Interview with Dèlcia Capocasale

Editor’s Note: ABA Tax Times interviewer Jeremiah Coder (ATT) recently spoke with Dèlcia Capocasale (DC), a member of Cuatrecasas, New York and Barcelona (an international law firm), about her decision to choose a career in tax and her experiences as a foreign lawyer.

ATT: Hi Dèlcia! As a foreign lawyer with a successful practice advising clients around the globe on international investments, you’ve had a unique career toggling between multiple countries. What got you interested in tax in the first place?

DC: When I was at university, I quickly realized that tax law was my field. Not only because taxation plays a fundamental role in society, but also because it was completely connected with many different areas of law. When dealing with international structuring, you need extensive knowledge not only of concepts of foreign laws, but also of important aspects of corporate law. When dealing with private client matters, you need to have a good understanding of civil law and different types of mechanisms under different legislation. When dealing with tax litigation, you need a good understanding of litigation procedures and strategies.

I believe tax is the broadest and most dynamic field of law—and also the most challenging in terms of being frequently updated and requiring attorneys to stay continuously on top of the changes. It also offers many possibilities in terms of being innovative. There is not much room for routine in being a tax lawyer!

ATT: What, if anything, surprises you most about the practice of tax law/tax profession?

DC: For my entire career, I have practiced law in a law firm that was founded more than 100 years ago as a tax boutique. We were pioneers in an environment where taxes were not as important as they are today (or at least not as regulated as today), but this fact was critical to establish a law firm where the tax lawyer’s role is certainly very strong. Many of our ongoing clients, domestic or international, are tax driven. I mean, the lawyer in charge of leading the client is a tax lawyer. I believe this is a bit unusual outside the scope of my law firm.

Another aspect that I was in awe of was the degree of connection between tax lawyers in the international forums. I believe that organizations such as the ABA have really contributed to creating a climate of excellence and business opportunities for tax lawyers, making the international tax world more accessible.

ATT: What are some of the unique challenges of practicing in the U.S., compared to your native Spain?

DC: Well, after more than three years in the U.S., I can certainly say that you have one of the most complex tax systems in the world! I have had to deal on a daily basis with concepts that I needed to understand before being able to provide advice on the Spanish side. I am not a U.S. tax practitioner, but I would not be able to provide good advice on the Spanish side to my clients if I did not understand some of your main tax rules. During my first year in New York, I devoted many hours to reading articles, newsletters and presentations (on tax, but also on reporting and other regulatory and corporate issues) to better communicate with U.S. lawyers and U.S. clients.

The U.S. tax system differs a lot from any tax system in continental Europe. Even an instrument such as a tax treaty follows its own mechanism of application and interpretation, so it requires a deep specific geographical knowledge.

ATT: How does the ABA differ from professional associations in Spain?

DC: The first time I attended the ABA meetings, back in 2017, I was really surprised about the commitment of the members with the organization, particularly with foreign lawyers.

In Spain, we have several professional associations in different fields of law or market sectors, but, as far as I know, none of them has a section committed to interactions with foreign lawyers, or not at least in the way the ABA does. The point with the ABA is that under the umbrella of the same organization (and section), you can deal with many different topics. Although most of them refer to U.S. domestic regulations, there is also room for foreign lawyers.

I perfectly remember the first time the ABA invited me to speak: it was the 2018 Fall Tax meeting in Atlanta. I felt very honored (and a bit overwhelmed!) but this helped me to understand the importance of being proactive and collaborative in this framework because it really works as a place to strengthen professional ties.

ATT: Have you seen a trend in international issues trickling down into generally “domestic” tax planning areas?

DC: There is a clear trend on this. With every new deal, the borders between domestic and international become more and more blurred. Although I strongly advocate for the so-called “tax specializations”, nowadays it is very complex to provide overall international advice without being able to understand domestic issues. Clients are more global than ever, and they search for global solutions for local issues. We can only provide good services if we offer a holistic perspective of tax law. This does not mean that you need to know everything/everywhere; this just means that you need to work with good partners to tackle those matters beyond your area of deep knowledge and, of course, beyond your country of practice!

ATT: How has the COVID-19 pandemic affected cross-border tax planning?

DC: During the hardest months of the pandemic, clients were mainly focused on domestic planning to manage their treasury position and renegotiating agreements (and therefore revisiting valuation for related and unrelated transactions). M&A and transactional work was completely frozen but bankruptcy-and financing-connected tax matters kept us busy. After the summer things changed of course and transactional work came back to our tables. The market is full of good opportunities to invest in many different sectors. During the last months of 2020, I have been involved in several cross-border investment structures from U.S. to Spain and vice versa. Although we are dealing with a new wave of distressed investments (in Spain, this is particularly relevant in the tourism and leisure industry), we are also seeing an investor appetite for certain sectors such as healthcare, food and infrastructure.

Latin America is also offering good opportunities of investment in different industries.

ATT: How has “globalization” of tax changed international tax lawyers’ thinking about the risks facing clients?

DC: Nowadays, the key word for a tax lawyer is “reporting”, and reporting does not only imply fulfilling the formal requirement. We also need to understand the transaction in all its angles. A cross-border transaction cannot be analyzed as a puzzle where local tax advisors just provide domestic advice. Now, more than ever, we need to understand what happens in every country. Wherever there is a deductible expense, to ensure there is a taxable income somewhere. We need to disclose every single relevant member on the top of an international structure and to understand what the effective global tax rate is to ensure a domestic credit can be recoverable in a different jurisdiction or whether related entities have been properly considering their transactions.

Globalization for tax lawyers means a global perspective of the matter and getting to the end of the matter while avoiding vague statements.

ATT: What do you find most rewarding about your practice?

DC: Taxation, particularly corporate tax planning, is very connected to the business decisions. We, as tax lawyers, are not just a part of the legal advice. In most of the cases the business decision or the business opportunity is driven by the analysis of tax issues. This puts us in the front row every time and being able to get this kind of direct contact with the market is certainly a fulfilling experience.

At the same time, we are very exposed to politics. This is not always rewarding. (In fact, most of the time it can be quite stressful!) But being so close to community activities allows us to play an active role.

ATT: When you’re not busy thinking about tax, what do you do to unwind? How important is it to maintain balance for mental health?

DC: I would say that my preferred option is spending quality time with my family and friends. We all have very busy schedules, but this should not prevent us from creating great memories with our loved ones. I also have a pile of “non-tax books” pending to read: from history and essays to the most easy-going best sellers.

ATT: Do you have a favorite depiction of a lawyer in a movie or book?

DC: Atticus Finch in “To Kill a Mockingbird.” Beyond differences in our respective practices, I think the character possessed deeply needed values for a lawyer and was passionate for the profession. ■