The fundamental factor in determining whether or not to apply Corporation Tax to an entity is the “tax residence”. An entity is considered to be a resident in USA for tax purposes if it meets any of the following requirements:
That it has been established in accordance with American law.
It has its registered office in USA.
That it has its effective management headquarters in USA.
Beginning in 2015, and after the current drafting of the first additional provision of Law 36/2006 (which has established new criteria to determine whether a territory should be classified as a tax haven or not), the General Directorate of Taxes published a Report on the validity of the current list of tax havens, according to which the possibility of automatic updating of the list is eliminated. In this way, the update of this list must be carried out expressly according to the criteria contained in the first additional provision indicated in Law 36/2006, effective as of January 1, 2015. In such cases the calculations can be made easier now with the state tax calculator
Those criteria are as follows:
The existence with that country or territory of an agreement to avoid international double taxation with an information exchange clause, an information exchange agreement in tax matters or the OECD and Council of Europe Agreement on Mutual Administrative Assistance in Tax Matters amended by Protocol 2010, as applicable.
That there is no effective exchange of tax information, in the terms provided below
For their part, those countries or territories with no taxation will be considered those in which an identical or analogous tax is not applied to Personal Income Tax, Corporation Tax or IRNR, which is understood to occur in those territories whose purpose is to taxation of income, regardless of whether its purpose is income, income or its elements of evidence 3 .
On the other hand, in those cases in which USA has signed an Agreement to avoid double taxation, it will be considered that there is a tax of an identical or analogous nature that is applicable to the aforementioned effects.
Finally, the countries to which it should be understood that there is an effective exchange of information are considered to be those to which it is applicable:
- An agreement to avoid double international taxation containing an information exchange clause (provided that no express limitations are established for its scope).
- An agreement for the exchange of information in tax matters (provided that its sufficiency for the above purposes is expressly established) or in the event of a conflict of residence, the provisions of the agreements will be applied to avoid double taxation signed by USA with other countries.
- Resident entities are taxed for this tax on their worldwide income. Taxable income includes all profits from business activities, income from investments not related to ordinary business activity and income derived from the transfer of assets.
To determine the taxation of taxable persons, however, it is also necessary to take into account the provisions of the agreements to avoid double taxation between USA and other countries that, where appropriate, may influence the determination of the tax base for the purposes of taxation in USA.