Determination of full performance

1. In the case of interest and other remuneration agreed or estimated for the transfer of own capital to third parties

   The integration of these earnings into the tax base will be carried out for the full amount, without deducting the withholding tax applied to said earnings.

   If the remuneration is in kind, the valuation of the performance (market value of the good, right or service received) plus the payment on account will be included in the tax base, unless this has been passed on to the holder of the performance (Art. 43.2 Law IRPF ).

   The provision of assets or rights likely to generate income from movable capital shall be presumed to be remunerated, unless proven otherwise. In the absence of evidence to the contrary, the valuation of the estimated income in the case of loans and operations to raise or use external capital in general, will be carried out by applying the legal interest rate in force on the last day of the tax period, 3% for the 2019 fiscal year.

2. In the case of operations on financial assets

   The integration into the tax base of the income derived from the transfer, reimbursement, amortization, exchange or conversion of any kind of financial assets will be carried out in accordance with the following rules:

   1. The calculation of each return must be carried out individually, for each title or asset, by the difference between the sale, amortization or reimbursement values and the acquisition or subscription values.
   2. The accessory costs of acquisition and disposal, provided that they are paid by the purchaser (acquisition value) or transferor (transfer or reimbursement value) and are adequately justified, must be included in the quantification of the profit obtained.
   3. Negative returns will be integrated with positive returns, except in the case where the taxpayer has acquired homogeneous financial assets within the two months prior to or after said transfers, in which case, said negative returns will be integrated as the financial assets that remain in the taxpayer's assets are transferred [Art. 25.2 b) Law Income Tax ].

      See also in relation to this last rule article 8 of Regulation IRPF "Concept of homogeneous securities or participations".

   Consequently, the amount of the return on movable capital will be determined by carrying out the following operation:

   Performance = Sale or redemption value - Acquisition or subscription value

   For these purposes, the amount of expenses and taxes inherent to said operations paid, which are adequately justified, will be considered as the higher acquisition or subscription value, or as the lower transfer, reimbursement or amortization value, without any withholdings or payments on account made being considered as such.

   As a general rule, capital gains derived from financial assets are subject to withholding or payment on account.

   Notwithstanding the foregoing, there is no obligation to withhold or make payments on account of the following income (Art. 75.3 Regulation IRPF ):

   • Yields on securities issued by the Bank of Spain that constitute a regulatory instrument for intervention in the monetary market and yields on Treasury Bills. However, income derived from account contracts based on Treasury Bill transactions entered into with credit institutions and other financial institutions is subject to withholding or payment on account.
   • Income from accounts abroad paid or credited by permanent establishments abroad of credit institutions and financial institutions resident in Spain.
   • Conversion premiums for bonds into shares.
   • The returns derived from the transfer or reimbursement of financial assets with explicit returns, provided that they meet the following requirements:
     1. That they are represented by account entries.
     2. That they are traded on an official Spanish secondary securities market.

   However, income derived from account contracts based on transactions on the above securities that are entered into with credit institutions and other financial institutions are subject to withholding or payment on account.

   Outline of the Fiscal Regime of the State Public Debt

   Fiscal regime of the State Public Debt

   (*) The portion of the yield equivalent to the accrued coupon is subject to withholding in the transfers of the aforementioned securities when they are carried out during the 30 days immediately prior to the maturity of the coupon by a taxpayer of the IRPF to a taxpayer of the Corporate Tax or to a person or entity not resident in Spanish territory. (Back)
   Modalities	Quantifying performance	Retention
   1. Treasure letters	Alienation value - Acquisition value	No
   2. State bonus	Coupon: full amount	Yes
   	Alienation value - Acquisition value	No (*)
   3. State Obligations	Coupon: full amount	Yes
   	Alienation value - Acquisition value	No (*)
   4. Financial accounts in Bills, Bonds and Obligations	Alienation value - Acquisition value	Yes