Spain - Planning and Administration of Offshore and Onshore Trusts 2022

Spain has not ratified the Hague Convention of 1 July 1985, on the Law Applicable to Trusts and on their Recognition. Accordingly, Spanish legislation does not recognise trusts and does not specifically address the taxation of trusts. In the few cases the word "trust" is mentioned under Spanish legislation, the term is used as a clarification of the Spanish word "fideicomiso" or fiduciary agreement, within the list of legal agreements to be closely followed for tax avoidance and anti-money laundering and that would be subject to special scrutiny when used.

As trusts cannot be created under Spanish legislation, Spanish legislation applies only where, under private international law, the law applicable to the assets contributed to a trust is Spanish legislation. Since the trust is not recognised under Spanish legislation, any potential taxation would follow from the classification of the transactions agreed by the parties under Spanish civil and tax legislation, as interpreted by the Spanish tax authorities. However, there is little administrative doctrine on the taxation of trusts and what exists is inconclusive.

See complete chapter at: Planning and Administration of Offshore and Onshore Trusts. Bloomsbury Professional, November 2022.