Multinationals and the latest international tax trends
Last week Garrigues staged a 1-day event to analyze the latest international tax trends from the standpoint of multinational companies. The participants included Néstor Carmona, Head of the Spanish Office for International Taxation (“ONFI”), Gerardo Pérez Rodilla, Deputy Chief Inspector of the ONFI, and Roberta Poza, Deputy Director General for International Taxation. The closing paper was delivered by Miguel Ferre, the Secretary of State for Finance.
The presentations delivered clearly showed that the newly created ONFI is set to play a key role, reflecting the authorities’ growing eagerness to combat aggressive tax planning and international tax avoidance. The ONFI’s main tasks will relate to:
- In the field of tax inspection, fostering programs with an impact on international taxation.
- Implementing coordination measures, to establish uniform inspection criteria.
- Performing technical support and assistance work wherever necessary in inspection activities.
- Coordinating and executing mutual agreement procedures and advance pricing arrangements with other States.
- Requesting information exchange procedures with other countries.
The ONFI’s work will focus, among other aspects, on transfer pricing, tax treaties and control of foreign payments. It will concentrate in particular on the correct application of tax treaties, verifying:
- that income/gains are correctly classified by taxpayers;
- that transactions have valid economic grounds;
- the identification of beneficial owners.
It also intends to monitor in particular inspection procedures relating to transfer pricing matters and advance pricing arrangements, especially in the field of international taxation.
As was indicated by the Secretary of State for Finance, the internationalization of companies represents a growing concern for the tax authorities. Some issues in this regard are already on the government’s agenda and are likely to lead to changes in the medium term. As we have already discussed on the blog, these measures are in line with the work published by the OECD on tax loss abuse (2011), hybrid mismatch arrangements (2012) and most recently (February 12, 2013) Base erosion and profit shifting (BEPS). A clear international trend towards greater corporate responsibility that will mark the future of present-day multinational groups.
Garrigues Tax Department