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March 10, 2021

Spanish Council of Ministers approves implementation of ATAD 2

On 9 March 2021, the Spanish Council of Ministers approved the Royal-Decree Law (RDL) implementing the European Union (EU) Anti-Tax Avoidance Directive (Council Directive 2017/952 of 29 May 2017, “EU ATAD 2”) into the Spanish legislation.

The final wording, published in the Spanish Official Gazette on 10 March 2021, is in line with the draft released on 30 November 2020 (See EY Global Tax Alert, Spain releases draft Bill implementing ATAD 2 for public consultation, dated 2 December 2020).

This Alert highlights the main issues related to this implementation, a detailed Alert summarizing the final wording of the EU ATAD 2 implementation and the differences with the previously released draft and the EU Directive will follow.

Overview of the RDL

The wording originally released on 30 November 2020 was intended for a draft Bill; however, the Spanish Council of Ministers has finally approved the EU ATAD 2 implementation as an RDL, which does not require Parliamentary approval to become applicable. This RDL must then be validated by the Spanish Congress within a 30-day period following its publication.

As set forth in the preamble of the RDL, the utilization of this extraordinary approval procedure is in response to the infringement procedure initiated by the European Commission against Spain due to the lack of timely implementation of this Directive and the potential penalties to be imposed as a result.

Entry into force

As per the entry into force clause, the RDL enters into force on 11 March 2021, the day following its publication in the Spanish Official Gazette.

Under the entry into force clause, these rules will be applicable to fiscal years beginning on or after 1 January 2020 but which have not concluded on the date of entry into force. Thus, for companies following the calendar year, these rules will only be applicable from 1 January 2021.

Ernst & Young LLP (United States), Spanish Tax Desk, New York


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