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21 December 2017 Spain and US sign Country-by-Country Reporting automatic exchange of information agreement On 20 December 2017, the United States (US) Internal Revenue Service (IRS) announced on its website1 that the bilateral agreement between the Competent Authority of the United States of America and the Kingdom of Spain on the exchange of Country-by-Country reports (i.e., Competent Authority Arrangement or CAA) was signed and has become operative as of 19 December 2017. This has been a long-awaited agreement for US Multinational Enterprise (MNE) groups with a Spanish subsidiary or permanent establishment (PE) because, according to Spanish law, entities residing in Spain that are direct or indirect subsidiaries from a nonresident company (belonging to an MNE group with consolidated net turnover in the preceding fiscal year of at least €750 million) must submit the Country-by-Country (CbC) report locally in Spain with respect to the 2016 reporting year if there is no CAA in place with the nonresident company's country of residence by year end. By signing this CAA, there is no obligation for a US parent company's Spanish subsidiary or PE to file a CbC report in Spain, so long as such US parent entity has filed a CbC report in the US. However, if the US parent entity does not file a CbC report in the US for any reason then the Spanish subsidiary or PE in principle would still have to comply with the Spanish CbC reporting obligations. 1 IRS website: https://www.irs.gov/businesses/country-by-country-reporting-jurisdiction-status-table. Document ID: 2017-5069 |
