Skip to main content
Practical Income Manual 2020.

Requirements and conditions for your application

1. Requirements that the entity in which you invest must meet

 Regulations: Art. 68.1.2 Law Personal Income Tax

The entity whose shares or participations are acquired must meet the following requirements:

  1. Take the form of a Public Limited Company, Limited Liability Company, Labor Limited Company or Labor Limited Liability Company, in the terms provided for in the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2, and Law 4/1997, of March 24, on Labor Companies, and not being admitted to trading in any organized market .

    This requirement must be met during all years of ownership of the share or participation.

  2. Carry out an economic activity that has the personal and material means for its development.

    In particular, the activity may not be the management of movable or real estate assets referred to in article 4.8.Dos.a) of Law 19/1991, of June 6, on the Wealth Tax, in any of the tax periods of the entity concluded prior to the transfer of the participation.

  3. The amount of the entity's own funds may not exceed 400,000 euros at the beginning of the entity's tax period in which the taxpayer acquires the shares or participations.

    When the entity is part of a group of companies within the meaning of article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, the amount of own funds will refer to the group of entities belonging to said group.

2. Conditions that must be met by the shares or units in which you invest

Regulations: Art. 68.1.3 Law Personal Income Tax

The following conditions must also be met:

  1. The shares or participations in the entity must be acquired by the taxpayer either at the moment of its constitution or through a capital increase carried out in the three years following said constitution and remain in its assets for a period of more than three years and less than twelve years .
  2. The direct or indirect participation of the taxpayer , together with that held in the same entity by his spouse or any person linked to the taxpayer by kinship, in a straight or collateral line, by consanguinity or affinity, up to the second degree included, cannot be, during any day of the calendar years of holding the participation, greater than 40 per 100 of the entity's share capital or its voting rights.
  3. That they are not shares or participations in an entity through which the same activity that was previously carried out through another ownership is carried out.

3. Formal requirements

Regulations: Art. 68.1.5 Law Personal Income Tax

Compliance with these requirements must be accredited by means of a certification issued by said entity in the tax period in which the acquisition of the same occurred.

To do so, the entity that meets the requirements must present an informative statement in relation to compliance with the requirements, identification of its shareholders or participants, percentage and holding period of the participation.

Note: The obligation to submit an informative return by newly or recently created entities and the information that must be included is established in article 69.1 of the Personal Income Tax Regulations .

Also in relation to this informative declaration, see Order HAP/2455/2013, of December 27, which approves model 165, “Informative declaration of individual certifications issued to partners or participants in newly or recently created entities” and the place, form, term and procedure for its presentation are determined, and the Order of July 27, 2001, which approves models 043, 044, 045, 181, 182, 190, 311, 371, is modified. , 345, 480, 650, 652 and 651, in euros, as well as model 777, payment or return document in the case of late and complementary declarations-settlements, and which establishes the obligation to necessarily use the models in euros as of January 1, 2002 ( BOE of 31).