Spanish Report for 2020 EATLP Congress: Taxation and Value Creation

Abstract

This book chapter is based on the Spanish report written for the 2020 EATLP Annual Congress on "Taxation and value creation". Section 1 aims at understanding the role of ‘value’ in the Spanish national income tax (including both personal and corporate income tax and, where relevant, also taxes closely linked to these, such as a special trade tax, but limited to issues of business income). The purpose is not to learn about the doctrinal details of tax accounting, which would go far beyond the scope of this questionnaire, but to understand in general how one could claim that the income tax system in your country is based upon an idea of how and where value is created. This necessitates a general inquiry into the use of terms relating directly to ‘value’ and its linkage to the definition of income. It thus also requires understanding which changes in the value of assets are reflected in income tax laws and how such changes are reflected. Considering this potentially vast subject matter, reporters should keep in mind the overall framework of this study, which aims to explore the general principles one may derive from the law as it stands in order to answer the question 1) whether tax laws generally reflect a ‘value creation principle’ and 2) whether ‘value creation’ may therefore be a useful element to decide on the allocation of taxing rights. Section 2 aims at establishing whether the Spanish national legislation has changed in response to concerns about the digitalisation of the economy and, if the response is positive, whether such change has been related to the idea that taxation ought to follow value creation.

Keywords: taxation, value creation, digital services tax