{"id":14829,"date":"2026-05-21T14:02:52","date_gmt":"2026-05-21T12:02:52","guid":{"rendered":"https:\/\/www.gentile.law\/?p=14829"},"modified":"2026-05-21T14:02:52","modified_gmt":"2026-05-21T12:02:52","slug":"international-tax-transparency-the-great-hidden-risk-of-international-structures","status":"publish","type":"post","link":"https:\/\/www.gentile.law\/en\/international-tax-transparency-the-great-hidden-risk-of-international-structures\/","title":{"rendered":"International tax transparency: the great hidden risk of international structures"},"content":{"rendered":"\n

Published:<\/strong> 21-05-2026<\/p>\n\n

The internationalization of investments and businesses has led to a constant increase in the use of foreign companies by Spanish tax residents. International holding companies, investment vehicles, asset structures or companies incorporated in jurisdictions such as the United Arab Emirates, Estonia, Luxembourg or the United States are nowadays a common part of many business and asset strategies. <\/p>\n\n

However, one of the greatest tax risks in this area continues to be the International Tax Transparency regime (hereinafter, “ITT”) regulated in Article 100 of the Corporate Income Tax Law (hereinafter, “LIS”) and Article 91 of the Personal Income Tax Law (hereinafter, “LIRPF”). This is a particularly relevant regulation because it allows the tax authorities to directly impute certain income obtained by foreign entities to the shareholder resident in Spain, even if such income has never been distributed. <\/p>\n\n

On the other hand, it is worth mentioning that the TFU is not an exclusive regulation of Spain, but that most of the member countries of the Organization for Economic Cooperation and Development (hereinafter, “OECD”) have similar rules, called CFC rules<\/em>, in their internal regulations, with the purpose of avoiding tax deferral. Some of the OECD member countries with CFC rules are: United States Luxembourg, Mexico, Ireland, Australia, Japan, Italy, France, Germany, etc. <\/p>\n\n

What is the purpose of the international tax transparency regime?<\/strong><\/h2>\n\n

The international tax transparency regime seeks to avoid the deferral of taxation in Spain when resident individuals channel income through non-resident entities or permanent establishments located in low tax territories.<\/p>\n\n

When certain requirements are met, the tax authorities can directly impute certain income generated by the foreign company to the Spanish taxpayer, even if the profits remain within the entity and have not been distributed. The imputation is included in the taxable income of the resident taxpayer in the period that includes the closing of the fiscal year of the nonresident entity, being calculated in accordance with the criteria of the LIS, with specific limits and rules, and with certain formal reporting obligations together with the personal income tax or corporate income tax return. <\/p>\n\n

The regime is intended to prevent taxpayers resident in Spain from accumulating passive income in companies located in low tax territories in order to avoid taxation in Spain.<\/p>\n\n

The requirements that activate the regime<\/strong><\/h2>\n\n

The application of international tax transparency normally requires the simultaneous concurrence of several elements:<\/p>\n\n