We have recently learned that Europe has
decided to postpone until 2020 the
entry into force of the Directive for the creation of the tax on certain taxes
services (ISD), seeking a greater consensus within the EU. For its part,
the Spanish Government has already closed the period for allegations to its Preliminary Draft of the
law for this tax, which was created for the purpose of alleviate
the effects of tax erosion caused by the offshoring of the
digital economy activity. A
tax to establish a levy of
3% on those digital services offered in EU countries
regardless of the location of the provider companies.

In this new
European scenario, Spain is left alone in the processing of this tax, which is
no longer meets either the consensus or the urgency that the Union envisioned in its
moment. From DigitalES and the companies that are part of the DigitalES
We have always agreed that companies should be taxed where they are taxed, and we have always agreed that companies should be taxed where they are taxed.
income is generated. However, the creation of a tax to insure
this principle in the digital economy cannot involve double taxation of
those companies that are already taxed on their income in our country.

The text of
this Preliminary Draft also presents articles that differ from the first one
the drafting of the European Directive, and which contain serious loopholes and
gray areas open to further interpretation.

First of all, the preliminary draft does not mention
any mechanism to correct the double
taxation that the ISD will entail for many companies located in
Spain. An attempt is made to dress up a direct tax as an “indirect tax”. It has been
discussed about allowing the deductibility of the ISD expense in the IS,
solution that would not eliminate the increase in operating cost of a
increase in taxation.

At the same time, the text published by the
Dirección General de Tributos (General Directorate of Taxes) details some activities taxed by ISD
The term “data transmission services“, for example, is used to refer to “data transmission services” and not to “data transmissionservices“.
of “the transmission of data collected about users” which is the “transmission of data collected about users” which is the
definition contained in the proposed Directive. The difference in nuance is
and it implies ignoring the fact that data transmission is a central activity of the
business, for example, telecommunications.

The standard currently under discussion should define
this issue in a way that does not expand the taxable event to data that has not
generated by the user’s activity. That is to say, data that a
The entity collects from the business relationship with the customer and not from its
digital behavior or its electronic activity.

It is not entirely clear, therefore, which
specific services are to be taxed, or which ones are to be contaminated
(sectors such as the automotive industry and its
connected car could also be affected, thereby penalizing the
businesses with a high innovation component).

The report
refers to an estimated collection where it is specified that
the “telephone” companies (?) would contribute about 100 million euros,
The results of considering that 10% of
its operations may be subject to this tax. It is difficult to
guess the logic for arriving at this figure which has nothing to do with the
percentage of the business of these companies, unless such activities are not
are sufficiently diffuse to be subject to interpretation by the
taxation and, therefore, are more of a revenue-raising element in companies than in the
are already taxed on all of their income, that a measure to correct this situation would be
the non-taxation of other entities.

In addition to this lack of definition of the
services affected, it is worth noting a third final provision
which establishes that the quantitative thresholds, the assumptions
the tax rate “may be modified by the Budget Law” or the tax rate “may be modified by the Budget Law”.
General State General”. It is unacceptable that a law of this magnitude can be
modified annually according to political interests or needs
of each moment. An arbitrariness that buries any
principle of legal certainty, effectiveness, proportionality and transparency,
in addition to leaving Spain’s image abroad in a very bad place.

We must ensure that the application of a
The tax of these characteristics serves its initial objective of correcting the
advantage of entities not established in the countries where they generate their revenues,
and not to punish companies whose combined revenues are already being
audited.

Alicia
Richart

Director
General Manager of DigitalES technology employers’ association