The Spanish Ministry of Finance has made public the draft law for the introduction of a tax on certain digital services (hereinafter “digital tax”). According to its motivation, this new tax takes into consideration the initiatives for a fair taxation of the digital economy that are taking place at a multinational level originated by the difficulty of properly taxing the benefits of big on-line companies. Such a difficulty arises from the existence of new business models which are difficult to accommodate to the provisions of the internal Corporate tax provisions of the countries and to a network of tax treaties which are based in the existing OECD model.
Special mention is made to the proposal for a Council directive on the common system of a digital services tax on the provision of certain digital services issued the 21st March 2018 (hereinafter, “the Proposal”), where an interim digital tax of similar design is contemplated. Given the difficulties and time involved in the achieving of a global solution within Europe, the Spanish Government has taken the lead of similar unilateral initiatives which have been announced by other member states and decided to start taking the necessary steps to implement the digital tax. In any case, given the unstable political situation of Spain, the final outcome of this initiative is uncertain at this stage.
In line with the Proposal, the intended digital tax will charge with a 3% rate the portion of turnover generated by on-line platforms providing certain qualifying digital services (Note) which can be allocated to Spain on the basis of the location of the devices of the users (based in the IP address or via geolocation) at the moment when the publicity is inserted, the underlying transaction takes place or the data are generated.
Taxable subjects of the tax will be those companies, regardless where they are established (Spain, UE or third countries), that exceeds both the two following thresholds:
• A turnover during the previous year of 750 million Euros.