7.6.5.3. Exemption for reinvestment in newly created companies

1. Exemption

   The capital gain that is revealed on the occasion of the transfer of shares or participations for which the deduction for investment in new or recently created companies has been ## is exempt, provided that the amount obtained by the aforementioned transfer is reinvested in the acquisition of shares or participations in another newly or recently created entity that meets certain requirements and conditions.

2. Total or partial reinvestment

   The exemption may be total, if the total amount obtained from the transfer of the shares is reinvested, or partial when the amount reinvested is less than the total received in the transfer. In the latter case, only the proportional part of the capital gain obtained that corresponds to the reinvested amount will be excluded from taxation.

3. Reinvestment term

   The reinvestment of the amount obtained from the sale must be carried out, in one go or successively, in a period not exceeding one year from the date of transfer of the shares or participations.

   When the reinvestment is not carried out in the same year as the sale, the taxpayer will be obliged to state in the tax return Personal Income Tax for the year in which the capital gain is obtained his intention to reinvest under the conditions and deadlines indicated.

4. Excluded assumptions

   The reinvestment exemption will not apply:

   • When the taxpayer had acquired homogeneous securities in the year before or after the transfer of the shares. In this case, the exemption will not apply to the values that remain in the taxpayer's assets.

   • When the shares are transmitted to the spouse, or to relatives in a direct or collateral line, by consanguinity or affinity, up to and including the second degree.

   • When the shares or participations are transferred to an entity with respect to which, with the taxpayer or with any of the persons mentioned in the previous point, any of the circumstances established in article 42 of the Commercial Code.

5. Failure to comply with the conditions of the reinvestment

   Failure to comply with any of the conditions of the reinvestment determines the subjection to taxation of the corresponding part of the capital gain.

   In such case, the taxpayer must allocate the part of the capital gain that is not exempt to the year of its obtaining, carrying out, for this purpose, complementary self-assessment including late payment interest.

   The complementary self-assessment will be submitted within the period between the date on which the non-compliance occurs and the end of the regulatory declaration period corresponding to the tax period in which said non-compliance occurs.