The meeting of the Joint Committee on the Economic Agreement held on July 19 agreed to the most significant amendment of the text agreed in recent years. Under this agreement, several collaborations have been initiated to analyse its content. Several of them are contained in issue number 235 of Forum Fiscal.

Javier Armentia Basterra describes the agreements reached at the Joint Committee on the Economic Agreement of July 19 to amend the text agreed in a detailed, schematic manner in his article “Comentario a las modificaciones introducidas en el Concierto Económico por el acuerdo de la Comisión Mixta de 19 de julio de 2017” (Commentary on the amendments made to the Economic Agreement by agreement of the Joint Committee on July 19, 2017).

Iñaki Alonso Arce, a regular contributor to the magazine, focuses on what seem to him to be the most relevant aspects of the agreement and, specifically, on those where the focus is put on the position of taxpayers who have to simultaneously interact with several administrations, in his paper “Regularización de operaciones entre contribuyentes forales y de territorio común en la modificación del Concierto Económico de 2017: luces y sombras” (Regularisation of operations between contributors to the provincial and common Spanish tax systems in the 2017 amendments to the Economic Agreement: pros and cons).

Taking advantage of the amendment to the Economic Agreement, Forum Fiscal has incorporated a new section as of issue number 236, in which Javier Armentia Basterra, under the ambitious title “Todo sobre el Concierto Económico” (All about the Economic Agreement), will attempt to explain clearly and simply the content of this provision, which is key to the welfare of all residents in the Basque Country. Thus, important aspects such as its nature, characteristics, legislative capacity and enforcement of provincial taxes, management and procedural rules, tax domicile, reporting obligations, determination of the quota and the bodies provided for in the Economic Agreement, i.e. Joint Committee, Coordination and Regulatory Evaluation Committee and Arbitration Board, will be addressed.

Go to jurisprudence of authors

The latest issues of the Forum Fiscal journal contain several articles that touch on different fiscal aspects relating to the content of the Basque Economic Agreement.

Thus, in issue 233, Idoia Zapirain Torrecilla, in her article “Authority to levy VAT in the case of operations to issue fuel payment cards“, discusses and analyses in detail the Ruling of the Basque Economic Agreement Arbitration Board 7/2017, of 12 May, which focuses on establishing the location of the transactions related to the system followed by the taxpayer to purchase fuel and petrol at service stations, used mainly by commercial road users, by means of electronic commercial cards.

Francisco Martín Sesma, in turn, analyses (“The permanent establishment as a point of connection and territorial criterion regarding VAT“) the functionality that the Permanent Establishment, as a location criterion, may present in relation to the connection points envisaged in the Economic Agreement of the Basque Country and that of Navarra regarding VAT.

Gemma Martínez Bárbara, in the latest number (53) of Zergak (“Roadmap to BEPS and the tax systems of the Provinces of the Basque Country“) and in issue 234, of Forum Fiscal, (“The new international agreements regarding Patent Box and the tax systems of the Provinces of the Basque Country“) delves further into the impact that the agreements adopted within the OECD’s Forum on Harmful Tax Practices (FHTP) and in the European Union’s Code of Conduct will have on the provincial Corporation Tax legislation, regarding the need to curtail BEPS practices and, secondly, and more specifically, the adaptation of the provincial legislation aimed at clarifying the tax incentives recognised for companies that receive income from marketing or exploiting intellectual or industrial property rights (patent-box).

Finally, Enrique José Rodríguez Cativiela, in the Revista del Colegio Notarial de Madrid (No. 73), provides his personal view of the Economic Agreement system and the possibilities of it being mainstreamed in the Spanish State and, in particular, in the Autonomous Community of Catalonia (“The Economic Agreement of the 21st Century: new quota and extension to Catalonia?“).

Go to the academic literature

The meeting of the Basque Economic Agreement Joint Committee, held at the Spanish Ministry of the Treasury and Civil Service on the 19th, proceeded to ratify the Five-year Quota 2017-2021 Act and the amendments to the Basque Economic Agreement Act. This will mean financial stability for the Basque Country until 2021 and ends the process that began in May to adjust and settle the Quota discrepancies since 2007. The document that was signed contains 11 agreements.

Press release

In a ruling issued on 30 May last, the Supreme Court resolved to ask the Constitutional Court for a preliminary ruling, as provided for in Additional Provision Five to the Public General Act [Ley Orgánica] governing the latter court, introduced via Public General Act 1/2010, known as the “ring-fencing” of provincial regulations.
The reason given by the Supreme Court for raising the issue of unconstitutionality is its doubt as to the validity of the provision set out in the last paragraph of subsection 1 of Article 102 of the NFGT of Bizkaia, which by excluding procedures begun by means of declarations or self-assessments from the six-month expiry period may be in breach of the harmonising regulation contained in point a) of Article 3 of the Basque Economic Agreement, which requires the Historical Territories to adapt to the terminology and concepts of the General Tax Act [Ley General Tributaria] in the drawing up of tax regulations.
In this case, in the scope of a procedure begun by means of a self-assessment, the tax authorities issued an injunction against a taxpayer and drew up a settlement after six months had elapsed from the date of the injunction, which means that if the expiry period envisaged in the General Tax Act for the data checking procedure is applicable then the period of limitation for the exercising of administrative power to determine the tax debt was exceeded and the settlement drawn up is null and void.
However the lower court ruling dated 23 September 2015 found nothing unlawful in the regulation of procedures contained in the NFGT and essentially confirmed the position of the tax authorities.
The ruling brought in by the Constitutional Court will be a matchless opportunity to dispel doubts as to the determination of the limits affecting the regulatory capabilities of the Historical Territories under the current wording of the Economic Agreement and the possibilities of diverging from the general state regulations on this matter.

Text of the Judgement

Issue 107-II of the Revista Vasca de Administración Pública (Basque Journal of Public Administration) (RVAP) dedicates its content exclusively to going deeper into the recently approved Law 2/2016 of April 7, on Local Institutions of the Basque Country (LILE), including 17 studies on the various aspects defined by a law that has completed the legal and institutional architecture of the Basque Country.

Among them, due to his relationship with the Economic Agreement, we would like to highlight those carried out by the lecturer on Constitutional Law at the University of Deusto, Santiago LARRAZABAL BASAÑEZ, under the title “Zume hauekin… ekin lanari. Reflexiones sobre la génesis, naturaleza e inserción de la Ley de Instituciones Locales de Euskadi en el peculiar sistema de fuentes del Derecho vasco” (Zume hauekin…ekin lanari. Reflections on the genesis, nature and insertion of the Local Institutions Act of the Basque Country in the particular system of sources of Basque law) and the development of the financial aspects presented jointly by the lecturer on Administrative Law, Iñaki GALDEANO LARIZGOITIA and the Director General of Management Strategy of the Provincial Council of Gipuzkoa, Sebastian ZURUTUZA MUJIKA, entitled “Financiación de las entidades locales de Euskadi en el marco de la Ley 2/2016, de Instituciones Locales de Euskadi“. (Financing local entities in the Basque Country in the framework of Law 2/2016, on Local Institutions of the Basque Country).
For its part, the latest issue of the journal Nueva Fiscalidad contains a work prepared by the lecturer on Financial and Tax Law at

the University of Navarra, Antonio Vázquez del Rey Villabuena, entitled “¿Es la generación de valor el criterio para la atribución de la competencia de Navarra en materia de IVA?” (Is the generation of value the criterion for attributing the competence of Navarre on matters relating to VAT?), in which he carries out an analysis of the (in)application of the ROVER Doctrine by the Supreme Court in its judgement of January 31, 2017, in which the High Court ruled in favour of the competence of Navarre in levying tax on fuel deliveries stored in third party tanks located in Navarre.

Go to the academic literature