Positive and negative delimitation

A. Positive delimitation

Regulations: Art. 21 Law Income Tax

## All profits or compensation, whatever their name or nature, monetary or in kind, that come, directly or indirectly, from movable capital and, in general, from assets or rights not classified as real estate, of which the taxpayer is the owner and are not related to economic activities carried out by the taxpayer, are considered to be income from movable capital for tax purposes.

The income corresponding to assets, property or rights, which are exclusively related to economic activities carried out by the taxpayer will be included among those derived from the indicated activities.

Important : In no case are assets representing participation in the equity of an entity and the transfer of capital to third parties considered as assigned to economic activities [Art. 29.1 c) Law Income Tax ].

B. Negative delimitation

The following are not considered income from movable capital:

• Derivatives of the delivery of free shares.

  Regulations: Articles 25.1 b) and 37.1 a) and b) Law IRPF

  The tax treatment of the receipt of paid-up shares, both in the case of securities admitted to trading and securities not admitted to trading is discussed in Chapter 11.

  Attention : Since January 1, 2017, the amount obtained from the transfer of both subscription rights from securities admitted to trading and subscription rights from securities not admitted to trading on an organized market is considered capital gain subject to withholding. See Chapter 11.

• Dividends and profit shares distributed by companies originating from tax periods during which said companies were under a tax transparency regime.

  Regulations: Art. 91.9 and tenth transitional provision of Law IRPF ; Fourth transitional provision of the Personal Income Tax Regulation

• The consideration obtained for the deferral or splitting of the price of operations carried out in the development of a habitual economic activity of the taxpayer.

  Regulations: Art. 25.5 Law Income Tax

• Those derived from the lucrative transfers, due to the death of the taxpayer, of the assets representing the collection and use of foreign capital. The negative on movable capital derived from the lucrative transfer of assets representing the raising and use of foreign capital by "inter vivos" acts will also not be computed.

  Regulations: Art. 25.6 Law Income Tax

• The dividends and profit shares referred to in article 25.1 a) and b) of Law Personal Income Tax that come from profits obtained in tax periods during which the entity that distributes them would have paid taxes under the regime of patrimonial companies

  Regulations: Tenth Transitional Provision Law IRPF

• The distribution of profits referred to in article 25.1 a) and b) of Law IRPF obtained by civil companies that had kept accounting adjusted to the commercial code in the years 2014 and 2015 and that became considered taxpayers of the Corporate Tax as of January 1, 2016, during the tax periods in which the income attribution regime would have been applicable, will not be integrated into the taxable base of the recipient who is a taxpayer of IRPF , nor will they be subject to withholding and payment on account.

  Regulations: Thirty-second transitional provision.3 of the LIS