Legal insecurity: that great chimera

There is much talk, and rightly so, about the unbearable legal uncertainty in Spain. This is the most serious problem faced by consultants and companies and is especially unpresentable regarding tax matters. The concept of “tax or legal planning” in Spain is undoubtedly a risky sport.

One ​​wonders whether so much incompetence comes from ignorance, bad faith, or both. For example, two cans were used for the umpteenth time, according to Royal Decree 596/2016, of December 2.

Corporate Tax Reform

Beyond the reforms themselves, I am still impressed by the impunity with which the government applies measures that violate common sense.

The reader will think that if the government modifies the main tax that affects companies and does so in December 2016, it will refer to the IS of 2018 so that companies and advisors have time to plan future years, or, at most, to 2017, to do the same even if it is quickly and in a hurry.

But no, friends, this is Spain, and here the Treasury modifies a tax for the year 2016 (yes, for the whole year, from January to December), in the last month of the year.

That is to say the reform applies to companies for the activity of the practically closed fiscal year, blowing up the planning and forecasting of thousands of companies when the situation no longer has any possible solution.

At least this measure responds to a clear and concrete cause: the desire to collect taxes. Brussels is tightening, and there are few ways to get money in the short term. Because the second topic is even more complicated:

Immediate supply of SII information

To briefly summarize what it is about, the SII consists of supplying information to the Treasury in real time..

That is, we must communicate the details of all our invoices in less than four days, which means that the government tightens its control as it multiplies its capacity to receive, accumulate and process huge amounts of information from taxpayers.

this complicates companies’ collection work much more. Yes, exactly; this is the cost that companies assume (beyond the taxes we pay) so that the Treasury does not have to collect its taxes.

With good judgment, it is decided that this rule applies to companies with a turnover of more than 6M euros , which are the ones that, in theory, have more capacity to organize themselves.

But there is always a rabbit in the hat, and the Treasury also includes companies of any size registered in REDEME (monthly presentation and return of VAT).

These companies, even if they are small, make the effort (and assume the cost) of filing VAT every month so as not to have to wait between 6 and 18 months to recover VAT that they have already paid and that the State owes them.

Yes, friends, because in addition to being tax collectors, many companies act as a free bank for the State.

Not content with this, it turns out that the Royal Decree appears on December 2, exactly two days after closing the deadline to communicate registrations or cancellations in REDEME.

That is to say, if a company registered with REDEME wants to withdraw (to avoid the extra cost of the SII), it has to wait a year.

If a company registered with REDEME this November, they have modified their costs and procedures for the next year without prior notice.

This seems to be an endemic evil of our system, like others. The solutions are so obvious that I need to consider them when the laws are drafted.

We will continue to report.