On 29 July 2021, the Joint Economic Agreement Commission (JECC) adopted certain agreements that affect the conclusion of the three pending taxes, namely the taxes on Financial Transactions, Digital Services and the new VAT one-stop-shop regimes (OSS) and, therefore, the Economic Agreement.

Furthermore, the reference deficit and debt rates for 2022 for the Basque Government and the Provincial Councils of Araba, Bizkaia and Gipuzkoa have been agreed upon, and the Economic Agreement Arbitration Board has been renewed, which is the body that settles any disputes that may arise between administrations, regarding the connection points of the Economic Agreement.

With regard to the former, the JCCC agrees to amend the Agreement to incorporate the agreement of:

• Financial Transaction Tax (FTT)

An indirect tax levied on acquisitions of shares in listed companies whose market value exceeds €1,000 million. The CMCE agreement establishes that the point of connection for the collection of the FTT will be the registered office of the companies whose shares are acquired.

• Tax on certain digital services -IDSD-.

The tax is levied at 3% on digital online advertising, online intermediation and data transmission services. The agreement establishes as the point of connection the place where the user participating in these services is located.

• VAT E-Commerce (VAT OSS)

Under the special VAT scheme, businesses must charge and pay to their own tax authorities the amount corresponding to their sales at the VAT rate of the country in which the consumer is located. Subsequently, exchanges of information and financial flows must take place between the Member States’ tax authorities so that the VAT is paid in the country where the consumption took place.

The agreement to amend the Economic Agreement, processed as a draft law, was approved in the Congress on 27 December with 280 votes in favour, 57 against and 4 abstentions. The approval in the Senate took place on 2 February, with the favourable votes of 253 senators out of the 261 votes cast (5 against and 3 abstentions). Finally, the Official State Gazette of 9 February published Law 1/2022, of 8 February, amending the Economic Agreement with the Autonomous Community of the Basque Country.

With the entry into force of the amendment to the agreed text, the Treasury Departments will begin to manage the new taxes. The revenue that has been collected by the AEAT since the new taxes came into force and which, in accordance with the agreed points of connection, would have corresponded to the Historical Territories, must be made available to the Treasury Departments.

In addition to the modification of the Economic Agreement, the ECCC of 29 July 2021 agreed on the reference rates of 0.9% deficit and 15.6% debt for the Common Institutions for 2022, while the deficit of the Provincial Councils will be 0.2%, in terms of percentage of GDP. The final (2020) and provisional (2021) valuations of liquid quotas, financial compensation and active employment policies were also agreed.

Finally, the ECCM agreed the appointment of Dr Violeta Ruiz Almendral, Professor of Financial and Tax Law at the University Carlos III of Madrid, as President of the Economic Agreement Arbitration Board, as well as the appointment of Mr Javier Muguruza Arrese and Ms. Sofía Arana Landin as members of the Board.