity whose TIN has been
removed can be sanctioned with a fixed fine of EUR 150 per transac-
tion or in the case of credit institutions the fine would be 5% of the
amount of the transaction with a minimum of EUR 1 000 per trans-
actions (section 202 General Tax Law).
118. In addition, up to 31 December 2017, 740 290 SRL and 23 643 SA
had voluntarily reported to the Tax Administration their total cessation of
business via a tax census’ status update. By checking box 140 of Form 036,
an entity has declared that is has ceased to perform business activities but has
not been dissolved and liquidated.
119. Nevertheless, these entities continue to have legal personality are
obliged to file CIT returns annually and must comply with commercial obli-
gations, such as maintaining accounting records and filing annual accounts
with the Commercial Registry.
120. In practice, there could be cases in which a non-compliant entity
continues to hold assets or conduct transactions entirely abroad without the
need to engage with the Spanish financial system, a Spanish notary, other
Spanish entities or with Spanish authorities, and does not maintain or file up
to date ownership and accounting information. The availability of adequate,
accurate and up to date beneficial ownership information for these entities
might not be assured. Spain indicated that in practice it could be alerted by a
treaty partner that this entity is operating abroad.
121. In view of the number of non-complying inactive entities, Spain
should review its system whereby a significant number of non-complying
inactive companies remain with legal personality on the Commercial Registry.

A.1.2. Bearer shares


122. As discussed in the 2011 Report, shares of SA (joint-stock compa-
nies) and SCA may be represented by bearer shares (sections 23 and 113 of

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Part A: Availability of information– 45

the Corporate Enterprises Act). 7 Although bearer shares might be issued


according to the 2010 Corporate Enterprise Act, and there is no amendment
envisaged in this regard, since 1936 their issuance and transfer is strictly
regulated (except during the period 1989-98). First, the names of all founders
of companies must be included in the deed of the company, even in the case
of bearer shares. Second, the subscription or transfer of bearer shares cannot
be made by the mere transfer of the paper-share but requires the intervention
of a public notary. Finally, if a company distributes dividends to the share-
holder, it must identify its shareholders and inform the tax administration on
an annual basis, in the same way as for registered shares. Information regard-
ing the distributions of dividends is reported to the Tax Authority through
Tax Administration Form 193. The Tax Administration uses this information
to carry out supervisory activities and to prepare the prepopulated form of
individual’s personal income tax.
123. Since 1998, the transfer of bearer shares of unlisted companies has
to be performed through (1) a notary, (2) a securities company, or (3) a credit
institution, for the ownership transfer to be valid (Additional Provision Three
of Act 24/1988 on the Securities Market). Notaries, securities companies and
credit institutions must keep records of the transaction and supply this infor-
mation annually to the tax administration. They must supply the complete
identification of the buyers and sellers (their name or business name, address
and tax identification number), as well as the type and number of shares, and
the amount, date and, if any, earnings for each transaction (section 42 of the
General Regulation on Tax Auditing). Notaries also send this information to
a centralised database of the Council of Public Notaries every month. If a
transfer is not valid, then the purported transferee would have no rights as a
shareholder, e.g. to receive dividends or vote.
124. Similarly, since 1998, the transfer of bearer shares of a publicly
traded company is possible only after they have been dematerialised in book
entries (as they cannot be traded on the stock market, section 496 of the
Corporate Enterprises Act).
125. In addition, the AML law prohibits the institutions and persons cov-
ered by this Act to enter into, or continue, business relations with companies
whose shares are represented by bearer securities, unless they determine
by other means their structure of ownership and control. This prohibition
does not apply to the conversion of bearer shares into registered securities or
book‑entry securities (section 4(4) of AML/CFT Act).

7. SRL cannot issue bearer shares because their shares (participaciones sociales)
may not take the form of bonds or accounting entries. Therefore, the statutory
provisions governing bearer shares cannot be applied to shares in a SRL.

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46 – Part A: Availability of information

126. As concluded in the 2011 Report, the issuance and transfer of bearer
shares has been strictly regulated since 1936 (except the period 1989-98), and
currently no one can derive income or capital gains from bearer shares with-
out being identified by the tax administration. The only legacy issue relates
to bearer shares issued before 1936 or from 1989 to 1998, that have not been
transferred or for which the owners have not received any dividends since then.
127. In practice, Spain’s public officials express the view that bearer
shares are very rarely used. During the current review period, Spain has not
received any requests regarding bearer shares and no concerns were raised by
the peers regarding this issue.

A.1.3. Partnerships
128. As already described in the 2011 Report, Spanish law provides for
two types of partnerships:
• Compañía Colectiva (general partnership) is a commercial entity
with at least two members (who are traders) who are jointly, person-
ally and severally liable for the partnership’s debts (sections 125-144
of the Commercial Code).
• Compañía en Comandita Simple (limited partnership) is a commer-
cial entity that only partly fulfils the criteria for unlimited liability
entities since it comprises two classes of members: general partners,
who are jointly and severally liable for the partnership’s debts, and
limited partners, who incur no liability for the partnership’s debts
and whose risk is limited to the amount of their contribution (they are
essentially financial backers). Limited partners may not carry out any
external act of management, even by virtue of a power of attorney
(sections 145-150 of the Commercial Code).
129. According to the information provided by the Registrars Professional
Association, at the end of calendar year 2017, there were 2 427 general
partnerships and 423 limited partnerships.

Legal ownership and Identity Information Requirements


130. The 2011 Report concluded that the rules regarding the availability
of legal ownership information in respect of partnerships were in compliance
with the standard. There has been no change in the legal framework since the
first round review.
131. The Commercial Register and tax administration have in their files
the names of all the partners of general and limited partnerships. The names
of all the partners of a general partnership and limited partnership must
appear in the deed of incorporation of partnerships, which must be amended

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Part A: Availability of information– 47

every time a partner changes. The deed must also include the contributions
made by each of the founding partners (whether individuals or corporations),
and their respective interests in the partnership (sections 125 and 145 of the
Commercial Code).
132. All commercial entities, including general and limited partnerships,
must register with the Commercial Register and provide their deeds of incor-
poration within a month of their creation and once they have been allocated
a tax identification number. The same rules applicable to companies apply to
partnerships. The tax obligations of commercial partnerships are the same as
those of companies (see above).
133. In the case of limited and general partnerships it is not possible to trans-
fer stakes without the consent of all the partners (section 143 of the Commercial
Code). As a result, all partners know the identity of the other partners.

Beneficial ownership
134. As in the case of companies, information on the beneficial owners
of partnerships is mainly available in application of AML/CTF Law.
Identification of the beneficial owner(s) of a partnership is required to be
available with the AML service provider engaged by the partnership. The
public deed to create a partnership has to be executed before a notary and
any change in the partnership deed (including change on partners) has to
be performed before a notary. As notaries are obliged persons, it is ensured
that a partnership will always engage an AML obliged person and therefore
identification of beneficial owner(s) of partnership is required to be available
in line with the standard. Identification of beneficial owners of partnerships
may also be available with other AML obliged persons such as banks upon
opening a bank account, accountants, auditors or lawyers who will typically
be engaged by a partnership conducting business in Spain.
135. Sanctions, enforcement measures and oversight with regard to reg-
istration and tax declaration requirements of partnerships are generally the
same as those for companies with share capital examined above. In addition,
the rules for foreign partnerships are the same as those for foreign companies
already mentioned in paragraph 49.
136. In practice, Spain has not had any difficulty in obtaining partnership
ownership information for its EOI partners and no concerns in respect of
availability of this information were reported by the peers.

A.1.4. Trusts
137. As concluded in the 2011 Report, the concept of “trust” does not exist
under Spanish Law, and Spain is not a signatory of The Hague Convention

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48 – Part A: Availability of information

of 1 July 1985 on the Law Applicable to Trusts and on their Recognition.


However, Spanish domestic law does not have obstacles that prevents a
Spanish resident from acting as a trustee, or a trustee of a foreign trust to
invest or acquire assets in Spain.

Legal requirements
138. The 2011 Report concluded that information about settlors, trustees,
and beneficiaries of foreign trusts operated by trustees resident in Spain is
required to be available based on tax and AML obligations. These obligations
are adequately supported by sanctions in case of non-compliance and the
information is required to be kept for at least five years since the end of the
period to which it relates as required under the standard. There has been no
change in these legal requirements since the first round review.
139. As stated in the 2011 Report, the Spanish tax framework does not
contain specific provisions on the taxation of the assets or income derived
from foreign trusts with a link to Spain. These assets and income are subject
to tax as any other assets or incomes of the trustee and any benefit distributed
to beneficiaries must be declared in their tax returns.
140. The tax administration can use all the procedures at its disposal to
seek and request any information from the trustees that are residents in Spain.
Trustees resident in Spain (professional or not) are subject to record-keeping
requirements for the determination of their income, as is any person resident
in Spain. Thus, all records that are necessary for determining his/her income
must be kept (section 29 of the General Tax Law). This typically includes the
trust deeds and therefore the names of the settlors and named beneficiaries
of the trust, and the nature of the assets in the trust that have generated the
income.
141. Therefore, due to general tax requirements in Spain applicable to all
taxpayers, a trustee resident in Spain must be able to provide the tax authori-
ties with information on the settlors and beneficiaries of trusts that he/she
administers.
142. Regarding the AML/CTF framework, there is an explicit require-
ment for obliged persons to take measures to identify beneficial owners of a
trust (i.e. obligation to identify any natural person exercising ultimate effec-
tive control over the trust in addition to identification of settlors, trustees,
protectors and all beneficiaries of a trust) contained in the AML Regulation
(section 9.5 of Decree 304/2014). Any natural or legal person providing
services of administering or managing a trust or corresponding legal arrange-
ment is considered a trust and company service provider under the AML
framework and covered by CDD obligations which include obligation to
identify the beneficial owner in line with the standard (Section 2 of the AML/

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Part A: Availability of information– 49

CFT Act). The CDD information has to be retained by the obliged person for
a period of at least 10 years after the business relation has ended. In the case
of breach of AML obligations criminal and administrative sanctions apply.
143. Non-professional trustees are not covered by the AML obligation.
However, cases where a Spanish resident other than a lawyer, accountant or
other AML obliged service provider would act as a trustee seem rather rare
given that trust arrangements cannot be created under Spanish law and do not
a have a tradition in Spain.

Implementation in practice
144. As trustees resident in Spain are subject to general tax law obliga-
tions, supervision and enforcement of trustees’ obligations under the tax law
is the same as in respect of other persons as described in section A.1.1. There
are no statistics within the tax administration regarding how many trustees
have been audited during the review period.
145. As the concept of trusts is not recognised in Spain, there is no
register of trusts. However, professional trustees are subject to AML/CFT
obligations, and according to the new Single Additional Provision of AML/
CFT Law – as drafted by Royal Decree Law 11/2018-, TCSP should be regis-
tered in the competent Commercial Register.
146. Professional trustees operating in Spain are obliged to conduct CDD
in respect to their clients and are subject to AML supervision by SEPBLAC.
Trust and company services are also provided by lawyers who are also
obliged persons. At 31 December 2017 there were 46 trust and company
service providers (TCSPs) listed with SEPBLAC. There are no statistics of
how many foreign trusts are administered by Spanish resident lawyers or
TSCPs. According to the modification of the AML/CFT Act mentioned in
paragraph 29, from April 2019 TSCPs will have special registration require-
ments and there will be more information available from then. During the
review period the number of onsite inspections performed on TCSPs and
lawyers was:

SEPBLAC on-site inspections on TCSP and lawyers

SEPBLAC on-site inspections 2015 2016 2017


Lawyers 5 15 9
TCSP 4 0 0
TOTAL 9 15 9

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50 – Part A: Availability of information

147. While acknowledging that properly assessing the effectiveness of


enforcement and inspection agencies is difficult, in the absence of infor-
mation on the number of trusts for which they act, the number of on-site
inspections of lawyers and TCSPs seems low given their potential importance
in assuring the availability of legal and beneficial ownership information on
foreign trusts and similar arrangements. It is recommended that supervisory
activities in the case of lawyers and TCSPs should be strengthened in view of
the limited number of on-site inspections undertaken and their potential role
in the operation and management of trusts.
148. Spain did not receive any information request relating to a trust own-
ership information during the review period.

A.1.5. Foundations
149. Jurisdictions that allow for the establishment of foundations should
ensure that information is available identifying the founders, members of
the foundation council, beneficiaries, as well as any beneficial owners of the
foundation or persons with the authority to represent the foundation.
150. As already concluded in the 2011 Report, there is no provision for
private-interest foundations in Spanish law. Foundations in Spain are non-
profit entities established by individuals, legal entities or State public sector
entities, exclusively for listed public-interest purposes. Foundations are not
allowed to make distributions or return assets to the founders.
151. Foundations are regulated by the Foundations Act (Act 50/2002 of
26 December 2002). Article 3.3 of the Foundations Act expressly prohibits the
creation of foundations whose main aim is to provide benefits to the founder,
board members, and their relatives down to the fourth degree of kinship.
Foundations are strictly regulated, have to register in the public Registry
of Foundations and are supervised by a “protectorate” of the General State
Administration.
152. In practice, Spain has not received any information request relating
to a Spanish foundation during the review period.

A.2. Accounting records


Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.

153. The 2011 Report found that Spain’s legal and regulatory framework
for the maintenance of accounting records, including underlying documenta-
tion, for a minimum period of five years and its implementation in practice
generally ensured the availability of accounting information in line with the

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Part A: Availability of information– 51

standard. Accordingly, Element A.2 was determined to be in place and rated


Compliant.
154. Since the first round review there has been no change in the relevant
legal obligations. Entities are obliged to keep accounting records by both the
commercial and the tax law framework.
155. Around one third of the companies and partnerships registered in the
Commercial Registry comply with the obligation to file annual accounts with
the Commercial Registry and the oversight body, ICAC, imposes a very low
number of sanctions, compared to the total number of non-compliant entities.
In addition, under the tax law framework, there are a significant number of
companies and partnerships that do not file annual CIT returns; although
many of these have reported their total cessation of business or have their
TIN removed.
156. According to Spain, the reason why these entities do not comply with
filing obligations is that a large number of the companies that exist are in fact
completely inactive. Nevertheless, the scale of non-compliance gives raise to
concerns that accounting documents might not be kept by all entities.
157. Spain received a significant number of requests for accounting
information and the information was available and had been accessed and
exchanged with the EOIR partner requesting that information. Peers were, in
general, satisfied with the responses and did not raise major concerns.
158. The table of determinations and ratings is as follows:

Legal and Regulatory Framework


Deficiencies identified Underlying Factor Recommendations
in the implementation
of the legal and
regulatory framework
Determination: In place
Practical Implementation of the standard
Underlying Factor Recommendations
Deficiencies identified The large number of Spain should review
in the implementation inactive companies that its system whereby
of EOIR in practice maintain legal personality a significant number
and do not comply with of non-complying
their filing obligations raises inactive companies
concerns that accounting remain with legal
records information might personality on the
not be available in all cases. Commercial Registry.
Rating: Largely Compliant

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52 – Part A: Availability of information

A.2.1. Obligations to maintain accounting records


159. The 2011 Report concluded that the legal and regulatory framework
requires the availability of accounting records in line with the standard. Since
then there has been no change in the relevant obligations.
160. Section 25 of the Commercial Code requires that all businesses
(sole traders and commercial companies) keep orderly accounts, appropriate
to the business’s activities, that allow chronological monitoring of all their
operations, as well as periodic preparation of balance sheets and inventories.
Trustees are covered by these obligations including in respect of trust income
on which they are taxable. Notwithstanding the terms set forth in the laws or
special provisions, a Book of Inventories and Annual Accounts and a Journal
must be maintained (sections 25 and 28 of the Commercial Code):
• The Book of Inventories and Annual Accounts opens with a detailed
initial balance for the company. The totals and trial balances are
entered at least every three months. The inventory at year-end clos-
ing and the annual accounts are also entered in this book. Annual
accounts must include the balance sheet, profit and loss account, a
statement of changes in equity, a cash-flow statement (unless other-
wise regulated), and the notes. These documents form a single unit
(sections 34 to 37 of the Commercial Code).
• The Journal records on a daily basis all the operations related to the
activities of the company. Joint entry of the totals of operations for
periods no longer than one month can be recorded, with the condition
that the detail appears in other concordant books or registers.
161. All the accounting books and documents must be kept with clar-
ity, by order of dates, without blank spaces, interpolations, crossings out
or erasures (section 29 of the Commercial Code). The Book of Inventories
and Annual Accounts and the Journal must be submitted to the Commercial
Register for certification (section 27). Therefore, SAs, SRLs and SCAs must
deposit their annual accounts to the Commercial Register, and companies
that omit doing so are reminded of their duties and ultimately sanctioned with
a monetary fine (Section 283 Corporate Enterprises Act) and no document
pertaining to the company can be filed with the Commercial Registry whilst
the non-compliance persists (Section 282 Corporate Enterprises Act).
162. Branches of foreign companies are subject to the accounting require-
ments as Spanish companies. For tax purposes, if a non-resident company
carries on business in Spain through a permanent establishment (a wider
category that that of branches applied under commercial law) it is required to
keep its accounts under the provisions of the Code of Commerce.

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Part A: Availability of information– 53

163. Spain’s General Accounting Plan was adopted by Royal Decree


1514/2007, of 16 November 2007 and applies to all companies, irrespective of
their legal form. The Plan establishes the accounting principles and criteria, as
well as the guidelines for registry and evaluation and production of accounts
for all the companies in general. Additionally, Royal Decree1515/2007, of
16 November 2007 contains the General Accounting Plan for Small and
Medium Enterprises (GAP for SMEs), with reduced and simplified contents
in terms of the criteria for registry, evaluation and information.
164. In addition to the above-mentioned commercial law rules, all taxpay-
ers have a general obligation to keep and maintain accounting books, tax
records, and any document or information with tax relevance, related to the
compliance with its own and third-party tax obligations, for purposes of an
eventual request for information by the Tax Administration. (section 29 of
the General Tax Law).
165. Regarding the retention period, the Commercial Code establishes a
six years retention period counted from the date of the last entry recorded in
the books. In addition, the Tax Law provides that the records must be kept
for the longest period between: (i) the period provided for by the Commercial
Code or (ii) the statute of limitations for tax purposes period. The obligation
to keep the documentation corresponding for a certain period may extend
beyond its limitation period if such documentation is necessary for the
verification of a tax liability not yet barred under the statute of limitation
(section 70.3 General Tax Law).
166. In the case of individual entrepreneurs terminating their activity, they
are still bound to keep the accounting books and underlying documents for a
period of six years. In the case of death, the responsibility for the safekeeping
of the accounting books and underlying documents passes on to the entrepre-
neur’s heirs. For dissolved entities, the liquidators of the entity are obligated
to maintain the accounting books and underlying documents for 6 years.

A.2.2. Underlying documentation


167. The 2011 Report indicated that in both commercial law and tax law,
underlying documentation must be maintained in Spain for the same amount
of time as the accounting documents that go with it. This continues to be the
case.
168. The Commercial Code specifies that businesses must keep not only
the books, but also correspondence, documentation and receipts related to
their business, duly ordered (section 30).
169. In addition, if tax returns are filed electronically, the taxpayer must
keep copies of the original data underlying the accounting statements filed.

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54 – Part A: Availability of information

Taxpayers also have an obligation to preserve invoices, documents and evi-


dence related to tax obligations. Not doing so is an offence punishable by a
fine (sections 29 and 200 of the General Tax Law).

Oversight and enforcement of requirements to maintain accounting


records
170. There are two frameworks for the oversight and enforcement of
requirements to maintain accounting records: tax law and commercial law.
171. Under the tax law, the Tax Administration takes actions to verify
the compliance of formal tax obligations. Specific statistics for sanctions
imposed by the Tax Administration for the failure to keep proper account
records are not available. However, during the review period, the total
number of sanctions applied by the Tax Administration for non-compliance
with tax obligations was as follows:

Sanctions imposed by the Tax Administration for


non-compliance with tax formal obligations

Sanctions imposed by the Tax Administration for


Years non-compliance with formal and substantial tax obligations
2017 213 988
2016 294 206
2015 351 754

172. The Tax Administration also receives invoices in real time from
60 000 operators that cover 80% of the business transactions, thus allowing
the Tax Administration to detect indicia of business activity in real time.
In addition, the Spanish Tax Administration has a powerful information
system which is fed by the large number of information returns that a wide
number of economic business operators are obliged to submit. This allows
an effective supervision of the economic transactions realised by entities and
includes:
• information regarding the economic and professional transactions
carried out with other operators (information on income and pay-
ments related to sale of goods and services)
• financial information (financial account movements in amounts
above EUR 3 000, interest, dividends, sale of financial assets, loans,
balance at year end)
• immovable property information (rentals, Land registry)

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Part A: Availability of information– 55

• electric energy supply companies’ information sent to the Tax


Administration in order to identify contract consumers, immovable
land references and addresses
• international information (CbCR, CRS, FATCA).
173. Spain indicates that under its tax law, the Tax Administration takes
actions to verify the compliance of formal and substantive fulfilment of tax
obligations. In this regard, supervision is either partial –comprising a large
number of CIT taxpayers, or general – supervision on a taxpayer for several
taxes and periods, which allows for detection of more complex infringements.
Verifications that taxpayers developing economic activities fulfil their obliga-
tions of keeping annual accounts, accounting records and the content of sent
and received invoices are undertaken through these programmes. Supervision
checks of non-filing taxpayers are carried out by automated crosschecking of
information returns, referred to in paragraph 174 above. In addition, all CIT
returns filed at the Tax Administration are subject of a validation and contrast
process with information already in disposal of the Tax Administration, and
checked and verified considering risk indicators or infringements detected. In
this way, the Tax Administration’s information system allows for the detec-
tion of taxpayers carrying out unreported economic activities, which are then
requested to file the pertinent tax return.
174. In cases where tax returns are not filed for three consecutive years,
notwithstanding the applicable sanctions, the entity is deregistered in the
Tax Administration Index of Entities. This fact is communicated to the
Commercial Registry, closing the registry file with all of the consequences
that implies and it could also lead to revocation of the TIN. In addition, for
high risk sectors, supervision checks are done on the informal economy by on-
site tax inspectors’ audits, co-ordinated entry and search operations, supported
by IT audit units in order to verify information on the census of taxpayers
carrying out economic activities. The number of CIT Control supervisions
conducted was 563 318 in 2015, 582 148 in 2016 and 546 720 in 2017.
175. In addition to the verification checks, when conducting a tax audit,
the auditor verifies the accounting records and registry books. If there are no
accounting records or the records contain errors that results in an incorrect
assessment of the tax liability sanctions may be applied (sections 191 to 197
of General Tax Law). Also, section 200 of the General Tax Law sets out a
sanction specifically for non-compliance with accounting and record-keeping
requirements, which applies if the above-mentioned sections do not apply.
176. As mentioned in element A.1, for 2017, a large number of entities did
not file CIT returns despite having the legal obligation to do so. A significant
number of the entities that did not file the CIT return were entities that by
2016 already had their commercial registration closed (preventing the deposit
of new instruments as explained in paragraphs 108 to 111). These entities do

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56 – Part A: Availability of information

not appear to have any economic activity, when the Tax Administration per-
forms verification cross-checks with the information that is provided by other
governmental bodies, third parties and treaty partners, as described above.
However, that does not exempt them from return filing obligations.
177. Under the Commercial Law, the ICAC is the body in charge of
supervising statutory auditors and imposing sanctions on companies and part-
nerships for not filing their annual accounts with the Commercial Register.
Inactivity does not exempt a company from submitting financial statements
to the Register. The company is required to continue all of the procedures
directed when it is active.
178. Annually, the ICAC receives from the Commercial Registry, the
list of companies that were non-compliant with the obligation to deposit
their annual accounts with the Commercial Register. Based on this list (and
according to its institutional capabilities) the ICAC may impose monetary
sanctions ranging between EUR 1 200 to EUR 60 000 and when the com-
pany’s annual turnover exceeds EUR 6 000 000, the fine can be increased up
to EUR 300 000 (section 283 Corporate Enterprises Act).
179. The table below sets out the number of monetary sanctions imposed
by the ICAC during the review period; this suggests that proceedings are
taken against less than one in every ten thousand non-compliers.

Sanctions applied by ICAC for non-compliance with


annual account filing requirement

Years Infringement proceedings conducted by the ICAC Total amount of fines levied
2015 151 EUR 938 240
2016 179 EUR 1 037 437
2017 159 EUR 769 469

180. As mentioned in element A.1, for 2017, 1 137 097 companies and


partnerships filed their annual accounts with the Commercial Registry out
of the 3 156 095 entities registered with the Commercial Registry. Therefore,
around 35% of the companies and partnerships are complying with this filing
obligation.
181. As previously mentioned, entities that do not submit their annual
accounts to the Commercial Registry face closure of the Commercial
Registry preventing the company or partnership to register acts. The closure
of the Registry is public information and the general public (including EOI
partners) have open access to this information online. In addition, the admin-
istrators of the entity could be personally liable for economic damages caused
to an entity by noncomplying with the filing obligations of the entity and
could be personally liable for the companies’ debts in the case of bankruptcy.

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Part A: Availability of information– 57

182. According to Spain, the closure of the Commercial Registry impedes


the entity to run business on a normal way and limits the participation of the
entity in the commercial traffic (including the possibility to obtain a loan
from a financial institution or to transfer or acquire an asset subject to public
registration, among other transactions). Nonetheless, an entity that has its
Commercial Registry closed continues to have legal existence, does not have
an express legal prohibition to perform commercial operations and continues
to have the legal obligation to comply with its commercial and tax filing
requirements.
183. As mentioned in A.1., there are 1 906 658 (approximately 60% of the
companies and partnerships registered in Spain) that have their Commercial
Registry closed.
184. Additionally, under the Commercial Law, certain types of com-
mercial entities are required to name an auditor for the certification of their
accounts. For example, publicly traded entities and entities that reach a
certain size measured by the turnover, the size of the balance sheet or the
number of employees are required to have an auditor. The auditor will certify
that an entity’s accounts are kept according to the applicable legal obligations
and accurately reflect the situation of the entity. Auditors are independent
professionals and are regulated by the ICAC. For the fiscal year 2016-17,
60 495 legal entities reported their audited accounts to the ICAC.
185. In summary, a low percentage of companies and partnerships comply
with the obligation to file annual accounts with the Commercial Registry and
the number of sanctions imposed by ICAC is small. Further, a significant
number of companies and partnerships do not file CIT returns, although
many of these have reported their total cessation of business (740 290 SRL
and 23 643 SA) or have their TIN removed (289 654 entities) (see para-
graphs 116 and 118).
186. According to Spain, the reason why many entities did not comply
with these two important filing obligations is that a large number of the
companies that exist are in fact inactive and do not perform economic activ-
ity, hence there are no transactions to be recorded in the accounting records.
However, such entities may continue to hold assets.
187. During the current review period, Spain received a significant
number of requests for accounting records information and was able to
respond to the received requests. In general, the peers reported that they did
obtain the requested information from Spain and where satisfied with Spain’s
responses.
188. The closure of the registry is an obstacle for non-complying entities
to perform economic activity in Spain but it does not prohibit them from
doing so. Furthermore, there could be cases in which these entities could

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58 – Part A: Availability of information

hold assets or conduct transactions entirely abroad without the need to engage
with the Spanish financial system or being reported by third parties. While
the negative risk or impact is difficult to assess, and Spain has been able to
respond to requests for accounting information from treaty partners, it cannot
be assured that accounting information would be available, in those cases, in
line with the standard.
189. Spain should review its system whereby a significant number of
non-complying inactive companies to remain with legal personality in the
Commercial Registry.

A.3. Banking information

Banking information should be available for all account-holders.

190. The 2011 Report concluded that banks’ record keeping requirements
and their implementation in practice were in line with the standard. The A.3
element was determined to be “in place” and rated “compliant”.
191. Banks and other financial institutions are subject to the AML/CFT
laws. As such, banks are required to identify and verify their customers and
the beneficial owner(s) of their customers. Banks and other financial insti-
tutions are required to conduct on-going monitoring and must retain these
records for a period of at least ten years after the termination of the business
relationship or the execution of the financial transaction.
192. During the current review period, Spain received several requests for
banking information. Peers were satisfied with the quality of the responses
received. Spain was generally able to provide the information requested.
193. The table of determinations and ratings is as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

A.3.1. Availability of banking information


194. Jurisdictions should ensure that banking information, including ben-
eficial ownership information, is available for all account holders.
195. As part of the AML CDD measures, banks and other financial insti-
tutions, as AML: obliged person, are required to: (i) determine the structure

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Part A: Availability of information– 59

of ownership and control of entities and (ii) identify and take reasonable


measures to verify the identity of the beneficial owner(s), as a condition to
establish the business relationship or executing an occasional transaction
(section 4 AML/CFT Act).
196. As indicated under section A.1.1, the identification of the cus-
tomer (individual or legal person) must be based on reliable and irrefutable
documentary evidence, such as: official identification documents, a deed of
incorporation or extract from the Chamber of Commerce and Industry or
other competent authority (section 6 of Royal Decree 304/2014). Banks are
prohibited from opening or maintain anonymous accounts.
197. The 2016 ToR specifically require that beneficial ownership informa-
tion be available in respect of all account holders. The identification process
of beneficial owners is an integral part of the CDD procedure. Current provi-
sions (section 7 of the AML/CTF Act) provide that banks must apply CDD
measures (including the identification and verification of beneficial owners)
when establishing a business relationship or performing an occasional wire
transfer for an amount exceeding EUR 1 000 or performing other occa-
sional transaction over a EUR 15 000 threshold (section 9.1 of Royal Decree
304/2014).
198. For these purposes, an obliged person can rely on a sworn declara-
tion by the customer to identify the BOs. However, the obliged person must
obtain documentary proof or information from reliable third party sources
in order to verify the identity of the beneficial owner(s) when: (i) there are
doubts regarding the adequacy and veracity of the information declared by
the customer or (ii) when there are circumstances requiring enhanced CDD. 8
According to Article 7.3 of the AML/CFT Act, obliged entities should not
establish business relationships when they cannot apply CDD measures. If
the CDD cannot be applied to a current client, obliged entities should close
the account and analyse its operations.
199. As previously indicated under section A.1.1, Spain’s AML legal
framework (section 4 AML/CFT Act and section 8 of Royal Decree 304/2014)
is in line with the beneficial ownership definition under the 2016 ToR.
According to Spain’s AML/CFT Act, a beneficial owner is: “the natural
person(s): (a) on whose behalf the relationship is to be established or the

8. The situations where enhanced measures are required are: (a) non-face-to-face


business, cross-border correspondent banking, transactions with Politically
Exposed Persons (AML/CFT Law sections 12 to 15), and (b) situations that
by their nature can present a higher risk, including those listed in regulation
(e.g. private banking, money remittance, foreign exchange operations, companies
which use bearer shares) (AML/CFT Law section 11 and Royal Decree 304/2014
section 19).

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60 – Part A: Availability of information

transaction conducted; (b) who ultimately owns or controls (direct or indirect)


25% or more of the capital or voting rights or who, by other means exer-
cises control, directly or indirectly controls, over the management of a legal
person; or (c) who owns or controls 25% or more of the property of a legal
arrangement, or, where the beneficiaries have yet to be determined, the class
of persons in whose interest the legal arrangement is set up”. Royal Decree
304/2014 includes additional detail, such as in section 8, which contains the
obligation to identify the senior managing official in cases where no natural
person is identified under the definition of beneficial owner set out above. In
the case of trusts, section 9.5 of Royal Decree 304/2014 requires banks to iden-
tify the settlor, trustee(s), protector(s), beneficiary or class of beneficiaries, and
any other natural person exercising control over the trust. For other relevant
legal arrangements (including fiducias), the person(s) holding equivalent or
similar positions in the case of trusts must be identified.
200. Regarding the retention period, the AML legal framework requires
obliged entities to keep documentation gathered for compliance with the
AML framework (including copies of documents obtained through the CDD
process) for ten years from the termination of the business relationship or the
completion of an occasional transaction (section 25 of the AML/CFT Act and
section 28 to 30 of Royal Decree 304/2014).
201. An obliged person is allowed to rely on CDD measures applied by
certain third parties, with the exception of ongoing monitoring of the business
relationship. The reliance on a third party is only possible if the third party
is subject by the AML/CF of other Member States of the European Union
or equivalent third countries, even if the documents or data required by the
latter are different to those under the Spanish AML/CTF Act. However, the
obliged person remains ultimately responsible for ensuring that CDD meas-
ures are applied in accordance with the Spanish AML framework, even when
the breach is attributable to the third party. Reliance on third parties for the
implementation of due diligence measures shall require the prior execution
of a written agreement between the obliged person and the third party to for-
malise the respective obligations. This agreement must contain the obligation
for the third parties to make information obtained in application of the due
diligence measures immediately available to the obliged person. Likewise,
the agreement has to oblige the third parties to send the obliged person, at
the request of the latter, a copy of the relevant documents pursuant to this
section (section 8 of the AML/CTF Act and section 13 of the Royal Decree
304/2014).
202. Beneficial ownership information should be regularly updated
according to a risk-based approach. Banks and other financial institutions
must prepare a handbook on the prevention of money laundering and terrorist
financing. The handbook is to include the timing as to how often information

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Part A: Availability of information– 61

is to be updated. For clients with higher than average risk, 9 that information
must be updated, at least, annually (Art. 11.2 Royal Decree 304/2014).
203. Since January 2016, credit institutions are obligated to report infor-
mation regarding the opening and cancellation by any individual or legal
person of current accounts, savings accounts, securities accounts and term
deposits to SEPBLAC. This also includes information regarding the legal
and beneficial owner(s) of the account or deposit. SEPBLAC includes this
information in the Financial Ownership File, which is a centralised database,
which contains prescribed information on all customers’ bank and securi-
ties accounts in Spain. The information in the database includes the date of
account opening, the name of the account holder, the name of the beneficial
owner, the name of the financial institution and the branch location.
204. SEPBLAC and the Bank of Spain supervise banks’ compliance with
AML/CTF obligations. SEPBLAC and Bank of Spain carry out their super-
visory duties mainly through on-site and off-site activities. In the event a
financial institution is non-compliant with the law, SEPBLAC and Bank of
Spain may impose formal or informal enforcement measures.
205. In the case of severe infringements of the AML framework, both
pecuniary and non-pecuniary sanctions may be applied, including the revoca-
tion of the financial institution’s license. Non-compliance with identification
of beneficial owner(s) or record keeping obligations is considered to be a
severe infringement, which can be sanctioned with (i) either a private or public
warning; and (ii) a fine that ranging from EUR 60 001 up to EUR 150 000.
206. It should be noted that under Section 54 of the AML/CFT Act, those
who hold administration or management posts in or for an obliged person,
whether individually or in professional associations, may be liable for any
infraction attributable to their wilful or negligent misconduct. During 2015
and 2016 no sanctions were imposed to persons holding administration or
management posts.
207. The enforcement and oversight of the AML/CTF framework is already
described in section A.1 of this report, in paragraphs 92 to 103.
208. In practice, Spain has not had any difficulty in obtaining banking
information for its EOI partners and no concerns in respect of availability of
banking information were reported by the peers.

9. An accurate description of customers potentially posing a higher than average


risk has to be included in the AML/CTF manual that all obliged persons shall
have. The description shall be based on a statutory provision (such as the ones
provide on section 19 of Royal Decree 304/2014) or resulting from the risk
analysis.

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Part B: Access to information– 63

Part B: Access to information

209. Effective exchange of information requires that a jurisdiction’s compe-


tent authority has adequate powers to access and obtain a variety of information
that may be relevant to a tax inquiry. Jurisdictions should also have in place
effective enforcement mechanisms to compel production of information.
Sections B.1 and B.2 evaluate whether the competent authority has the power
to obtain and provide information that is the subject of a request under an EOI
agreement from all relevant persons within their territorial jurisdiction and
whether any rights and safeguards in place are compatible with effective EOI.

B.1. Competent authority’s ability to obtain and provide information


Competent authorities should have the power to obtain and provide information
that is the subject of a request under an exchange of information arrangement
from any person within their territorial jurisdiction who is in possession or
control of such information (irrespective of any legal obligation on such person
to maintain the secrecy of the information).

210. Spain’s access powers were assessed under the 2010 ToR and found
to be generally adequate. In the 2011 Report, element B.1 was determined to
be “in place” and rated Compliant. Spain’s tax authorities have broad powers
to obtain bank, ownership, identity, and accounting information and to
compel the production of such information where needed. Spain’s competent
authority is empowered to obtain all such information from any person within
its jurisdiction who is in possession of the information. Since the last review,
no relevant changes to the legal framework have been made.
211. Under Spanish law, the powers to access information do not vary
depending on the type of information sought. That is, the powers can be con-
sistently applied regardless of whether the information is ownership, identity,
banking or accounting information.
212. Much of the information requested by EOI partners continues to be
contained in the Tax Administration’s database or directly accessible by the
tax administration from the Commercial Registrar, the Property Registrar
and the Notaries Sole Index database.

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64 – Part B: Access to information

213. When the requested information is not found in the database or regis-
try, the tax administration uses its broad access powers to obtain information.
In particular, these powers allow the authorities to request information from
any person who may have the information sought. Banking secrecy is lifted
in all tax matters. There are enforcement measures available to compel the
disclosure of information, but they often do not need to be used. This legal
framework allows the Spanish tax authorities to collect the information
requested by their partners.
214. The table of determinations and ratings remains as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

B.1.1. Ownership, identity and bank information and


B.1.2 Accounting records
215. The 2011 Report concluded that appropriate access powers are in
place for EOI purposes. The Tax Administration has broad access powers to
obtain all types of relevant information including ownership, accounting and
banking information from any person for EOI purposes. These same rules
continue to apply following the 2011 Report.

General access to information


216. In Spain, the competent authority, which handles EOI requests, is
the head of the Information Office of the Tax Administration (ECI: Equipo
Central de Información). This office gathers information for both domestic
and international tax purposes.
217. Pursuant to the Section 177 ter of the General Tax Law, all provisions
and procedures for collecting information for domestic purposes contained
in the General Tax Law may be used to gather information for EOI purposes.
218. Section 29 of the General Tax Law sets out the general obligations of
taxpayers. According to this section, taxpayers have an obligation to provide
the tax authorities with any books, records, documents or other information
that the taxpayer is under a duty to preserve in connection with the perfor-
mance of his/her own or a third party’s tax obligations. In addition, it states
that taxpayers must summit on demand by the tax authorities or by means of
periodic returns any data, report, background particulars or evidence having
significance for tax purposes.

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Part B: Access to information– 65

219. Subsection 93(1) of the General Tax Law sets out further obliga-
tions on any person, entity or arrangement to provide the tax administration
with any type of information having tax significance in connection with the
performance of their own tax obligations or linked to their economic, profes-
sional or financial relations with others. This provision also includes banks
and other financial institutions.
220. Section 94 of the General Tax Law is similar to subsection 93(1) but
applies to public authorities. It specifies that the requested public authority
does not need to obtain the consent of the person subject of a request before
providing the tax administration with the information. In particular, the
SEPBLAC must provide the tax administration with any information of tax
relevance it may request, provided that the request comes from the director
of the concerned tax department (section 94(4) of the General Tax Law and
section 56 of the General Regulation on Tax Auditing).
221. According with section 37 to 42 ter of Royal Decree 1065/2007,
financial institutions have to provide annually to the tax administration
information with relation to all financial accounts they hold. This information
must include: (i) the full identification of the account holder, (ii) the balance
of the account at the end of the calendar year and (iii) the average monthly
account balance. Additionally, the financial institutions should annually pro-
vide to the tax administration information about all granted loans and credits,
all debit and credit card payments, all cheques that were issued, among other
information. Therefore, the tax administration has a robust database regard-
ing bank information.

Access to ownership and accounting information in practice


222. The main sources of ownership, accounting and banking informa-
tion are the tax administration’s database. The tax administration’s database
is directly accessible by the EOI Unit and contains information obtained for
domestic tax purposes. This database also contains information from the
periodic declarations made by third parties such as public notaries and the
Commercial Registry.
223. In addition, the competent authority has direct access to the
Commercial Registry. This access allows the competent authority to obtain
all information held by the register about the identity of owners of commer-
cial entities and other entities registered with them without having to exercise
any particular power to access it. The competent authority also has direct
access to the Notaries Sole Index, which as previously mentioned, contains
entities’ legal and beneficial ownership information.
224. When a request for information received cannot be answered satis-
factorily using the tax administration’s database, the Commercial Registry

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66 – Part B: Access to information

or the Notaries Sole Index, the competent authority will issue a notice to a
taxpayer or any third party to provide information, generally within 10 work-
ing days of receipt of the notice. The process to issue a notice is systematic
and there is a template form for the notice. This form does not mention that
the information is requested for EOI purposes.
225. Occasionally, Spanish officials will visit companies to obtain infor-
mation. In these cases the local tax office is required to visit the information
holder and collect the information.
226. There were no cases during the review period where the scope of
access powers limited the Competent Authority’s ability to obtain information
for EOI purposes. Also, no concerns were reported by peers.

Access to banking information in practice


227. As the tax administration’s database already contains extensive bank
information, when the requesting partner provides the information for the
identification of either the bank account or the account holder, the competent
authority can often exchange bank information without having to collect the
information from the bank or the account holder.
228. In the cases where the information is not available in the tax
administration database, section 93 of the General Tax Law allows the Tax
Administration to obtain the requested information from the banks or finan-
cial institutions. The request of information to banks has to be done through
a centralised national office of the tax administration dedicated to the gather-
ing of information from financial institutions for both domestic and exchange
of information purposes. This office is part of the competent authority (ECI).
229. The requests for all or some of the account movements must be
approved and signed by the Head of the Tax Audit Department. The requests
for other bank information (including the identification of the account holder)
does not need any special authorisation; it is approved and signed by the head
of the competent authority office.
230. Information can be requested in writing (usually by electronic means)
or by a visit to the bank. The minimum term that has to be granted to financial
institutions to answer the request for information is 15 days.

B.1.3. Use of information gathering measures absent domestic tax


interest
231. The concept of “domestic tax interest” describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes.

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Part B: Access to information– 67

232. The 2011 Report concluded that the access powers of Spain’s tax
administration are not curtailed by any requirement that its power may only
be exercised where there is a domestic tax interest. There has been no change
in the legal framework in this respect since the first round review.
233. According to the Spanish authorities, Spain had received EOI requests
where the requested information is not relevant for domestic tax purposes.
During the period under review, there was no case where Spain’s access
powers would not be applicable due to lack of domestic tax interest.

B.1.4. Effective enforcement provisions to compel the production of


information
234. Jurisdictions should have in place effective enforcement provisions to
compel the production of information.
235. Failure to comply with a Tax Administration’s request for informa-
tion constitutes a serious tax offence, which may lead to an administrative
pecuniary penalty. This penalty applies irrespective of whether the informa-
tion is requested for domestic or EOI purposes.
236. The pecuniary penalty is a fine that can be graded according to the
number of unattended requests. The fine ranges from EUR 150 to EUR 400 000.
237. The Spanish authorities can also search business premises and seize
documents for EOI purposes, in the framework of a domestic tax audit (sec-
tion 142(2) of the General Tax Law), provided, in the case of private premises,
they obtained the consent of the person or with a judicial order (section 113).
238. The Spanish authorities can seize documents, pursuant to section 146
of the General Tax Law, together with section 181 of the General Regulation
on Tax Auditing. The tax administration can put under seal, deposit or seize
documents in the framework of a tax audit, when the measure is necessary to
prevent the destruction or alteration of evidence of tax obligations.

B.1.5. Secrecy provisions


239. The 2011 Report concluded that the tax administration’s access
powers provide for access to banking information in line with the standard.
There has been no change since the first round review in this respect.

(a) Bank secrecy
240. Bank secrecy in Spain derives from the right to privacy contained
in Article 81.1 of the Constitution. It is codified in Act 26/1988 requiring
financial institutions to keep client information confidential, with certain
exception.

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68 – Part B: Access to information

241. Section 93.3 of the General Tax Law expressly provides that bank
secrecy does not apply to the Tax Administration. Banks and other financial
institutions have an obligation to report information pursuant to section 93 of
the General Tax Law. In addition, there are other provisions in the General
Tax Law requiring them to periodically provide certain types of information
to the tax administration.
242. Any type of banking information can be requested by the tax adminis-
tration, including all or some of the account movements, financial transactions,
supporting documents thereof, identity of the holder of the account of origin or
destination of the movements, cheques, or other debit or credit entries.

(b) Professional privilege
243. Professional secrecy is protected by the Constitution. Not­ with­
stand­ing, section 93(5) of the General Tax Law lifts the professional secrecy
vis-à-vis the tax administration for economic data (e.g. assets and wealth) and
for non-economic data that would not violate the right to honour or personal
and family privacy.
244. The Spanish authorities indicate that this provision also applies with
regard to attorney-client privilege. The courts have determined that, concern-
ing a request for information made by the Spanish tax authorities, the scope
of the attorney-client privilege only covers strictly personal, intimate, non-
patrimonial or confidential data of their clients unconnected to the act of tax
content that serves as a basis for the request of information. 10
245. The Spanish competent authority and its EOI partners indicate that
professional secrecy has never caused any problem in practice.

B.2. Notification requirements, rights, and safeguards


The rights and safeguards (e.g. notification, appeal rights) that apply to persons
in the requested jurisdiction should be compatible with effective exchange of
information.

246. The 2011 Report found that the rights and safeguards applicable to
persons in Spain were compatible with effective EOI. Element B.2 was, there-
fore, determined to be “in place” and rated Compliant.
247. There have been no relevant changes to Spain’s legal framework and
practices concerning rights and safeguards since the 2011 Report. As such,
Element B.2 continues to be determined as “in place” and rated Compliant.

10. National Court Judgment of 20 October 2011 (346/2008).

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Part B: Access to information– 69

248. The table of determinations and ratings remains as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

B.2.1. Rights and safeguards should not unduly prevent or delay


effective exchange of information
249. Spanish domestic law does not require the notification of the person
who is the subject of an EOI request. In addition, when requesting informa-
tion, the Spanish tax authorities do not have to inform the information holder
of the purpose of the request.
250. In practice, the Tax Administration’s database contains a signifi-
cant amount of information and therefore Spain often does not need to seek
information from a third party.
251. An information holder may appeal a request for information from the
Spanish Competent Authority in the same way and under the same conditions
as an appeal to any other administrative act of the tax administration (arti-
cle 227.1 of the General Tax Law). The only person(s) entitled to appeal are
those to whom the request is addressed. The person subject of an EOI request
cannot appeal against the decision of sending the requested information to
the EOI partner. The appellant can have access to the information provided
by the requesting jurisdiction but not to the Competent Authority’s letter.
Under Spanish laws, the communications between Competent Authorities
are strictly confidential and they should not be accessible and obtainable by
the information holder. According to Spain’s Competent Authority, if a Court
were to request additional information, Spain’s Competent Authority would
always ask for permission from the requesting party to disclose the letter of
request or the information provided by the requesting jurisdiction.
252. During the review period, there was only one case where the infor-
mation holder appealed the Spanish Competent Authority’s request letter.
In this case, the information holder argued that the information requested
lacked tax relevance. The Administrative-Economic Court dismissed the
appeal. Therefore, the requested information was collected by the Competent
Authority and sent to the requesting jurisdiction after about a year.
253. The Spanish Competent Authority did not report having experienced
any practical difficulties with the application of rights and safeguards, nor did
any of its EOI partners.

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Part C: Exchanging information– 71

Part C: Exchanging information

254. Sections C.1 to C.5 evaluate the effectiveness of Spain’s EOI in


practice by reviewing its network of EOI mechanisms – whether these EOI
mechanisms cover all its relevant partners, whether there were adequate pro-
visions to ensure the confidentiality of information received, whether they
respect the rights and safeguards of taxpayers and third parties, and whether
Spain could provide the information requested in an effective manner.

C.1. Exchange of information mechanisms


Exchange of information mechanisms should provide for effective exchange
of information.

255. The 2011 Report concluded that the EOI mechanisms in Spain were
“in place” and rated Compliant. At that time, Spain had a large network of
agreements allowing EOI for tax purposes with 99 partner jurisdictions.
256. According to the 2011 Report, Spain had signed 89 DTCs (of which
10 were not in force) and 7 TIEAs. Spain was also Party to the Multilateral
Convention and a signatory to its Protocol. In accordance with the 2011
Report, with the exception of the agreement with Morocco, all of Spain’s EOI
agreements were compliant with the international standard.
257. Since the 2011 Report, the Multilateral Convention as amended by its
Protocol entered into force in respect of Spain on 1 January 2013.
258. In addition, Spain has signed 11 new tax treaties and 7 new protocols
to existing tax treaties. Spain is also bound to other European Union mem-
bers by Council Directive 2011/16/UE of 15 February 2011 concerning the
administrative co-operation in the field of taxation.
259. The table of determinations and ratings remains as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

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72 – Part C: Exchanging information

C.1.1. Foreseeably relevant standard


260. Exchange of information mechanisms should allow for exchange of
information on request where it is foreseeably relevant to the administration
and enforcement of the domestic tax laws of the requesting jurisdiction. This
concept, as articulated in Article 26 of the OECD Model Tax Convention, is
to be interpreted broadly, but does not extend so far as to allow for “fishing
expeditions”. The Article 26 commentary recognises that the standard of
“foreseeable relevance” can be met when alternative terms are used in an
agreement, such as “necessary” or “relevant”. The 2011 Report concluded
that all of Spain’s DTCs, except the DTC with Morocco, met the foreseeably
relevant standard. This continues to be the case, The 2011 Report also found
that Spain’s TIEAs met the foreseeably relevant standard.
261. The 2011 Report concluded that the DTC with Morocco did not
cover all information that may be foreseeably relevant to the implementation
of the administration or enforcement of the domestic laws of the parties, as
it restricted EOI to “carrying out the provisions of the present Convention”.
Following the 2011 Report, the Spanish Government contacted the Moroccan
Ministry of Finance and was informed that Morocco intended to sign the
Multilateral Convention. Morocco signed the Multilateral Convention on
21 May 2013, once Morocco deposits its instrument of ratification, Spain
and Morocco will have an EOI agreement that is in line with the standard
in place. In addition, Morocco’s Phase 2 PRG Report for the First Round of
reviews of November 2016 stated that “Morocco indicated that applies the
principle of foreseeable relevance without restriction.”
262. Spain continues to interpret and apply its EOI agreements consist-
ent with the OECD Model Tax Convention and Model TIEA. All of the new
EOI agreements that Spain has signed since the 2011 Report include the term
“foreseeably relevant”. Spain has renegotiated eight of its EOI agreements to
now include the term “foreseeable relevance”.
263. Spain does not require specific information to prove foreseeable
relevance. However, the requesting jurisdiction must provide the elements
necessary to identify the taxpayer or group of taxpayers. Spain does not
require a specific form to be used for EOI requests.

Group requests
264. None of Spain’s EOI agreements or domestic law contain language
prohibiting group requests. Spain interprets its agreements and domes-
tic law as allowing it to provide information requested pursuant to group
requests in line with Article 26 of the OECD Model Tax Convention and its
commentaries.

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Part C: Exchanging information– 73

265. Spain treats group requests in a similar manner as individual


requests, both in terms of process and the application of the foreseeably rel-
evant standard, in line with commentary on Article 26 of the OECD Model
Convention. Spain confirmed that its access powers enable information to be
obtained for EOI purposes in respect of taxpayers not specifically identified
and has used such powers in this way for domestic purposes.
266. During the review period, Spain received one group request in the
third quarter of 2017. The request is under discussion by the Competent
Authorities. According to Spain, the requested information was not available
in the Spanish Tax Administration database nor directly in possession of third
parties, Spain is going to seek the information from different sources and try
to compile it to provide accurate information. In the meantime, Spain has
requested additional information concerning the identification details of the
cases of non-compliance detected by the requesting jurisdiction.

C.1.2. Provide for exchange of information in respect of all persons


267. All of Spain’s EOI agreements allow for EOI with respect to all per-
sons. Where some of its older DTCs do not explicitly provide that the EOI
provision is not restricted by Article 1 (Persons Covered), Spain has advised
that it interprets the EOI provision to allow exchange with respect to all per-
sons regardless of their residence.
268. The 2011 Report concluded that in the DTC with Morocco the EOI
was limited to residents as this DTC restricts EOI to “carrying out the pro-
visions of the present Convention” and Article 1 of the treaty indicates that
it applies to “persons who are residents of one or both of the Contracting
States”. As mentioned in section C 1.1, following the 2011 Report, the Spanish
Government contacted the Moroccan Ministry of Finance and was informed
that Morocco intended to sign the Multilateral Convention. Morocco signed
the Multilateral Convention on 21 May 2013. Once Morocco deposits its
instrument of ratification and the Multilateral Convention enters into force
for Morocco, Spain and Morocco will have an EOI agreement that is in line
with the standard in place. In addition, Morocco’s Phase 2 PRG Report for the
First Round of reviews of November 2016 stated that “in practice,(Morocco’s]
peers experienced no restrictions to exchange of information based on the
grounds that the person in question was not resident in Morocco.”
269. During the period under review, there was no instance where Spain,
or its EOI partner, refused to exchange information on the basis that the
person of whom the information being requested was not covered by the EOI
provision of the agreement. Also, no issue in this respect was raised by peers.

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74 – Part C: Exchanging information

C.1.3. Obligation to exchange all types of information


270. The OECD Model Tax Convention and the OECD Model TIEA both
require the exchange of all types of information, including bank informa-
tion, information held by a fiduciary or nominee, or information concerning
ownership interests.
271. The 2011 Report noted that although many of Spain’s DTCs did
not specifically include language mirroring Article 26(5) of the Model Tax
Convention, its absence did not restrict the types of information that could be
exchanged and Spain was able to access and exchange information held by
banks and fiduciaries under its domestic law.
272. All of Spain’s TIEAs, the EU administrative co-operation directive,
the Multilateral Convention, and all of Spain’s DTCs and protocols signed
after the first round review, except the DTC signed with Azerbaijan (for
which the Multilateral Convention is in force since 2015), contain wording
akin to Article 26(5) of the Model Tax Convention. Such wording is however
not contained in all of Spain’s older DTCs.
273. The 2011 Report found that 56 of Spain’s DTCs did not specifically
include Article 26(5) of the Model Tax Convention or similar language.
Since the 2011 Report, six of these DTCs 11 were renegotiated to include said
language. Furthermore, only 15 12 of these 56 DTCs are with jurisdictions in
which the Multilateral Convention is not yet in force in those jurisdictions.
These 15 agreements with jurisdictions in which the Multilateral Convention
is not yet in force are applicable in 13 jurisdictions that have not yet been
reviewed by the Global Forum and may have restrictions in access to cer-
tain types of relevant information which would limit effective EOI under
the respective DTCs. 13 However, this is not a concern in practice, as Spain’s
powers to access and provide the relevant information are not constrained by
a reciprocity requirement.
274. During the current review period, Spain was able to respond to
requests for all types of information covered by the standard. No issues were
identified by peers.

11. These six DTCs are with Belgium, Canada, Finland, India, Luxembourg and
Mexico.
12. These 15 DTCs are with Algeria, Bolivia, Cuba, Ecuador, Egypt, North Macedonia,
Iran, Israel, Morocco, Philippines, Thailand, United States, Former Union of
Soviet Socialist Republics (USSR) (which Spain continues to apply to Belarus,
Kirghizstan, Tajikistan and Turkmenistan), Venezuela and Viet Nam.
13. These 13 jurisdictions are Algeria, Belarus, Bolivia, Cuba, Ecuador, Egypt, Iran,
Kirghizstan, Tajikistan, Thailand, Turkmenistan, Venezuela and Viet Nam.

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Part C: Exchanging information– 75

C.1.4. Absence of domestic tax interest


275. EOI partners must be able to use their information gathering
measures even though invoked solely to obtain and provide information
to the requesting jurisdiction. The 2011 Report noted that many of Spain’s
DTCs lacked a provision, mirroring Article 26(4) of the OECD Model Tax
Convention. The 2011 Report noted, however, that the absence of such a
provision did not create any restrictions provided that there was no domestic
tax interest impediment in the case of either contracting party. As discussed
under element B.1, Spain’s law has no such impediment.
276. All of Spain’s TIEAs, the EU administrative co-operation directive,
the Multilateral Convention, and all of Spain’s DTCs and protocols signed
after the first round review contain wording akin to Article 26(4) of the
Model DTC.
277. The 2011 Report found that 54 of Spain’s DTCs do not specifically
include Article 26(4) of the OECD Model Tax Convention or similar lan-
guage. Six of these DTC 14 were renegotiated, after the 2011 Report, to include
said language. Furthermore, only 15 15 of these 54 DTCs are with jurisdictions
in which the Multilateral Convention is not yet in force in those jurisdictions.
These 15 agreements with jurisdictions in which the Multilateral Convention
is not yet in force are applicable in 13 jurisdictions that have not yet been
reviewed by the Global Forum and may have restrictions in accessing infor-
mation regardless of domestic tax interest which would limit effective EOI
under the respective DTCs. 16 However, this is not a concern in practice, as
Spain’s powers to access and provide the relevant information are not con-
strained by a reciprocity requirement.
278. No issues arose in practice during the current review period. Spain
reports it would seek to include language similar to Article 26(4) of the Model
Tax Convention in any new or renegotiated DTC.

C.1.5. Absence of dual criminality principles


279. All of Spain’s EOI agreements require the exchange of information
regardless of whether the conduct under investigation, if committed in Spain,
would constitute a crime. No issues in respect of dual criminality were iden-
tified in the 2011 Report and no such issues arose during the current review
period.

14. See footnote 12 above.


15. See footnote 13 above.
16. See footnote 14 above.

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76 – Part C: Exchanging information

C.1.6. Exchange information relating to both civil and criminal tax


matters
280. All of Spain’s EOI agreements provide for exchange of information in
both civil and criminal matters. Spain has responded to requests, during the
review period, in respect of both criminal and civil tax matters. Peers have
not raised any issues in practice.

C.1.7. Provide information in specific form requested


281. There are no restrictions in Spain’s EOI agreements or domestic laws
that would prevent it from providing information in a specific form. During
the review period, Spain reports that it provided information in the specific
form requested by partners, if so indicated. No peers raised any concerns.

C.1.8. Signed agreements should be in force


282. Exchange of information cannot take place unless a jurisdiction has
EOI agreements in force. Where EOI agreements have been signed, the inter-
national standard requires that jurisdictions must take all steps necessary to
bring them into force expeditiously.
283. Spain’s EOI network comprises of 99 agreements, 17 consisting
of 90 DTCs, eight TIEAs and the Multilateral Convention. Out of these
99 agreements, 93 18 are in force. Out of the six jurisdictions with which Spain
has a DTC or a TIEA that is currently not in force, only one jurisdiction
(Cabo Verde) is not party to the Multilateral Convention.
284. According to Spain’s authorities, it is expected that during 2019 the
proceedings for ratification of the six pending treaties shall be concluded, if
there are no unexpected circumstances.
285. The following table summarises the outcomes of the analysis under
element C.1 in respect of Spain’s bilateral EOI mechanism (i.e. regardless
of whether Spain has an EOI instrument can exchange information with the
particular treaty partner also under a multilateral instrument).

17. These figures reflect the number of agreements and not the number of jurisdic-
tions covered by the agreements. There are cases where an agreement covers
more than one jurisdiction (e.g. the Former USSR agreement is counted as one
agreement even though it covers 5 jurisdictions).
18. The six agreements that are not yet in force are the TIEAs with Guernsey,
Jersey and Isle of Man; and the DTCs with Azerbaijan, Cabo Verde and Peru.
Additionally, the DTC protocols signed with Belarus, India and Romania are not
yet in force.

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Part C: Exchanging information– 77

EOI bilateral mechanisms

Total
A Total Number of DTCs/TIEAS A=B+C 98
B Number of DTCs/TIEAs signed (but pending ratification), i.e. not in force B=D+E 6
C Number of DTCs/TIEAs signed and in force C=F+G 92
D Number of DTCs/TIEAs signed (but pending ratification) and to the Standard 6
E Number of DTCs/TIEAs signed (but pending ratification) and not to the Standard 0
F Number of DTCs/TIEAs in force and to the Standard 91
G Number of DTCs/TIEAs in force and not to the Standard 1

C.1.9. Be given effect through domestic law


286. For information exchange to be effective, the parties to an EOI agree-
ment need to enact any legislation necessary to comply with the terms of
the arrangement. For a DTC or TIEA to have effect, its ratification must be
authorised by the Spanish Parliament, assented by the King, and its text must
be published in the Official Gazette. Once a DTC or TIEA comes into force,
Spain does not need to take additional measures to make it effective.

C.2. Exchange of information mechanisms with all relevant partners


The jurisdiction’s network of information exchange mechanisms should cover
all relevant partners.

287. The 2011 Report found that the negotiation of some EOI agreements
was stalled for reasons not linked to the EOI purposes. The issue concerned
was the conclusion of treaties with a number of Overseas Territories and
Crown Dependencies of the United Kingdom. As such, element C.2 was
determined to be “in place, but certain elements of the implementation of the
element need to improve” and rated Largely Compliant.
288. Since the previous report, TIEAs have been signed with Guernsey,
Isle of Man and Jersey, and are pending Spain’s parliamentary approval.
Additionally, the United Kingdom declared the extension of the Multilateral
Convention to all the Overseas Territories and Crown Dependencies.
Accordingly, there is an EOI mechanism in place between Spain and the
Overseas Territories and Crown Dependencies of the United Kingdom.
289. Also since the 2011 Report, Spain’s treaty network has expanded from
99 jurisdictions to 142 due to both the increase in Spain’s network of bilateral
treaties (three new TIEAs and eight new DTCs have entered into force) as well
as through the expansion in the number of the Multilateral Convention signa-
tories. Spain has been active in expanding its EOI network over the years and
has never refused to enter into an EOI agreement. Accordingly, Spain’s EOI

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78 – Part C: Exchanging information

network encompasses a wide range of counterparties, including all of its major


trading partners, all the G20 members and all OECD members.
290. Spain has in place an active negotiation programme which includes
renegotiating of existing DTCs to ensure that that they are up to date and in
line with international standards and expansion of its already existing treaty
network so that all relevant partners are covered. No jurisdiction has reported
any refusal by Spain to agree an EOI arrangement during the review period.
Spain should nonetheless continue to conclude EOI arrangements with any
new relevant partner who so require it.
291. The updated table of recommendations, determination and rating is
as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

C.3. Confidentiality
The jurisdiction’s information exchange mechanisms should have adequate
provisions to ensure the confidentiality of information received.

292. The 2011 Report concluded that the applicable treaty provisions and
statutory rules that apply to officials with access to treaty information and
the practice in Spain regarding confidentiality were in accordance with the
standard.
293. Since the 2011 Report, Spain has continued to ensure that its EOI
confidentiality practices meet the high requirements of the standard.
294. The table of determinations and ratings remains as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

C.3.1. Information received: disclosure, use and safeguards


295. The 2011 Report concluded that all of Spain’s EOI agreements have
confidentiality provisions based on the Model Tax Convention or Model

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Part C: Exchanging information– 79

TIEA. While the provisions varied in wording, they were found to generally
contain all essential aspects. Similarly, Spain’s domestic laws were found to
be in line with the standard.
296. The 2011 Report also concluded that the Tax Administration had
in place adequate information security arrangements in the areas of human
resources, physical security, handling and storage of information and its trans-
mission to and from foreign competent authorities that ensured the requirements
of the standard were met. These arrangements have not significantly changed
since the last review.
297. Pursuant to section 177 ter of the General Tax Law, information
provided by other jurisdictions shall treated as confidential information.
According to the Spanish Tax Administration, the request letter is considered
as confidential information. To protect the confidentiality of this informa-
tion, the EOI notice sent to a third-party information holder only includes
the information requested by the requesting jurisdiction. The requested
person is also informed of any relevant deadline to be met, as well as of the
consequences of non-compliance, of the appeals and claims that may be filed
against the EOI notice.
298. According to Spanish Tax Law, taxpayers under audit have the right
to access all the information included in the administrative file in order to be
able to defend themselves. This right is limited by third parties’ interests or
rights and by the regulations where applicable. The communications between
competent authorities are strictly confidential and should not be accessible
and by the taxpayer. Where the reply is included in the Competent Authority
response letter any information not concerning the taxpayer (Competent
Authority details, third parties’ information, etc.) would be deleted/struck-
through and this version is the one accessible by the taxpayer.
299. The disclosure of confidential and secret information by a public
official constitutes a very serious disciplinary offence for which the Tax
Administration can impose penalties, such as the suspension of functions, a
forced transfer or even removal from office. Additionally, a breach may con-
stitute a criminal offence with sanctions of up to four years of imprisonment.
300. All Tax Administration employees and contractors undergo multiple
trainings that include information on the applicable confidentiality policies.
For example, employees receive sensitisation to the Code of Conduct, infor-
mation security training (which covers elements of information awareness
and security controls), and security access briefings.
301. Access to EOI data is limited to those employees that have received
previous authorisation.

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80 – Part C: Exchanging information

302. The confidentiality policies are designed to respect the requirements


of the international information security standard. The policies apply to
all information held by the Tax Administration, including the information
exchanged with Spain’s EOI partners.
303. Physical access to Tax Administration buildings, including where
the EOI Unit is located, is strictly controlled and public access is forbidden
except for limited areas where Tax Administration staff accompaniment is
required at all times.
304. Access to information systems is provisioned on a strict “need to
know” basis with strong identification, authentication and logging. All
accesses to the systems are identified and stored by the control access system.
Periodic audits are conducted to supervise unauthorised access or improper
use of the information.
305. Regarding physical documentation, the Tax Administration has
endorsed a non-paper policy since 2009; therefore, original papers are digital-
ised and stored on secure archives. When, occasionally, physical documentation
is needed to be examined, it should be stored in secure cabinets. There are
appropriate procedures to dispose of information according to business needs.
306. Adequate planning, security and risk assessment processes are in
place and are in conformity with internationally accepted good standards.
307. According to the Spanish authorities, there has not been a case in
which information received from an EOI partner was improperly disclosed.
Peers have indicated no such case or concern in this respect.

C.3.2. Confidentiality of other information


308. Confidentiality rules should apply to all types of exchanged infor-
mation, including information provided by a requesting jurisdiction in a
request, information transmitted in response to a request and any background
documents to such request. Spanish authorities confirm that in practice they
consider all types of information relating to an EOI request confidential
(including communications between Spain and the requesting jurisdiction).

C.4. Rights and safeguards of taxpayers and third parties


The information exchange mechanisms should respect the rights and safeguards
of taxpayers and third parties.

309. The international standard allows requested parties to not supply


information in response to a request in certain identified situations where
an issue of trade, business or other secret may arise. Among other reasons,

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Part C: Exchanging information– 81

an information request can be declined where the requested information


would disclose confidential communications protected by the attorney-client
privilege.
310. The 2011 Report concluded that Spain’s legal framework and prac-
tices concerning the rights and safeguards of taxpayers and third parties was
in line with the standard and element C.4 was determined to be “in place”
and Compliant, with no recommendations made. There have been no changes
to the legal framework or in practice since the 2011 Report.
311. The table of determinations and ratings remains as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

C.4.1. Exceptions to requirement to provide information


312. All of Spain’s EOI agreements contain a provision which ensures that
the contracting states are not obliged to provide information which would
disclose any trade, business, industrial, commercial or professional secret,
trade process or information the disclosure of which would be contrary to
public policy. Further, the EOI Act does not contain exceptions for attorney-
client privilege.
313. As discussed in section B.1.5, there is no professional or banking
secrecy under Spanish domestic law that can be invoked when information is
requested for tax purposes by the tax administration except for information
subject to attorney-client privilege. This privilege is, however, only applicable
to communications between a client and an attorney where the attorney acts
in his or her professional capacity as attorney and therefore is found to be in
line with the standard.
314. As mentioned on section B.1.5, according to the Courts, the attorney-
client privilege only covers strictly personal, intimate, non-patrimonial or
confidential data of their clients unconnected to the act of tax content that
serves as a basis for the request of information. 19 Therefore, the information
obtained by an attorney due to its performance as company manager or agent,
for giving economic counsel or tax planning advice or as in-house legal coun-
sel is not covered by the attorney-client privilege.

19. National Court Judgment of 20 October 2011 (346/2008).

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82 – Part C: Exchanging information

315. During the period under review, there was no case where a person
refused to provide the requested information because of professional privi-
lege. Spain also did not decline to provide the requested information because
it was covered by legal professional privilege or any other professional secret
and no peer indicated any issue in this respect.

C.5. Requesting and providing information in an effective manner


The jurisdiction should request and provide information under its network of
agreements in an effective manner.

316. In order for exchange of information to be effective, jurisdictions


should request and provide information under its network of EOI agreements
in an effective manner. In particular:
• Responding to requests: Jurisdictions should be able to respond
to requests within 90 days of receipt by providing the information
requested or provide an update on the status of the request.
• Organisational processes and resources: Jurisdictions should have
appropriate organisational processes and resources in place to ensure
quality of requests and quality and timeliness of responses.
• Restrictive conditions: EOI assistance should not be subject to unrea-
sonable, disproportionate, or unduly restrictive conditions.
317. In the first round review, Spain’s timeliness of responses to EOI
requests was found to be adequate (Spain responded to most EOI requests
within 90 days). The 2011 Report also found that Spain’s Competent
Authority had sufficient resources to carry out its EOI duties. However, Spain
often failed to provide status updates when it was not able to respond to EOI
requests within 90 days. Therefore, Spain was recommended to implement
a system for advising requesting jurisdictions of the status of their request,
when the competent authority is not in a position to respond within 90 days.
318. In order to address this recommendation, Spain has implemented
new procedures to ensure that status updates are provided in cases where
responding to a request takes longer than 90 days. Peer input has been mostly
positive.
319. The updated table of determinations and ratings is as follows:

Legal and Regulatory Framework


Determination: In Place
Practical Implementation of the standard
Rating: Compliant

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Part C: Exchanging information– 83

C.5.1. Timeliness of responses to requests for information


320. Over the current period under review (1 January 2015 to
31 December 2017), Spain received a total of 1 775 requests for informa-
tion. 20 The following table sets out the number of requests received during
the period under review and Spain’s response times, together with a summary
of other relevant factors impacting the effectiveness of Spain’s EOI practice.

2015 2016 2017 Total

  Num. % Num. % Num. % Num. %


Total number of requests received (A+B+C+D+E) 589 576 607 1 772
Full response: = 90 days 398 67.57 395 68.58 434 71.50 1 227 69.24
= 180 days (cumulative) 544 92.36 534 92.71 572 94.23 1 650 93.12
= 1 year (cumulative) (A) 588 99.83 570 99.96 606 99.84 1 764 99.55
> 1  year (B) 0 0 2 0.35 0 0 2 0.11
Declined for valid reasons 1 1 1 3
Status update provided within 90 days (for outstanding cases NA NA NA NA NA NA NA NA
with full information not provided within 90 days, responses
provided > 90 days)*
Requests withdrawn by requesting jurisdiction (C) 0 4 0.69 0 4 0.23
Failure to obtain and provide information requested (D) 0 0 0 0 0
Requests still pending at date of review (E) 1 0.17 0 0.0 1 0.16 2 0.11
Notes: Spain generally counts the EOI request by taxpayer, so that a new request is open per taxpayer.
The time periods in this table are counted from the date of receipt of the request to the date on
which the final and complete response was issued.
* Spain could not produce statistics of the status updates provided during the review period. A
modification was introduced to the INTER IT system (see further explanation below in 5.2) in
order to capture the information of the provided status update.

321. There does not appear to be a direct relationship between the type of
information requested and the ability to respond to a request within 90 days.
The fact of not being able to respond within 90 days may be due to differ-
ent causes, e.g. very complex cases; requests for bank information involving
gathering a lot of documentation underlying specific transactions; requests
for information concerning periods earlier than those determined as threshold
for keeping documentation (6 years), or requests concerning transfer pricing
cases.

20. This number includes the three requests of information declined for valid
reasons.

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84 – Part C: Exchanging information

322. Further, the Spanish Competent Authority indicate that there was no
failure by Spain, during the review period, to provide information respond-
ing to an EOI request. Spain always provided partial responses once part of
the relevant information was available. In the very limited number of cases
where Spain was not able to provide a full response, Spain did provide an
explanation to the requesting jurisdiction of the steps taken and the reason(s)
why the full information could not be provided. During the review period,
three requests were declined for valid reasons: two being fishing expeditions
and one being a request from a prosecutor for assistance not related with tax
matters.
323. As seen from the table above, less than 1% of the requests received
during the review period are pending. These requests do not relate to a par-
ticular type of information.

Status updates and communication with partners


324. The 2011 Report recommended that Spain promptly implement a
system for advising requesting jurisdictions of the status of their requests
within 90 days in those cases where it was not possible to provide complete
responses within that timeframe.
325. To address this recommendation, in October 2015 the Spanish
Competent Authority updated its EOI computer application to automatically
send an email notification to the tax official in charge of managing the EOI
request, urging him/her to send a corresponding status update. This e-mail
notification is sent after 80 days have elapsed since the EOI request was
received. Additionally, at EU level, an electronic form is now used to send
an acknowledgement of receipt of the EOI request and includes providing
information regarding the expected time to answer the request.
326. A new update was introduced in the last quarter of 2017 to the EOI
computer application to record status update information, including statistical
information. Spain will be able to provide statistics of the status update for
EOI request received on year 2018 and afterwards.
327. The majority of peers confirmed that status updates were system-
atically provided in cases where the request was not responded to within
90 days. Six peers indicated that they were never provided with status
updates; nonetheless, four of the six peers that reported that they never
received status update are EU members; therefore, they did received status
update through the EU electronic form. Additionally, another peer reported
that there has been a great improvement by Spain in sending the 90-day
status updates since 2017.

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Part C: Exchanging information– 85

C.5.2. Organisational processes and resources

(a) Identification of competent authority


328. The competent authority of Spain is clearly identified to partners
on the Global Forum’s secure competent authorities database. Additionally,
within the EU, the competent authority’s contact details are included in the
CIRCA database

(b) Resources and training


329. The EOI competent authority function is delegated to the head of
the Information Office (Equipo Central de Información, ECI). In practice,
treaty partners are given the co-ordinates of the latest delegated person, who
receives all EOI requests.
330. The ECI counts seventeen officers in charge of all EOI requests
received and sent by Spain in direct taxation matters: one head, two tax
inspectors, eight technical tax experts, three tax agents, two full-time
administrative staff and one part-time administrative staff. Staff members
have belonged to ECI for three years on average and all have been trained
in the Spanish Public School of Tax and received basic training on exchange
of information. Every year they receive some training on audits and other
relevant matters.
331. The ECI relies on its dedicated IT application to deal with requests
for information. This application, called INTER, is the system through which
all requests are managed. It allows knowing in real time at which stage of the
procedure an EOI request is.
332. Statistics are prepared on a monthly basis to verify the degree of
compliance on handling of requests. On an annual basis, this information is
compiled and included in the ECI’s report.

(c) Incoming requests
333. The typical routing of an incoming request is as follows: the compe-
tent authority (ECI) receives the EOI request, makes a new entry into the EOI
IT system (which is called INTER) and scans all the documents received. It
then confirms its admissibility and acknowledges receipt within one or two
days by mail post, or secured e-mail system within the EU. It informs the
EOI partner of the allocated reference number of the request, to ease future
communications on the request.
334. If there is any ambiguity in the request, or if details essential to find
the information are missing (typically if the person cannot be identified in

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86 – Part C: Exchanging information

the tax databases), ECI contacts its counterpart. Many EOI partners of Spain
declared that communication with ECI was easy, and prompt responses were
received.
335. The powers of the ECI to obtain information are broad; therefore,
the ECI official assigned to the handling of a request analyses its content
and decides whether to collect the information him/herself from available
databases or use the ECI powers to request the information from the person
or entity that holds the requested information. Only in some very specific
cases, the ECI official would require a local administrative tax office to col-
lect the information (e.g. when an on-site inspection is needed). If part of the
information is in the tax databases or other accessible databases, this is sent
to the requesting authority with a note indicating that the rest of the request
is being processed.
336. Once the person that owns or controls the information provides it, the
ECI official verifies that said information responds to the questions raised by
the requesting jurisdiction. In the event that some information or documenta-
tion is missing, a new request is sent to the person that owns or controls that
information, asking for their submission.
337. Once the competent official considers that all the information and
documentation requested by the requesting jurisdiction has been received,
that ECI official prepares a formal response and attaches any relevant
complementary documentation. The ECI’s head reviews that response and
documents before sending it to the requesting jurisdiction.

(d) Outgoing requests
338. The 2016 ToR also addresses the quality of requests made by the
assessed jurisdiction. Jurisdictions should have in place organisational pro-
cesses and resources to ensure the quality of outgoing EOI requests.
339. The EOI work manual used by Spain contains procedures that all tax
inspectors must follow in making outgoing requests, including a template for
the EOI request to ensure they meet the foreseeable relevance standard
340. Any tax inspectors, after having exhausted the internal sources of
information, can enter in INTER a request for tax relevant information that
is held abroad. Once the request is registered, the ECI officials review the
request and ask the inspector for any clarification or supporting documenta-
tion deemed necessary, as the case may be. Once the necessary information
is available. If the request meets the foreseeable relevance standard, an ECI
official prepares the request.
341. ECI’s officials have to verify that all EOI requests meet the require-
ments of the international standard for the exchange of information.

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Part C: Exchanging information– 87

Additionally, they must follow up on the requests until full response by the
requested jurisdiction is received.
342. Spain made 2 014 requests during the review period to 74 treaty
partners. Overall peers were positive about the quality of the requests sent by
Spain. Peer feedback indicated that foreseeable relevance was generally met
and the requests for clarification did not tend to create delays in the process.

C.5.3. Unreasonable, disproportionate or unduly restrictive


conditions for EOI
343. Exchange of information should not be subject to unreasonable, dis-
proportionate or unduly restrictive conditions. There are no factors or issues
identified in Spain laws that could unreasonably, disproportionately or unduly
restrict effective EOI.

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ANNEXES – 89

Annex 1: List of in-text recommendations

Issues may have arisen that have not had and are unlikely in the current
circumstances to have more than a negligible impact on EOIR in practice.
Nevertheless, there may be a concern that the circumstances may change and
the relevance of the issue may increase. In these cases, a recommendation
may be made; however, such recommendations should not be placed in the
same box as more substantive recommendations. Rather, these recommenda-
tions can be mentioned in the text of the report. However, in order to ensure
that the Global Forum does not lose sight of these “in text” recommendations,
they should be listed in an annex to the EOIR report for ease of reference.
• Element A.1.1: Spain should monitor and enforce the effec-
tive compliance of the new obligation – established under Order
JUS/319/2018 – of companies and partnerships to annually submit to
the Commercial Registry a form identifying their beneficial owners.
• Element A.1.1: Spain should therefore further strengthen measures
to ensure that notaries are obtaining adequate, accurate and up to
date beneficial ownership information in all cases.
• Element A.1.4: It is recommended that supervisory activities in the
case of lawyers and TCSPs should be strengthened in view of the
limited number of on-site inspections undertaken and their potential
role in the operation and management of trusts.
• Element C.2: Spain should nonetheless continue to conclude EOI
arrangements with any new relevant partner who would so require.

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90 – ANNEXES

Annex 2: List of Spain’s EOI mechanisms

1. Bilateral international agreements for the exchange of information

EOI partner Type of agreement Signature Entry into force


1 Albania DTC 02/07/2010 04/05/2011
2 Algeria DTC 07/10/2002 06/07/2005
TIEA 14/01/2010 10/02/2011
3 Andorra
DTC 08/01/2015 26/02/2016
DTC 21/07/1992 28/07/1994
4 Argentina
Protocol 11/03/2013 23/12/2013
5 Armenia DTC 16/12/2010 21/03/2012
6 Aruba TIEA 24/11/2008 27/01/2010
7 Australia DTC 24/03/1992 10/12/1992
DTC 20/12/1966 15/03/1967
8 Austria
Protocol 24/02/1995 02/10/1995
9 Azerbaijan DTC 23/04/2014 Not yet in force
10 Bahamas TIEA 11/03/2010 17/08/2011
11 Barbados DTC 1/12/2010 14/10/2011
DTC 01/03/1985 07/08/1986
12 Belarus a
Protocol 14/06/2017 Not yet in force
DTC 14/06/1995 25/06/2003-
13 Belgium Protocol 02/12/2009 23/04/2018
Protocol 15/04/2014 24/07/2018
14 Bolivia DTC 30/06/1997 23/11/1998
Bosnia and
15 DTC 05/02/2008 04/01/2011
Herzegovina

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ANNEXES – 91

EOI partner Type of agreement Signature Entry into force


16 Brazil DTC 14/11/1974 03/12/1975
17 Bulgaria DTC 06/03/1990 14/06/1991
18 Cabo Verde DTC 05/06/2017 Not yet in force
DTC 23/11/1976 26/12/1980
19 Canada
Protocol 18/11/2014 12/12/2015
20 Chile DTC 07/07/2003 23/12/2003
China (People’s
21 DTC 22/11/1990 20/05/1992
Republic of)
22 Colombia DTC 31/03/2005 23/10/2008
23 Costa Rica DTC 04/05/2004 15/12/2010
24 Croatia DTC 19/05/2005 20/04/2006
25 Cuba DTC 03/02/1999 31/12/2000
26 Curaçao  b
TIEA 2008-06-10 27/01/2010
27 Cyprus c DTC 14/02/2013 28/05/2014
28 Czech Republic DTC 08/05/1980 05/06/1981
29 Dominica Republic DTC 16/11/2011 25/07/2014
30 Ecuador DTC 20/05/1991 19/04/1993
31 Egypt DTC 10/06/2005 28/05/2006
32 Estonia DTC 03/09/2003 28/12/2004
33 El Salvador DTC 07/07/2008 13/08/2009
DTC 15/11/1967 30/10/1968
Protocol 22/02/1973 24/04/1973
34 Finland
Protocol 27/04/1990 28/07/1992
DTC 15/12/2015 27/07/2018
35 France DTC 10/10/1995 01/07/1997
36 Georgia DTC 7/06/2010 01-06-2011
37 Germany DTC 03/02/2011 18/10/2012
38 Greece DTC 04/12/2000 21/08/2002
39 Guernsey TIEA 10/11/2015 Not yet in force
40 Hong Kong, China DTC 01/04/2011 13/04/2012
41 Hungary DTC 09/07/1984 20/05/1987
42 Iceland DTC 22/01/2002 02/08/2002

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92 – ANNEXES

EOI partner Type of agreement Signature Entry into force


DTC 08/02/1993 12/01/1995
43 India
Protocol 26/10/2012 Not yet in force
44 Indonesia DTC 30/05/1995 20/12/1999
45 Iran DTC 19/07/2003 30/01/2006
46 Ireland DTC 10/02/1994 21/11/1994
47 Isle of Man TIEA 03/12/2015 Not yet in force
48 Israel DTC 30/11/1999 20/11/2000
49 Italy DTC 08/09/1977 14/11/1980
50 Jamaica DTC 08/07/2008 16/05/2009
51 Japan DTC 13/02/1974 20/11/1974
52 Jersey TIEA 17/11/2015 Not yet in force
53 Kazakhstan DTC 02/07/2009 18/08/2011
54 Kirghizstan  d
DTC 01/03/1985 07/08/1986
55 Korea DTC 17/01/1994 21/11/1994
56 Kuwait DTC 26/05/2008 19/07/2013
57 Latvia DTC 04/09/2003 14/12/2004
58 Lithuania DTC 22/07/2003 26/12/2003
DTC 03/06/1986 19/05/1987
59 Luxembourg
Protocol 10/11/2009 16/07/2011
60 Malaysia DTC 24/05/2006 28/12/2007
61 Malta DTC 08/11/2005 12/09/2006
DTC 24/07/1992 06/10/1994
62 Mexico
Protocol 17/12/2015 27/09/2017
63 Moldova DTC 08/10/2007 30/03/2009
64 Morocco DTC 10/07/1978 16/05/1985
65 Netherlands e DTC 16/06/1971 20/09/1972
66 New Zealand DTC 28/07/2005 31/07/2006
67 Nigeria DTC 23/06/2009 05/06/2015
68 North Macedonia  f
DTC 20/06/2005 01/12/2005
69 Norway DTC 06/10/1999 18/12/2000
70 Oman DTC 30/04/2014 19/09/2015
71 Pakistan DTC 01/01/2010 18/05/2011

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ANNEXES – 93

EOI partner Type of agreement Signature Entry into force


72 Panama DTC 07/10/2010 25/07/2011
73 Peru DTC 06/04/2006 Not yet in force
74 Philippines DTC 14/03/1989 12/09/1994
75 Poland DTC 15/11/1979 06/05/1982
76 Portugal DTC 26/10/1993 28/06/1995
DTC 24/05/1979 28/06/1980
77 Romania
Protocol 18/10/2017 Not yet in force
78 Qatar DTC 10/09/2015 06/02/2018
79 Russia DTC 16/12/1998 13/06/2000
80 San Marino TIEA 06/09/2010 02/08/2011
81 Saudi Arabia DTC 19/06/2007 01/10/2008
82 Senegal DTC 05/12/2006 22/10/2012
83 Serbia DTC 09/03/2009 28/03/2010
84 Singapore DTC 13/04/2011 02/02/2012
85 Sint Maarten g TIEA 10/06/2008 27/01/2010
86 Slovak Republic  h
DTC 08/05/1980 05/06/1981
87 Slovenia DTC 23/05/2001 19/03/2002
88 South Africa DTC 23/06/2006 28/12/2007
89 Sweden DTC 16/06/1976 21/12/1976
DTC 26/04/1966 02/02/1967
90 Switzerland Protocol 29/06/2006 01/06/2007
Protocol 27/07/2011 24/08/2013
91 Tajikistan  i
DTC 01/03/1985 07/08/1986
92 Thailand DTC 14/10/1997 16/09/1998
93 Timor-Leste  j
DTC 30/05/1995 20/12/1999
94 Trinidad and Tobago DTC 09/03/2009 28/12/2009
95 Tunisia DTC 02/07/1982 14/02/1987
96 Turkey DTC 05/07/2002 18/12/2003
97 Turkmenistan  k
DTC 01/03/1985 07/08/1986
98 Ukraine l DTC 01/03/1985 07/08/1986
99 United Arab Emirates DTC 04/07/2006 02/04/2007
100 United Kingdom DTC 14/03/2013 12/06/2014

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94 – ANNEXES

EOI partner Type of agreement Signature Entry into force


101 United States DTC 22/02/1990 21/11/1990
102 Uruguay DTC 09/10/2009 24/04/2011
103 Uzbekistan DTC 08/07/2013 19/09/2015
104 Venezuela DTC 08/04/2003 29/04/2004
105 Viet Nam DTC 07/03/2005 22/12/2005

Notes: a. Spain continues to apply the agreement established with the Former USSR to Belarus.

b. Spain continues to apply the agreement established with the Netherlands Antilles to Curacao.

c. Note by Turkey: The information in this document with reference to “Cyprus” relates to the
southern part of the Island. There is no single authority representing both Turkish and Greek
Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus
(TRNC). Until a lasting and equitable solution is found within the context of the United
Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union: The
Republic of Cyprus is recognised by all members of the United Nations with the exception of
Turkey. The information in this document relates to the area under the effective control of the
Government of the Republic of Cyprus.

d. Spain continues to apply the agreement established with the Former USSR to Kirghizstan.

e. There is also a separate TIEA with the Kingdom of the Netherlands covering Bonaire, Saint
Eustatius and Saba (BES islands).

f. The Republic of North Macedonia, previously known as the Former Yugoslav Republic of
Macedonia, has informed the United Nations and the OECD of its new official name. The
change is effective as of 14 February 2019.

g. Spain continues to apply the agreement established with the Netherlands Antilles to Sint
Maarten.

h. Spain continues to apply the agreement established with Czechoslovakia to the Slovak
Republic.

i. Spain continues to apply the agreement established with the Former USSR to Tajikistan.

j. Spain continues to apply the agreement established with Indonesia to Timor Leste.

k. Spain continues to apply the agreement established with the Former USSR to Turkmenistan.

l. Spain continues to apply the agreement established with the Former USSR to Ukraine.

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ANNEXES – 95

2. Convention on Mutual Administrative Assistance in Tax Matters


(as amended)

The Convention on Mutual Administrative Assistance in Tax Matters


was developed jointly by the OECD and the Council of Europe in 1988 and
amended in 2010 (the Multilateral Convention). 21 The Multilateral Convention
is the most comprehensive multilateral instrument available for all forms of
tax co-operation to tackle tax evasion and avoidance, a top priority for all
jurisdictions.
The original 1988 Convention was amended to respond to the call of the
G20 at its April 2009 London Summit to align it to the international stand-
ard on exchange of information on request and to open it to all countries, in
particular to ensure that developing countries could benefit from the new
more transparent environment. The Multilateral Convention was opened for
signature on 1 June 2011.
Spain signed the 1988 Convention on 12 November 2009 and the
Protocol amending the 1988 Convention on 11 March 2011. The Multilateral
Convention entered into force in respect of Spain on 1 December 2010 while
its amending Protocol entered into force on 1 January 2013.
Currently, the Multilateral Convention is in force in respect of the fol-
lowing jurisdictions: Albania, Andorra, Anguilla (extension by the United
Kingdom), Argentina, Aruba (extension by the Netherlands), Australia, Austria,
Azerbaijan, Bahamas, Bahrain, Barbados, Belgium, Belize, Bermuda (exten-
sion by the United Kingdom), Brazil, British Virgin Islands (extension by the
United Kingdom), Bulgaria, Cameroon, Canada, Cayman Islands (extension
by the United Kingdom), Chile, China (People’s Republic of), Colombia, Cook
Islands, Costa Rica, Croatia, Curaçao (extension by the Netherlands), Cyprus,
Czech Republic, Denmark, Estonia, Faroe Islands (extension by Denmark),
Finland, France, Georgia, Germany, Ghana, Gibraltar (extension by the United
Kingdom), Greece, Greenland (extension by Denmark), Grenada, Guatemala,
Guernsey (extension by the United Kingdom), Hong Kong (extension by the
People’s Republic of China), Hungary, Iceland, India, Indonesia, Ireland, Isle
of Man (extension by the United Kingdom), Israel, Italy, Japan, Jersey (exten-
sion by the United Kingdom), Kazakhstan, Korea, Kuwait, Latvia, Lebanon,
Liechtenstein, Lithuania, Luxembourg, Macau (extension by the People’s
Republic of China) Malaysia, Malta, Marshall Islands, Mauritius, Mexico,

21. The amendments to the 1988 Convention were embodied into two separate
instruments achieving the same purpose: the amended Convention (the Multi­
lateral Convention) which integrates the amendments into a consolidated text,
and the Protocol amending the 1988 Convention which sets out the amendments
separately.

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96 – ANNEXES

Moldova, Monaco, Montserrat (extension by the United Kingdom), Nauru,


Netherlands, New Zealand, Nigeria, Niue, Norway, Pakistan, Panama, Peru,
Poland, Portugal, Romania, Russia, Saint Kitts and Nevis, Saint Lucia, Saint
Vincent and the Grenadines, Samoa, San Marino, Saudi Arabia, Senegal,
Seychelles, Singapore, Sint Maarten (extension by the Netherlands), Slovak
Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey,
Turks and Caicos Islands (extension by the United Kingdom), Uganda, Ukraine,
United Arab Emirates, United Kingdom, Uruguay and Vanuatu.
In addition, the Multilateral Convention was signed by, or its territo-
rial application extended to, the following jurisdictions, where it is not yet
in force: Antigua and Barbuda (instrument of ratification deposited on
16 October 2018 and entry into force on 1 February 2019), Armenia, Brunei
Darussalam, Burkina Faso, Dominican Republic, Ecuador, El Salvador,
North Macedonia, Gabon, Jamaica (instrument of ratification deposited on
29 November 2018 and entry into force on 1 March 2019), Kenya, Liberia,
Morocco, Paraguay, Philippines, Qatar (instrument of ratification deposited
on 17 September 2018 and entry into force on 1 January 2019) and United
States (the original 1988 Convention is in force since 1 April 1995 and the
amending Protocol was signed on 27 April 2010).

3. EU Directive on Mutual Administrative Assistance in Tax Matters

Spain can exchange information relevant for direct taxes upon request
with EU member states under the EU Council Directive 2011/16/EU of
15 February 2011 on administrative co-operation in the field of taxation (as
amended). The Directive entered into force on 1 January 2013. All EU mem-
bers were required to transpose it into their domestic legislation by 1 January
2013, i.e. Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland,
Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden and the
United Kingdom.

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ANNEXES – 97

Annex 3: Methodology for the review

The reviews are based on the 2016 Terms of Reference, conducted in


accordance with the 2016 Methodology for peer reviews and non-member
reviews, as approved by the Global Forum in October 2015 and the 2016-21
Schedule of Reviews.
This evaluation is based on the 2016 ToR, and has been prepared using
the 2016 Methodology. The evaluation is based on information available to
the assessment team including the exchange of information arrangements
signed, laws and regulations in force or effective as at 21 December 2018,
Spain’ EOIR practice in respect of EOI requests made and received during
the three year period from 1 January 2015 to 31 December 2017, Spain’
responses to the EOIR questionnaire, information supplied by partner juris-
dictions, as well as information provided by Spain’ authorities during the
on-site visit that took place from 3-6 July 2018.

List of laws, regulations and other materials received


The General Tax Law
The General Regulation on Tax Auditing
The Commercial Code
The Corporate Enterprises Act
AML/CTF Act
Royal Decree 304/2014 (AML/CTF Regulation)
Royal Decree 1065/2007 (Tax Inspection Regulation)
Royal Decree 1784/1996 (Commercial Register Regulation)

Authorities interviewed during on-site visit


Ministry of Economy and Finance (Ministerio de Economía y Hacienda)
• Dirección General de Tributos. SG Fiscalidad Internacional
• Secretaría General del Tesoro y Política Financiera

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98 – ANNEXES

Tax Agency (AEAT)


• ECI: Competent Authority on EOI
• Direction of Legal Service
• Departamento de Inspección Financiera y Tributaria
General Council of Public Notaries (Consejo General del Notariado)
• Notaries’ Centralised Prevention Unit
Spanish FIU (SEPBLAC)
Stock Exchange regulator (CNMV)
Institute of Accountants and Auditors (Instituto de Contabilidad y
Auditoría de Cuentas)
Central Bank of Spain (Banco de España)

Current and previous reviews

This report is the second review of Spain conducted by the Global Forum.
Spain previously underwent a combined Phase 1 and Phase 2 review of its
legal and regulatory framework and the implementation of that framework
in practice in 2011. The 2011 Report containing the conclusions of the first
review was first published in October 2011 (then published on November
2013 incorporating Phase 2 ratings).
The combined review were conducted according to the terms of refer-
ence approved by the Global Forum in February 2010 (2010 ToR) and the
Methodology used in the first round of reviews.

Summary of reviews

Legal Framework Date of adoption


Review Assessment team Period under review as of by Global Forum
Round 1 Ms Soledad Salman of Chile; Mr Malcolm n.a. June 2011 October 2011
Combined Campbell of Jersey; and Ms Gwenaëlle
Report Le Coustumer of the Global Forum
Secretariat.

Round 2 Mr Duncan Nicol of Cayman Island; 1 January 2015 to December 2018 15 March 2019
Mr Murilo da Silva Braga of Brazil; and 31 December 2017
Ms Kaelen Onusko and Mr Jose Mejia of
the Global Forum Secretariat.

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ANNEXES – 99

Annex 4: Jurisdiction’s response to the review report 22

This annex is left blank because Spain has chosen not to provide any
material to include in it.

22. This Annex presents the Jurisdiction’s response to the review report and shall not
be deemed to represent the Global Forum’s views.

PEER REVIEW REPORT – SECOND ROUND – SPAIN © OECD 2019


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ISBN 978-92-64-62286-9 – 2019
GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
OF INFORMATION FOR TAX PURPOSES OF INFORMATION FOR TAX PURPOSES
Peer Review Report on the Exchange of Information
on Request SPAIN 2019 (Second Round)

The Global Forum on Transparency and Exchange of Information for Tax Purposes is a
multilateral framework for tax transparency and information sharing, within which over Peer Review Report on the Exchange of Information
150 jurisdictions participate on an equal footing.
The Global Forum monitors and peer reviews the implementation of international standard
on Request

SPAIN
of exchange of information on request (EOIR) and automatic exchange of information. The
EOIR provides for international exchange on request of foreseeably relevant information for
the administration or enforcement of the domestic tax laws of a requesting party. All Global
Forum members have agreed to have their implementation of the EOIR standard be assessed
by peer review. In addition, non-members that are relevant to the Global Forum’s work are also 2019 (Second Round)
subject to review. The legal and regulatory framework of each jurisdiction is assessed as is the
implementation of the EOIR framework in practice. The final result is a rating for each of the
essential elements and an overall rating.

PEER REVIEW REPORT ON THE EXCHANGE OF INFORMATION ON REQUEST SPAIN 2019


The first round of reviews was conducted from 2010 to 2016. The Global Forum has agreed
that all members and relevant non-members should be subject to a second round of review
starting in 2016, to ensure continued compliance with and implementation of the EOIR
standard. Whereas the first round of reviews was generally conducted as separate reviews
for Phase 1 (review of the legal framework) and Phase 2 (review of EOIR in practice), the EOIR
reviews commencing in 2016 combine both Phase 1 and Phase 2 aspects into one review.
Final review reports are published and reviewed jurisdictions are expected to follow up on any
recommendations made. The ultimate goal is to help jurisdictions to effectively implement the
international standards of transparency and exchange of information for tax purposes.
This report contains the 2019 Peer Review Report on the Exchange of Information on Request of
Spain.

Consult this publication on line at https://doi.org/10.1787/997a7b23-en.


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