Legal Status - JANUARY 2021

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Tax: Changes in tax regulations deriving from Law 11/2020, of the General State Budget for 2021

Media: Proposals for the regulation of digital services and their potential impact on online platforms.

Litigation: Summary of changes in eviction procedure in 2020.


Changes in tax regulations deriving from Law 11/2020, of the General State Budget for 2021.


On 1 January 2021, the General State Budget Law for 2021 came into force, regulating important changes in tax regulations in relation to various taxes, in all cases involving an increase in the tax burden.

The main taxes affected are as follows:

1. Impuesto sobre la Renta de la Persona Física (Personal Income Tax)

In the general scale of the personal income tax (IRPF), a new final bracket is added to the general state taxable base for income over 300,000 euros, and this is taxed at a 24.50% rate. This represents an increase of 2% in the general state scale of the aforementioned tax.

The tax scale on savings in terms of the total tax liability; a new last section is added from 200,000 euros which is taxed at a 26% rate.

With regard to the scale for deductions and payments on account to recipients of employment income; a new last bracket is added from 300,000 euros and the tax rate applicable is increased to 47%.

With regard to income applicable to workers posted on Spanish territory, the tax rate for the final bracket corresponding to taxable bases from 60,000.01 euros is increased to 47%. This tax rate will not be applicable to income from savings (dividends, interest or other income obtained from the transfer to third parties of equity and capital gains). In this case, a new final bracket is also added to said income for taxable bases from 200,000 euros, which will be taxed at 26%.

Finally, new limitations are introduced on contributions to social welfare systems, applying the lower of; 30% of the sum of net income from work and economic activities received individually in the financial year, or the amount of 2,000 euros per year (previously 8,000 euros).

In addition, a new deduction ceiling of 1,000 euros (previously 2,500 euros) is introduced for contributions by taxpayers whose spouse has no net income from work or economic activity or if he or she obtains an amount of less than 8,000 euros.

2. Corporate Tax

For the purposes of understanding when a holding in the share capital of an entity is qualified, the alternative of investment in the share capital for an amount equal to or greater than 20,000,000 euros is eliminated, the minimum holding of 5% in the share capital being a requirement, regardless of its amount. This mainly affects:

  • Deductions and exemptions for double taxation on dividends and capital gains in Corporate Tax.
  • Exemptions from Non-Resident Income Tax for dividends distributed to EU companies (irrespective of the transitional regime).
  • Limitation to the deductibility of financial expenses.

Notwithstanding the above, a transitional provision has been approved which establishes that holdings acquired prior to 1 January 2021 with an acquisition value of over 20 million EUR? without reaching a 5% stake will not be subject to this change until 2025 inclusive, provided that they continue to comply with the established requirements.

The exemption on dividends and positive income deriving from the transfer of securities representing own funds is limited for both resident and non-resident entities. The amount of the exemption will be 95% instead of 100% as was the case until now since it is considered that the 5% differential corresponds to management expenses of the aforementioned holdings.

However, the exemption will be 100% for companies that are not part of a group of companies and that have a turnover of less than 40 million euros. This exemption can only continue for a period of 3 years if a subsidiary is established after 1 January 2021.

An amendment is introduced in relation to the deduction to avoid international economic double taxation on dividends and profit on shares. From 2021, the calculation of the double taxation deduction will also be reduced by 5% for the management costs of such shares.

3. Wealth Tax

The tax rate applicable to taxable income in excess of Euros 10,695,996.06 is amended from 2.5% to 3.5%;

This tax is now indefinite. However, this change will have a limited application since it will only affect taxpayers who reside in an Autonomous Community which has not defined its scale of taxation and, therefore, the state scale will be applicable to them. This change will also apply to non-resident taxpayers who own property in Spain.

4. Value Added Tax

The rule on the effective use of services in the territory of VAT application is eliminated in relation to those services provided to entities located in the Canary Islands, Ceuta and Melilla, and their treatment is brought into line with those provided to entities resident in the European Union.

The tax rate applicable to soft drinks and juices with added sugar or sweeteners is increased from 10% to 21%.

The limits for the application of the simplified arrangements and the special arrangements for agriculture, livestock and fisheries are extended for 2021.

5. Insurance Premium Tax

The tax rate is increased from 6% to 8%.

January 2021


Proposals for the regulation of digital services and their potential impact on online platforms.


On 15 December 2020, the European Commission published two proposals for regulations aimed at updating the regulation of the European digital single market: a Proposal for a Regulation of Digital Services and a Proposal for a Regulation of Digital Markets.

Due to the complexity and extent of the subject matter, this article will only deal with the Proposal for a Regulation on Digital Services (hereinafter “RSD”).

With the RSD, the European Commission is continuing with its mission declared last January to update the responsibilities and obligations of digital service providers and, in particular, of online platforms.

The RSD proposal maintains the obligations of the e-commerce Directive 2000/31/EC, and likewise aims to harmonise the obligations of information society services, while adapting to the new realities. The divergent national rules in this area have led to the adoption of a regulation, since the current regulatory framework has not been sufficiently effective or efficient in removing illegal products, services and content from the Internet. The RSD has three objectives. First, to ensure the best conditions for the provision of digital services in the single market. Second, to contribute to Internet security and the protection of fundamental rights and third, to establish effective supervision of intermediary services.

1. To whom does it apply?

The RSD applies to the provision of information society services classified as intermediaries, such as, the simple transmission of data, the temporary copying of data (“caching”) and the hosting of data. The providers of such services are exempted from responsibility for monitoring the data on the same terms as the E-Commerce Directive 2000/31/EC. Therefore, providers cannot be obliged to monitor the data they transmit or store, nor can they be obliged to assume a general obligation to actively search for facts or circumstances indicating illegal activities. The RSD also applies to online platforms such as social networks or digital markets, although in this case they do establish additional obligations.

2. Liability for unlawful content

The DSB obliges providers of intermediary services to introduce systems for notifying illegal content and managing its removal. They must inform the competent authority of the measures taken upon receipt of a decision by the competent authority requiring action on a particular illegal content, or upon a request for information on a particular recipient.

3. Increased transparency

In order to improve transparency on the Internet, the RSD introduces new due diligence obligations for all providers of intermediary information services. These include the obligation to establish a single point of contact with the competent authorities. They must also include in their terms and conditions the policies, procedures, measures, and tools used to moderate content, including algorithmic decision-making.

Hosting service providers should introduce mechanisms by which anyone can notify them of allegedly illegal content. A recipient whose content hosted on the service or platform is removed must receive a written justification from the service provider, including options to challenge the decision.

4. Additional obligations for online platforms

Online platforms are defined as “providers of hosting services that, at the request of the recipient of the service, store and disseminate information to the public”, excluding those services that host content ancillary to another service. For example, the comments section of a digital newspaper is an auxiliary hosting service, while the main service is the publication of the newspaper. These platforms will have a number of additional obligations and small and medium-sized enterprises are excluded. It is worth noting that, until now, the obligation to provide a free internal channel that allows recipients of the service to lodge complaints about decisions to withdraw content, suspend access to the service or suspend an account has only existed in relation to content that infringes copyright.

Certain bodies specialised in the detection, identification, and notification of illegal content may be appointed by the competent authorities as trusted entities. Their complaints and communications with the platform will have priority.

When an online platform concludes distance contracts with businesses, the platform must ensure that the latter are only able to offer products or services to consumers located within the European Union once they have received identifying information from those businesses. Finally, online platforms must ensure that each advertisement is identified as such and that the advertiser is recognisable.

5. Obligations for large platforms

Platforms with more than 45 million active recipients per month in the Union will be subject to more onerous obligations. In particular, they must identify, analyse, and assess any systemic risk of the use of their services in the Union at least on a yearly basis. This includes the dissemination of illegal content through their service, any negative effect on the exercise of fundamental rights to protect privacy, freedom of expression, information, the prohibition of discrimination and the rights of children, as well as the intentional manipulation of their service with negative consequences for public health, minors, electoral processes, and security.

Furthermore, large platforms should introduce systems to mitigate the risks they have identified. They must also be audited on a yearly basis to analyse their level of compliance with the obligations of the Regulation. With regard to advertising, they must make public information concerning, for example, the content and number of recipients of the service receiving the advertising. Large platforms must also designate one or more compliance officers responsible for monitoring their compliance with the RSD.

6. Supervision

Member States will designate a competent authority with powers to monitor and sanction compliance with the RSD. Non-compliance with the RSD or with the decisions of the competent supervisory authority may be sanctioned by a fine of up to 6% of the service provider’s annual profits.

January 2021


Summary of changes in eviction procedure in 2020.

Of Counsel

The eviction procedure has undergone several historical changes given its link to the illegal renting and occupation of property and the legislative changes related to these matters. These modifications have been even more notable during 2020, due to the social crisis resulting from the Covid-19 pandemic. This article will briefly analyse these changes.

This procedure is regulated in the Ley de Enjuiciamiento Civil (Civil Procedure Act) in a dispersed manner, with reference to it in a serious of articles that regulate the type of procedure to be carried out, the particularities of the procedure, and its execution.

The last important modification of these rules was through the RDL 7/2019 of 1 March 2019. Following this amendment, the eviction procedure has the following essential characteristics:

  • The hearing is oral.
  • When the court admits the claim, it sets a date for the trial and for the launch of the proceedings, regardless of whether the defendant files a defence.
  • The court must inform Social Services of the procedure and must advise the defendant that they can go to Social Services, and if Social Services informs the court that the defendant is in a vulnerable situation, the procedure must be suspended for 1 month if the plaintiff is an individual, or 3 months if the plaintiff is a legal entity.

It was therefore a relatively quick procedure.

Following the pandemic, the first modification was established through RDL 11/2020 of 31 March 2020, which extended the suspension of the procedure and the entering into effect until Social Services adopted measures in the case, with a maximum of 6 months from the date of the RDL. This extraordinary suspension refers to cases of economic vulnerability derived from the health crisis, which must be accredited according to the parameters regulated in the same regulation.

It is also worth noting that this RDL indirectly affected the eviction procedure in another way, by establishing an extraordinary obligatory extension of 6 months of housing rental contracts that ended during the State of Alarm or up to two months later, so that no eviction action could be filed due to the end of the contract in these cases, and by establishing a mandatory moratorium on rental debt in various cases, so that no eviction action could be filed due to non-payment of rent in these cases either.

The second amendment was made through the RDL 30/2020 of 29 September 2020, which extended the above-mentioned suspension of eviction proceedings beyond the six months previously indicated, until January 31, 2021. It should be noted that this regulation also extended the extraordinary extension of housing rental contracts, in the sense of making it applicable to contracts that ended between the first alarm state and January 31, 2021.

The third modification was through the RDL 37/2020 of December 22, 2020, which extended the aforementioned suspension of eviction proceedings until the end of the current state of alert, scheduled for May 9, 2021.

In conclusion, the changes brought about by these rules during 2020 have extended and prolonged the suspensions of the eviction proceedings on account of the defendant’s financial vulnerability, which makes it difficult for the applicant lessor to make the procedure effective.

While this makes sense in the context of the social crisis caused by the pandemic, it has a considerable effect on a procedure that in theory was supposed to be brief and simple, such as eviction, and could even force a lessor to consider his strategy when contracting a lease and dealing with a situation of non-payment or termination of contract.

January 2021