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The series "All about The Economic Agreement" continues
Tuesday, 22 de January de 2019

Forum Fiscal continues its series on the Economic Agreement by Javier Armentia Basterra. Instalments XI and XII are included with Issues 246 and 247 of the journal. Iñaki Alonso Arce discusses the creation of new taxes by the Spanish parliament and the implications for the Basque provinces.

Issue 193 of the Revista Española de Derecho Administrativo (Spanish Journal of Administrative Law) includes a piece by José Damian Iranzo Cerezo, magistrate from the contentious-administrative division of the Basque High Court, on the consequences of the latest Constitutional Court judgements for the so-called “armour plating” of provincial legislation.

In the December issue of the journal Exparlamentarios, Juan José Laborda Martín, former speaker of the Senate, and Ignacio Zubiri Oria, Professor of Public Finance at the University of the Basque Country, discuss the significance of the Economic Agreement as a historical entitlement of the territories of Navarra and the Basque Country and analyse the quota system and its consequences.

Finally, Rafael Fernández Valverde, magistrate of Court Three of the Supreme Court, discusses the court’s judgement of 5 September 2018, ruling that the provincial governments cannot be held liable for the recovery and return by affected companies, of aid awarded in the form of tax benefits, and subsequently ruled to be unlawful state aid by the European Commission. This judgement confirms the decision of the Basque High Court, in its judgement of 22 November 2016.

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New vacancy on the Economic Agreement's Arbitration Board
Tuesday, 22 de January de 2019

Isaac Merino Jara, Professor of Tax Law has presented his resignation as a member of the Arbitration Board of the Economic Agreement, on which he has sat for the last decade. The move follows his appointment to the position of Supreme Court magistrate (Court Three), on the recommendation of the General Council for the Judiciary—a post filled by distinguished lawyers and jurists. Prof. Merino’s resignation once again leaves the Arbitration Board inoperative, at a time when it has a considerable number of cases awaiting resolution.

In recent judgements, the board has resolved a number of issues that have proved controversial in recent years, such as the reporting point for withholdings on earnings for work performed on board ships (Judgement 6/2018), treatment of advance payments for the purposes of determining the trading volume in Company Tax (Judgement 9/2018) and the determination of regulations applying to business restructuring operations involving organisations subject to the legislation of different administrations (Judgement 16/2018). It has also confirmed other rulings, such as the location for VAT purposes of fuel deliveries supplied via credit cards (Judgement 7/2018).

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Seminar on the Economic Agreement at the University of the Basque Country
Saturday, 1 de December de 2018

On 21 and 29 November two seminars took place at the Centro Carlos de Santamaría venue in Donostia-San Sebastián under the leadership of professors Isaac Merino Jara and Juan Ignacio Ugartemendia Eceizabarrena which looked in depth at the points of connection envisaged in the Economic Agreement for the allocation of regulatory authority for the levying of taxes and tax inspections between the central government and the Basque provincial authorities. The speakers on the first morning were representatives of the various tax authorities in the Basque Country, while those at the rest of the seminars were academics from the University of the Basque Country and several other Spanish universities.

Programme of the seminars

Administrative doctrine
Tuesday, 13 de November de 2018

The Tax Coordination Body of the Basque Country has issued two consultations in which, on the one hand, it analysed the application of the tax benefits provided for in the common regional regulations on patronage in favour of a provincial cultural foundation, also qualified as a priority activity, and, on the other, it clarified the application of the First Transitional Provision of the Economic Agreement, after raising the threshold for taxation on volume of transactions to 10 million euros and its application to tax periods or settlement periods which have begun since the entry into force of Law 10/2017, notwithstanding the omission from that provision of any reference to Article 27 relating to the levying of VAT.

The Arbitration Board of the Economic Agreement has resolved four arbitration disputes through its Resolutions 1 to 4 of 2018. In the first of these (Resolution no. 1/2018), it confirmed its previous doctrine in relation to determining the dies a quo for calculating the statutory filing period in cases of discrepancies prior to the effective constitution of the Board, referring to the date of this constitution to do so. The second (Resolution no. 2/2018) denies the application of the Rover Doctrine to a case in which there is a transfer of goods not transformed by the transferor, referring to the place where the transport begins to determine the location of transactions. Resolution 3/2018 admits evidence to the contrary against the presumption provided for in the VAT legislation that a permanent establishment with a tax ID number assigned to it by the tax administration is a taxable person. Finally, Resolution no. 4/2018 understands the first delivery of property to be the delivery subsequent to entering into a contract for the “sale of a building under construction and assignment of development”, while denying, at the same time, the appropriateness of the Board to analyse and pronounce itself in favour of the application of a criterion that equitably distributes the tax charged between conflicting administrations.

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Scientific doctrine
Tuesday, 6 de November de 2018

Forum Fiscal continues its series devoted to providing full explanations of the Basque Economic Agreement. This series is written by Javier Armentia Basterra, Head of the Regulatory Development Unit at the Provincial Council of Araba/Álava. Issues 242-245 of the journal contain chapters VII, VIII, IX and X, respectively. The first three of these chapters complete the analysis of the regulatory capabilities and the ability to apply various taxes, and the fourth covers management and procedural regulations.

On the subject of the agreements entered into by the Basque and Spanish authorities in 2017, issue nº 244 of Forum Fiscal features an article by Gemma Martínez Bárbara (Head of the Fiscal Policy Unit of the Provincial Council of Bizkaia) analysing the solution provided by the modification agreed on the point of connection for inheritance tax to the problems of breaches of the rule on freedom of movement of capital. Issue nº1 55 of the Basque taxation journal ZERGAK includes articles by José Rubí Cassinello (Technical Secretary General of the Revenue Department of Bizkaia) analysing the changes made to the Agreement by Act 10/2017 of 28 December, and on the contents of the May 2017 agreements on the settlement of quotas from 2011 to 2017 and the contents of the new Quota Act for the five-year period from 2017 to 2021.
Issue nº 244 of Forum Fiscal contains tywo articles on the resolutions of the Board of Arbitration for the Economic Agreement. The first is by Iñaki Alonso Arce (Deputy Head of Coordination and Technical Assistance at the Provincial Revenue Department of Bizkaia), dealing with the levying of certain withholdings on earned income by a body answerable to the institutional administration of the central government. The second is by Idoia Zapirain Torrecilla (a Technical Officer at the Revenue Department of the Provincial Council of Gipuzkoa); it analyses the powers of the Board of Arbitration in cases where to settle a dispute a prior legal ruling on the operation in question is needed (in this case whether the operation is subject to VAT).
Finally, two further articles are worthy of mention: the first, by Iñigo España Ariza, also appears in issue nº 245 of Forum Fiscal, and takes an in-depth look at the implementation in the regulations for Bizkaia of the anti-BEPS measures drawn up by the OECD. The seconds is by Benjamí Anglés Juanpere, and analyses the nature and development over time of transfers to municipal bodies in the Basque provinces.

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