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April 8, 2021

Spanish Government publishes MDR Regulations

Executive summary

On 6 April 2021, the Spanish Government approved the Regulations setting forth Spanish Mandatory Disclosure Rules (MDR). The Regulations were published in the State Official Gazette on 7 April 2021 and enter into force on 8 April 2021, and are effective as from that same date.

The final Spanish MDR Regulations are generally aligned to the requirements of the European Union (EU) Directive on the mandatory disclosure and exchange of cross-border tax arrangements.

The key highlights of the Spanish MDR Regulations are summarized below.

Detailed discussion


On 31 December 2020, the Spanish legislation to implement the EU Directive on the mandatory disclosure and exchange of cross-border tax arrangements (referred to as DAC6 or the Directive) entered into force. Under DAC6, taxpayers and intermediaries are required to report cross-border reportable arrangements from 1 July 2020. However, reports will retrospectively cover arrangements where the first step was implemented between 25 June 2018 and 1 July 2020.1

The Spanish MDR Regulations contain certain detailed guidance on the hallmarks including reporting deadlines. The key differences between the Spanish MDR Regulations and the Directive are as summarized below.

Scope of taxes covered

The scope of the taxes covered under the Spanish MDR Regulations is fully aligned with the Directive and applies to all taxes except value-added tax, customs duties, excise duties and compulsory social security contributions.

Reportable arrangements

The Spanish MDR Regulations define a cross-border arrangement as any agreement, legal arrangement, scheme or operation. An arrangement can also include a series of arrangements, and an arrangement may comprise more than one step or part.

However, payments made under an already reported cross-border arrangement will not be treated as separate reportable arrangements unless they have their own substantivity that requires individualized treatment.

The Spanish MDR Regulations do not cover domestic arrangements and do not include any hallmarks in addition to hallmarks A-E of DAC6.

Hallmarks A-E of the Directive

Most elements of the hallmarks included in DAC6 are not expressly defined. The Spanish MDR Regulations provide certain clarifications as outlined below.

In relation to each hallmark, the following are the clarifications that the Spanish MDR Regulations provide to the concepts included in the Directive:

Hallmark A

For hallmark A.2, an arrangement might be reportable irrespective of whether the success fee is wholly or partly linked to the tax advantage.

For the purposes of hallmark A.3, a “marketable arrangement,” as defined in Article 3.24 of the Directive, is deemed to be a “standardized mechanism.”

Hallmark C

The Spanish MDR Regulations clarify that “cross-border payments” include cross-border charges, irrespective of whether the payment was made.

Payment shall also be deemed to be made between two associated enterprises when the payment is made indirectly through one or more interposed persons or entities.

The indirect recipient of payments shall be deemed to be the recipient of the cross-border payment if the payments have been imputed to that recipient based on the tax regimes of tax transparency, imputation of income or equivalent.

The Spanish MDR Regulations include some clarifications on when hallmark C.1 is met:

  • For hallmark C1(b):
    This notion is defined as the moment on which the arrangement is executed giving rise to legal or economic effects.
    • Any tax similar to the Spanish corporate tax shall be considered as corporate tax for these purposes, and a nominal tax rate below 1% is considered to be “zero or almost zero.”
    • The reference to “Non-cooperating third country jurisdictions” within the meaning of the Spanish tax haven list has now been removed. The reference made in the Directive to the EU and Organisation for Economic Co-operation and Development (OECD) lists of “non-cooperating third country jurisdictions” should be considered for the purposes of assessing reportability under this hallmark.
  • For hallmark C1(d):
    • Regimes that have been authorized by the EU should not be considered as preferential regimes for the purposes of this hallmark.

Regarding cross-border arrangements that include the transfers of assets (i.e., hallmark C4), the Spanish MDR Regulations clarify the following:

  • Material differences arising due to the difference in values for accounting and non-tax purposes shall not be included in this hallmark.
  • A material difference for these purposes means a difference of more than 25% between the tax values in both jurisdictions.

Hallmark D

The Spanish MDR Regulations list the cases in which this hallmark is deemed to be met, including arrangements which prevent compliance with domestic obligations to provide information on financial accounts or with obligations established by international agreements on the automatic exchange of information on “financial accounts” between EU Member States or with third countries.

The International Exchange Framework for Mandatory Disclosure Rules on Common Reporting Standard Avoidance Arrangements and Opaque Offshore Structures and the corresponding OECD guidelines are expressly mentioned as guidance for interpreting this hallmark.

The use of a mechanism that benefits from a lack of legislation or international agreement as listed above is also seen within the scope of this hallmark.

Hallmark E

None of the transfer pricing hallmarks will be deemed to have been met when the value of the cross-border arrangement has been determined through an Advance Pricing Agreement as regulated in the Spanish Corporate Income Tax Law or any other Agreement included in the Directive (previous versions of it) that is subject to automatic exchange.

For hallmark E.3, related to “intragroup cross-border transfer or functions, and/or risks and/or assets,” individuals of the same group shall be deemed to be those who are referred to as “person” in Article 3.11) of this Directive, who were treated as an associated enterprise within the meaning of Article 3.23) of the same Directive.

Main benefit test (MBT)

In accordance with DAC6, the MBT will be satisfied if it can be established that the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement, is the obtaining of a tax advantage.

The Spanish MDR Regulations clarify that “tax advantage” means a reduction in the taxable base or tax due, including a deferral of the tax due, as well as generating net operating losses, or tax credits. When the companies involved in the arrangement are associated enterprises within the meaning of Article 3.23) of the Directive, the tax advantages of all the associated enterprises will be taken into consideration, irrespective of the jurisdiction of taxation.

Reporting trigger and deadlines

Reporting trigger

According to the Spanish MDR Regulations, the obligation to report arises when any of the following circumstances take place (which is aligned with the Directive that expressly states that “whichever occurs first”):

  • On the day after the reportable cross-border arrangement is made available for implementation.

This notion is defined as the moment on which the intermediary provides, and the relevant taxpayer receives in a definitive manner the relevant service. Evidence of this can be, by way of example, an acceptance letter, a memorandum or invoices.

  • On the day after the reportable cross-border arrangement is ready for implementation.

This notion is defined as the moment on which the arrangement may be executed by the relevant taxpayer.

  • When the first step in the implementation of the reportable cross-border arrangement has been made.

This notion is defined as the moment on which the arrangement is executed giving rise to legal or economic effects.

There are special rules for “secondary” intermediaries as well as for the obligation triggered when the intermediary is exempt from reporting due to legal professional privilege (LPP).


Standard reporting

As a general rule, the reporting obligations should be complied with within 30-calendar days following one of the “triggering events” as described above.

A Ministerial Order will be issued by the Ministry of Tax approving the tax forms to comply with these reporting obligations.

For agreements where the first step was implemented in the transitory period (between 25 June 2018 and 1 July 2020), the reporting deadline will be 30-calendar days from the date in which the Ministerial Order indicated above enters into force. The same deadline applies for the agreements whose reporting obligation arose between 1 July 2020 and the date of entering into force of such Ministerial Order.

Marketable arrangements

The Spanish MDR Regulations also include the obligation to provide quarterly updates on the information for marketable arrangements which have been previously reported.

In the case of updated information related to the period between 1 July 2020 and 31 March 2021, the deadline is 30-calendar days from the date in which the Ministerial Order approving the tax form for complying with this reporting obligation enters into force.

Utilization of cross-border reportable arrangements

Finally, the Spanish MDR Regulations include the obligation for each relevant taxpayer to file annual reports detailing their use of the arrangements that have already been reported to any tax authority, listing a series of nexus rules.

Such communication must be filed in the last quarter of the calendar year following that in which the utilization of the cross-border reportable arrangement that had already been reported (or should have been reported).

Notification to other intermediaries and/or relevant taxpayer

Intermediaries bound by LPP must inform the other intermediaries involved in the cross-border reportable arrangement and the relevant taxpayer of their LPP status within five days from the day on which the arrangement becomes reportable. A template with the relevant content of this notification will be approved by the Spanish Tax Administration.

Also, when intermediaries or relevant taxpayers file an MDR report, they must inform other intermediaries/ relevant taxpayers involved in the cross-border reportable arrangement within five days from the date of the filing. A template with the relevant content of this notification will be approved by the Spanish Tax Administration.

Utilization of the information by the tax authorities

The Spanish MDR Regulations set forth that the Spanish Tax Administration may publish, for information purposes only, the most relevant reportable cross-border arrangements on its website but do not clarify in which cases, when and how regularly this information will be published.

Next steps

The Ministry of Taxes will publish the Ministerial Order approving the tax form for complying with this reporting obligation. Once this Order enters into force, the specific deadline for the reporting obligations will be established.

Determining if there is a reportable cross-border arrangement raises complex technical and procedural issues for taxpayers and intermediaries. Taxpayers and intermediaries who have transactions or invest in Spain should review their policies and strategies for logging and reporting tax arrangements - and should be knowledgeable of what other intermediaries may be reporting - so that they are fully prepared for meeting these obligations and are aware of the information conveyed to the European tax authorities.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Abogados

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



  1. See EY Global Tax Alert, EU publishes Directive on new mandatory transparency rules for intermediaries and taxpayers, dated 5 June 2018.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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