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Practical manual for Income Tax 2023.

Special regime for tax deferral of securities exchange

Regulations: Articles 37.3 Law IRPF and 80 LIS

Requirements

The special tax deferral regime provided for in Chapter VII of Title VII of the LIS , is applicable to taxpayers of IRPF who carry out the exchange of securities defined in article 76.5 of the LIS as the operation by which an entity acquires a stake in the share capital of another that allows it to obtain the majority of the voting rights in it or, if it already has such a majority, acquire a greater stake, by attributing to the partners, in exchange for their securities, other securities representing the share capital of the first entity and, where appropriate, monetary compensation not exceeding 10% of the nominal value or, in the absence of nominal value, a value equivalent to the nominal value of said securities deducted from its accounting; provided the following requirements are met:

  • That the partners who carry out the exchange of securities reside in Spanish territory or in that of another Member State of the European Union or in that of any other State provided that, in the latter case, the securities received are representative of the share capital of an entity resident in Spain.

  • That the entity that acquires the securities is resident in Spanish territory or is included in the scope of application of Directive 2009/133/ CE .

  • That the operations do not involve entities domiciled or established in countries or territories classified as tax havens or that the income is obtained through them.

Valuation of assets received

When the above requirements are met, the capital gains that arise from the exchange of securities will not be included in the taxpayer's tax base.

The valuation and seniority of the shares received by the partners by virtue of the exchange must be carried out, for the purposes of future transfers, for the acquisition value and seniority of the shares delivered. This valuation will be increased or decreased by the amount of the additional monetary compensation given or received.

When the partner is considered to be an entity under the income attribution regime , the gain generated on the occasion of the exchange of securities will not be included in the tax base of the persons or entities that are partners, heirs, co-owners or participants in said partner, provided that the operation is subject to the tax regime established in Chapter VII of Title VII of the LIS or is carried out under Council Directive 2009/133/EC of 19 October on the common tax regime applicable to mergers, spin-offs, partial spin-offs, contributions of assets and exchanges of securities between companies of different Member States and to the transfer of the registered office of an SE or an SCE from one Member State to another, and the securities received by the partner retain the same tax valuation as those exchanged.

Important: The special tax deferral regime will not apply when the operation carried out has as its main objective tax fraud or evasion. In particular, the regime will not apply when the transaction is not carried out for valid economic reasons, such as the restructuring or rationalisation of the activities of the entities involved in the transaction, but for the sole purpose of obtaining a tax advantage.

Loss of resident status in Spanish territory

Regulations: Art. 80.4 LIS

  • Temporary Imputation

    In the event that the partner who applied the special tax deferral regime loses the status of resident in Spanish territory, the difference between the market value of the shares or participations and their value calculated in accordance with the above (that is, by tax value of those delivered) will be included in the taxable base of IRPF of the last tax period to be declared for this tax, unless the shares or participations are assigned to a permanent establishment located in Spanish territory.

  • Deferral of debt payment due to change of residence to other States of the European Union or the European Economic Area ropeo

    However, payment of the resulting tax debt, when the partner acquires residency in a Member State of the European Union or the European Economic Area with which there is an effective exchange of tax information under the terms set forth in section 3 of the First Additional Provision of Law 36/2006, of 29 November, on measures to prevent tax fraud, will be deferred by the tax authorities at the request of the taxpayer until the date of transfer to third parties of the affected shares or interests, with the provisions of LGT and its implementing regulations applying, regarding the accrual of late payment interest and the establishment of guarantees for such deferral.

    In relation to the LGT see Law 58/2003, of December 17, General Tax.

  • Restoration of resident status in Spanish territory

    If the taxpayer were to once again acquire the status of taxpayer of IRPF without having transferred ownership of the shares or interests, he/she may request a correction of the self-assessment in order to obtain a refund of the amounts paid corresponding to these capital gains. The rectification request may be submitted from the end of the declaration period corresponding to the first tax period in which a self-assessment of the IRPF must be submitted.

Obligation to communicate

The carrying out of securities exchange operations to which the special tax deferral regime provided for in the LIS applies must be communicated to the tax authorities by the entity acquiring the operations. However, if the acquiring entity is not resident in Spanish territory, said communication will be made by the transmitting entity. And if neither the acquiring entity nor the transferring entity are resident in Spanish territory, it will be the partners, provided they are resident in Spanish territory, who must submit the communication.