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The guidelines related to establishments in a foreign country by means of a branch or permanent establishment, (we refer to features that are not operating with own legal nature), have already been exposed with previous postings. The incorporation of a subsidiary company abroad (or in Spain being a foreign company) takes us one step further. What is a subsidiary company The RSA Glossary defines that a subsidiary company is a feature that is controlled by another company. Unlike a permanent establishment, the decision to incorporate a company abroad implies that the entity is autonomous, with legal personality and therefore responsible for its own debts. It will have its own articles of association, its own management and administrative board. Moreover, it may -or it may not- distribute dividends to the parent company. The parent company will have control of the subsidiary by holding shares, but both will be legally and fiscally independent. Therefore, the foreign subsidiary (or Spanish subsidiary in the case of a foreign parent company that wants to set up here) will be considered as resident in the established territory, unlike its parent company (obviously, a subsidiary can be established within the same country, but that is another case). Why is this interesting? There are multiple strategic reasons; to separate responsibilities, to divide production, to segment markets, to diversify risks... and also for tax optimisation. Holding Corporation The parent company will be the holding corporation, which can operate as a "pure" holding company. It also may have its own business line. Each case is a particular one, we therefore recommend to review the scenario and territory for a set-up thoroughly, before performing. Double taxation agreements of the different countries in relation to the operations between parent and subsidiary must be analysed. Setting up a subsidiary will entail formal and tax obligations, almost identical to those of a normal company. But it represents benefits on strategical scopes, that will result in profits on monetary terms, too. Do you own a subsidiary company or would like to establish one? Contact us. Carrillo Asesores International Department will be glad to help you.

Spanish companies performing activities abroad (for example: constructions, technical installations, professional works on-site ...) that imply posting of its own workers to that country, should thoroughly consider several aspects. The same scenario applies from the point of view of the worker himself. But also to self-employed professionals, or anyone else having a job-offer from abroad and considering acceptance of that proposal. We always recommend to record all issues in writing. This may offer a clear view when it comes to take decisions. Moreover, it may be useful for future argues, in the event of possible tax or labour inspections. Company with jobs abroad Procedures for companies performing abroad activities will very much depend on the destination country. Also on the type of activity. The tax and/or labour authorities in that country may require certain documents to secure an accurate compliance, besides fulfilment of additional issues regarding salary and general working conditions. In addition to this, the company's employees may take profit of special regimes. These regimes may result advantageous in terms of personal income tax and which oblige the company to consider certain special features when preparing payrolls and labour documents. Abroad Worker Tax problems use to raise when a worker moves to foreign countries for executing labour; this applies to those cases when displacement is for a few months in a given year, or whenever anyone is being hired for working abroad. We need to evaluate different questions, depending on each case: Taxation: - What income taxes are payable in each country. Featuring the fiscal residence is compulsory. You may be considered as a fiscal resident in Spain, but also in the other country. Depending on this, the Authorities may strive for several tax scenarios: - If income tax in Spain is payable, is there a possibility to apply for a special advantageous regulation (such as Art. 7p or excess of the Spanish Law of exemption on income taxes)? Labour issues: - Depending on location of activity, whether the posting is within or outside the European Union, the regulation is different; the application of bilateral agreements for maintenance of Spanish social security legislation varies, as well. - Duration of the posting and the country of destination are decisive, too; procedures with the different administrations and compliance of working conditions in the country of destination for the posted workers must be taken into account. The “a priori” protocol in these situations is crucial to help taking decisions. It is also important for demonstrating good faith in case of possible revisions or verifications undertaken by Administrations. Establishing specific rules for each case by an expertise, such as filing of documents, steps to be followed and the supports that leaded to a specific decision, can save many headaches and/or money, at a later date. If you face any of these circumstances, please do not hesitate to contact us! At Carrillo Asesores we will be delighted to fix a protocol that will adjust accurately to the needs of each specific case.

It was on March 9th, 2021 when a quarter of the servers of the company - OVHCLOUD - located in Strasbourg, one of the largest cloud computing providers in the world, caught fire. My company has been affected, so: How can I claim damages to OVHCLOUD? This is the query raised by our customers, repeatedly. Today we are going to tell you a little bit more about the consequences and the impact that this fire is having throughout the digital world. Here are the key points to issue the appropriate claimer. Our Spanish Civil Code states that those who, due to fault or negligence, by action or omission, will be liable for damages, will be obliged to repair the damages caused. Next target: review our contract with OVH, in order to determine the scope of our legal options. Based on the latter, we will develop a solution for Spanish, French, German and other websites that have been affected by the OVH fire, worldwide. In fact, the consequences of this outage affected highly relevant companies, such as: WORDPRESS plug-ins. Online video games such as RUST. Global companies such as NETBLOCKS. For sure, the spread had bad impacts on the above corporative features. But focusing on our own sites represents headaches, as well, to which we would like to offer some clues: Malfunctions of your email during last week. You received a phone call from your IT responsible last week; he informed that your website was affected due to the use of the hosting in his company. Your website crashed, or no orders were received via your online shop, last week. The comments on your forum did not pop up, last week... etc. If so, then you should entrust a team of experts to look after the interests of your website. We, at Carrillo Asesores schedule the appropriate deadlines and claim of damages to offer you the right solutions. Top priority is to: Identify the JUSTIFIABLE DAMAGES These damages must be duly evidenced. We recommend the engagement of a technical expert to show that there is a connection between the fire and the damage to the website. The economic loss that your company has suffered as a result of the damage is another compulsory aspect. The loss of a server (independently if it caused by fire or by any other reasons, such as a cyber-attack) may generate an economic set-back; and it is not just because of the expenses related to re-instalment, as the cost of a server or a new website can be easily quantified (the cost of a server or a new website is well known). But also in terms of losses regarding the company’s stop of revenues, immediate actions should be taken. These two concepts are: Emerging loss; it is the directly quantifiable loss. Loss of profit; the profit that ceases as a result of the consequential loss. Loss of profit. A very common concept in the context of insurance or legal claims. This is the greatest loss that a company can face in these cases, depending if it is a big company or an SME. This estimation of loss of profit must be objectively and duly evidenced. Possible consequences of the OVHCLOUD servers damage Under the assumption that, as a consequence of the outage, there is a damage of the company's online shop (for example if the breakdown did last during several days and the reactivation of the power systems is not feasible), then the following measures will apply: New online shop. Loss of sales via online channel (less increase in sales through other channels during this period due to the absence of the ecommerce portal). Cost of employee hours while dealing with complaints in this regard. Opportunity cost of managing the development of the new online shop by the staff in charge, who cannot focus on other tasks during this time. Etc. From a fiscal point of view, although some of these costs will not be reflected in the official accounting ledgers (such as opportunity costs), others, such as the loss of intangible assets (the server, the website, the online shop...) will apply. These accounting losses can merge to a bad image in front of shareholders, investors, institutions.... It can even take a profitable company with benefits to produce loss and, subsequently lose a part of its capital. Steps to claim damages As a next step, if your website is affected by the blaze, we recommend our clients to inform the company via BUROFAX within briefest delays. The company itself has set up a service to check the status of the domains affected, you can view this at http://ovhcloud Legal actions must be engaged if the company OVH does not undertake the repairs required by law “in natura”, or in those cases where repairs are not feasible due to the fire, then the relative compensations to your company will follow whilst an economic evaluation and compensation in cash. It is important to bear these guidelines in mind, as they may be applicable whenever situations with similar effects occur. Just think of other damages that may harm or destroy your power systems! Where should we claim? The operative FORUM is subject to CONSUMER, online sales and purchases regime; according to article 29 of the Law on Information Society Services (LSSI), the correct approach will be the place of usual residence of the consumer: "Contracts concluded by electronic means in which a consumer acts as a party shall be presumed to be undertaken in the place where the consumer has its regular residence". A closer look at the meaning of the OVH CLOUD fire reveals: In this case, a hosting is a database space for which a licence is rented on a server. It collects the necessary data from a website so that it can exist on the internet. Thus, the website runs on the servers that caught fire. If our company had its backup on that CLOUD, and that CLOUD - OVHCLOUD - did not have backups to protect its customers and/or the services it offered, then it will be the companies’ responsibility to deal with the consequences, Our clients are advised to activate their data recovery plans for such emergencies; it will minimise costs significantly! In fact, the company has stated through its founder Octave Klaba THROUGH THE SOCIAL MEDIA that its commitment is, among others to: Build 10,000 servers in less than 15 days. Test the real operative of all its servers and fibre, especially in the cities of Paris and Frankfurt, which were very badly affected. Re-launch the SBG3 and SBG1 storages. Not an easy challenge! Therefore, although OVHCLOUD is a foreign company, and you are a Spanish company, if you have suffered WEBS damages derived from the fire of the OVH servers, we advise you to count on our Legal Department. And yes, we will make a SECURITY COPY. We will undertake whatever measures are deemed as appropriate to keep your website and your company online and active. Daniel Borrachero - Economist at Carrillo Asesores Macarena Perona - Lawyer at Carrillo Asesores

International taxation of artists, depending on the characteristics of the activity, can be especially harsh when undertaking performances abroad. In fact, all countries want to get “a share of the cake”. Eradicating problems is essential for having a clear guideline of how to work correctly beforehand. Thus, avoid unpleasant surprises, at a later time. Keys to international taxation of artists and actors from Spain Thinking about a scenario comprising an international tour with concerts or performances in different countries… where is the artist or actor, who is considered a Spanish resident for tax purposes, expected to pay taxes? (please refer to the residence criteria). When a resident of one country obtains income in other countries, the preliminary factor to take into account is the Double Taxation Agreement between those two territories. It is crucial to study the place of taxation of said income, according to the type of income obtained. Under the assumption that it is concluded that such income should be taxed in the territory where one is not a tax resident, then, the correct way to proceed (either by means of a Non-Resident Tax return from that country, or directly with a withholding on the invoice...) must be determined. In case of independent professionals and with regard to Personal Income Tax (IRPF in Spain) within the country of our residence is concerned, this can rebate up to the limit allowed by the Convention. This way, we avoid paying taxes twice for the same concept. Example of how an artist based in Spain pays international taxes Say, an actress living in Spain executes performance in another country, for which she will be paid 1,000 euros. According to the agreement between Spain and that other country, the income must be taxable in the country where the performance is executed . In this case, the foreign country. Therefore, under the assumption that a withholding of non-residents for that concept in that country is 14%. So the correct compliance would be retaining 140 euros to the actress’s invoice. Also to provide her with a relative certificate. Subsequently, the actress's Spanish personal income tax return, with the necessary documentation in her hands, will indicate an income of 1,000 euros. This will result in an amount payable, from which those 140 euro retained and executed in the foreign country can be compensated. We assume that the legislation allows the compensation of the entire amount. Therefore, when planning an international tour or performance, we recommend to have an adequate tax planning. It will prevent economic harms for tax adjustments abroad. Moreover, it will minimize the tax burden in the country where one is resident by paying taxes twice for the same concept. Our International Department at Carrillo Asesores will be glad to help you in any of this cases. Please contact us for further assistance.