Spanish FTT – Indemnity Protocol

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Spanish FTT - Equities Indemnity Protocol

This Protocol is published by the Association for Financial Markets in Europe (AFME).  Its purpose is to allow parties to adhere to a set of standard provisions in circumstances where transactions are subject to the Spanish financial transactions tax under Spanish Law 5/2020, dated 15 October 2020 (Ley 5/2020, de 15 de octubre, del Impuesto sobre las Transacciones Financieras) (the FTT Law), as this Law may be amended or superseded from time to time, including any related penalty or interest for late or incorrect payment or late or incorrect filing that may be due (the FTT).

A party intending to adhere to the Protocol should follow the process set out in paragraph 2.1. and 2.2 of the Protocol.  Adherence to the Protocol shall require the execution and delivery to AFME of a letter in the form, or substantially the form, set out in Exhibit 1 to this Protocol (the Adherence Letter).

A party intending to adhere to this Protocol shall either:

(a)deliver to AFME by (i) certified or registered mail (or airmail, if overseas) or equivalent; (ii) courier; or (iii) personal delivery to the address set out in the form of Adherence Letter, two copies of the Adherence Letter: one a manually signed original and the other a conformed copy containing, in place of each signature, the printed or typewritten name of each signatory; the party shall also send scanned pdf copies of the manually signed original and conformed copies of the Adherence Letter to AFME at [email protected]; or

(b)send to AFME at [email protected] an electronically signed original and a conformed copy of the Adherence Letter.

A single Adherence Letter can be provided for all relevant entities in the Corporate Group.

After AFME receives the signed and conformed copies of the Adherence Letter (in electronically signed original, pdf of the manually signed original, or hard copy original), AFME shall publish the conformed copy of the Adherence Letter on the AFME Website (such publication by AFME constituting the Adherence Confirmation) and will aim to do so within 5 Business Days of receipt thereof.

AFME will issue an invoice for the Initial Adherence Fee of £1,500 (plus VAT where applicable).  The Initial Adherence Fee will be payable immediately. In accordance with paragraph 5.7 of the Protocol, if the Initial Adherence Fee is not paid by the later of (i) 16 February 2021; and (ii) the date falling 30 days following the date on which AFME effects the Adherence Confirmation for the relevant Adhering Party or Corporate Group, all Group Adhering Parties will be subject to the automatic withdrawal of their adherence to the Protocol.

The Protocol, accompanying exhibits and completed forms that have been submitted to AFME can be found below:

 

Please note that on Wednesday 13 January we have published an amended version of the Protocol

The amendments to the Protocol derive from the publication of FAQs by the Spanish tax authorities. Specifically, the FAQS have confirmed that the definition of financial intermediary should cover an entity that (i) deals on its own account and is licensed for dealing on own account; and/or (ii) executes orders on behalf of clients and is duly licensed for the execution of orders on behalf of clients.  The FAQs do not include the exception of intermediation desk, as the French FTT and as envisaged in the current version of the Spanish Protocol, which followed the French Protocol.  This means that a financial intermediary that, in respect of a particular transaction, just acts as an intermediation desk can be the taxpayer of the FTT.

The amendment to the Protocol affects the representations to be provided by Adhering Parties pursuant to clause 6.  Specifically, the amendment consists of removing representation (b) where the Adhering Parties represent that they are not acting as an Intermediation Desk. This representation is no longer necessary as, following the interpretation made by the Spanish tax authorities in the FAQs, the fact that an investment services provider is acting as an intermediation desk is irrelevant in order to identify who is the taxpayer in a chain of intermediaries.

 

If you have already sent in your Adherence Letter there is no requirement to submit another letter as the protocol will continue as amended. The amended protocol will take effect at 12.01am CET on Wednesday 13 January 2021.

Spanish FTT Protocol (amended version published 13 January 2021)

Exhibit 1 – Adherence Letter 

Exhibit 2 – Adherence Fees Schedule 

Exhibit 3 – Disapplication Letter

Exhibit 4 – Withdrawal Letter

Exhibit 5 – Notice of ceasing to be Investment Services Provider 

The Protocol is intended to create legal rights and obligations and parties should take legal advice on its terms and effect before adhering to the Protocol.

For refererence, Spanish FTT Protocol (original version published 15 December 2020)

For website technical queries please email [email protected]

 

Download an up to date list of legal entities from which AFME have published an adherence letter

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