Requirements and conditions for your application

1. Requirements that must be met by the entity in which the investment is made

 Regulations: Art. 68.1.2 Law Income Tax

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

1. Be in the form of a Public Limited Company, Limited Liability Company, Labour Public Limited Company or Labour Limited Liability Company, in accordance with the terms set forth in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of July 2, and in Law 4/1997, of March 24, on Labour Companies, and not be admitted to trading on any organized market .

   This requirement must be met during all years of holding 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 include the management of movable or immovable assets referred to in article 4.8.Two.a) of Law 19/1991, of June 6, on Wealth Tax, in any of the entity's tax periods concluded prior to the transfer of the participation.

3. The amount of the entity's equity may not exceed 400,000 euros at the start of the tax period in which the taxpayer acquires the shares or interests.

   When the entity forms part of a group of companies within the meaning of Article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts, the amount of equity will refer to the set of entities belonging to said group.

2. Conditions that must be met by the shares or interests in which the investment is made

Regulations: Art. 68.1.3 Law Income Tax

The following conditions must also be met:

1. The shares or interests in the entity must be acquired by the taxpayer either at the time of its incorporation or through a capital increase carried out within three years following said incorporation and remain in its assets for a period of more than three years and less than twelve years

2. The direct or participation of the taxpayer, together with that held in the same entity by his her spouse or any person related to the taxpayer by kinship, in a direct or collateral line, by consanguinity or affinity, up to the degree included, may not exceed, during any day of the calendar years of holding the participation, 40 of the entity's share capital or its voting rights.

3. That they are not shares or interests in an entity through which the same activity is carried out previously carried out through another ownership.

3. Formal requirements

Regulations: Art. 68.1.5 Law Income Tax

Compliance with these requirements must be accredited by a certification issued by said entity in the tax period in which the acquisition took place.

To do so, the entity that meets the requirements must submit a information declaration in relation to compliance with the requirements, identification of its shareholders or participants, percentage and period of holding of the participation.

Note: The obligation to submit an information 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, approving form 165, “Informative declaration of individual certifications issued to partners or participants in newly or recently created entities” and determining the place, form, deadline and procedure for its presentation, and amending Order of July 27, 2001, approving forms 043, 044, 045, 181, 182, 190, 311, 371, 345, 480, 650, 652 and 651, in euros, as well as form 777, payment or refund document in the case of late and complementary declarations-settlements, and establishing the obligation to necessarily use the forms in euros as of January 1, 2013. 2002 ( BOE of 31).