Within the framework of the intended tax reform, also affecting direct taxes and excises duties, the Spanish Government has recently released the draft of the law that will amend certain aspects of the existing VAT Law. The text of this draft, that will be sent to the Spanish Parliament in July, can be downloaded at the site of the Spanish Ministry of the Treasury and Public Administrations (www.minhap.gob.es). The proposed changes are as follows: a) Implementation of the new place of supply rule for telecommunication, broadcasting and television and services rendered by electronic means of the Directive2006/112/EC to come into force on the 1st January 2015. To this end two new special optional regimes are created that are the mini one stop shop (MOSS) for companies providing these services to final consumers from third countries that have no permanent establishments nor obligation to register in any member state (“Regime external to the Union”) or companies residing in other member states different from the one where they provide the services (“Regime of the Union”). b) Adaptation of the Spanish Law to recent doctrine of the European Court: • Application of the general VAT rate (21%) instead of the reduced VAT rate (10%) to sanitary products (Judgment of 17 January 2013, C-360/11). • Modification of the special margin scheme regime for travel agencies as a result of the Judgment of 26 September 2013 (C-189/11). • Modification of the valuation rule for payments in kind (Judgment of 19 December 2012, C- 549/11). • Treatment of payments by a third party which cannot be considered as grants excluded from the taxable base (Judgment of 14 March 2014, (C-151/13). • Notary services related to financial transactions are excluded from the exemption applicable to the latter c) Modifications aiming to introduce technical improvements: • Regulation of global transfers excluded from VAT is modified so to clarify its regime following the doctrine of the European Court. • It is not required any more that a public body is fully owned an Administration so to be considered for VAT purposes as the “Administration” itself. Instead the circumstance that a public body is controlled (participation of at least 50%) by any Administration or another controlled public body would qualify the same as “Administration”. Transactions with participating Administrations or their dependent public bodies would as a consequence be excluded from the scope of VAT. Following the doctrine of the European court these public bodies would be entitled to a partial deduction of the input VAT according to a reasonable criteria. • Land transfers between compensating platforms (“Juntas de Compensación”) and owners of the land would not be exempt anymore. • Renounce of the exemption relating to immovable property transactions is extended to those cases where the purchaser cannot fully recover the input VAT (now renounce is only possible if the purchaser can fully recover the resulting input VAT). • The fact that at least 15% of the consideration corresponds to installation costs will not be a requisite anymore for the application of the special place of supply rule for supplies of goods with installation. • The formal requisites required for the modification of the taxable base for the case of unpaid debts are to be reviewed. • The scope of the special pro-rate is extended. • No reciprocity will be required for the VAT reimbursement to non-established eligible for the 13th Directive as regards accommodation and travel expenses connected with attendance at a congress. • For certain operators the payment of the VAT due on imports can be postponed to the moment when the same is to be declared on the periodical VAT return. d) Modifications meant to fight against fraud: • The reverse charge rule is extended to the supply of certain products (mobiles, computers, videogames and tablets, silver, platinum and palladium). • New penalties are introduced for the case that the taxable subject fails to declare the reverse charge applicable to the subcontracting of construction work and the purchase of immovable property as a result of the execution of a mortgage, or for the case that the import VAT is not declared by the operators allowed for the postponement of its payment. • Appendix Fifth of the VAT law that regulates the - VAT warehouse regime is modified and a joint and several liability on the holder of the warehouse is introduced. e) Modifications with clarification purposes: • Definition as goods of shares or titles of companies allowing the ownership or use and enjoyment of immovable property.