Spanish Fixed Income

Historical development of tax compliance with Spanish regulation

Acupay offers a fiscally compliant door to the global markets for Spanish issuers, which has been used by all large Spanish issuers for more than 8 years.

The Acupay system is a fiscal communications network which addresses prior challenges to compliance with Spanish Law 19. It provides the most secure solution to the hurdles Spanish issuers and investors face--a huge benefit to both issuers and global investors alike.

Recent legislative changes have confronted Spanish issuers with new hurdles, however our years of experience in this market enabled us to react quickly and help issuers overcome these new challenges.

These are not the first changes market participants have faced in the Spanish market in terms of tax legislation. Past efforts to achieve compliance with Law 19/2003 and Royal Decree 1778/2004 market participants also had to overcome many challenges and constraints:

  • No permanent tax procedures. Most offering documents described the tax procedures as provisional (i.e., “under development”). Offering memos warned, in bold, that: “the clearing systems are currently in discussion to harmonize the procedures for the provision of information....”
  • Tax certificates were generally collected from investors who held the securities 2 to 15 days before each payment date. This advance collection was necessitated by the time to collect and process physical tax certificates. However, payments were disbursed to holders owning the securities on payment date. This created a timing mismatch between “tax certificate collection” and “payment disbursement."

As you can see, these past procedures resulted in accounting burdens falling upon the issuer, while they should have been borne by others.

Current Procedures

The Acupay System operates electronically and is ISO 20022 compliant, permitting the issuance and redemption of thousands of notes each month. Acupay supports commercial paper programs including those in the United States (USCP) and Europe (ECP).

Acupay permits submission of all required tax compliance data on the holders of Spanish debt via ISO 20022 compliant electronic methods. To permit tax data exchange with non-ISO enabled financial intermediaries, Acupay has also established a customized web interface and a unique barcoding system for the transmission of supporting documentation.

Acupay automatically reconciles all tax compliance information received from financial intermediaries to their confirmed holdings at DTC, the ICSDs or at other CSDs such as JASDEC, Austraclear, CDS and Indeval.

The Acupay System flawlessly reconciles tax compliance information with Spanish Modelo reporting, providing to the issuer completed tax compliance information and documentation for their tax reporting. All tax compliance information received by Acupay on behalf of Spanish issuers may be viewed at any time on the Realtime system.

Acupay’s strength in the Spanish market is its ability to react swiftly and efficiently to the constant evolution of Spanish tax regulations and requirements as seen in the past 10 years.