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Practical Handbook for Companies 2021

Acquisition of holdings in non-resident entities

The fourteenth transitional provision of the LIS establishes that the deduction established for the acquisition of shares in non-resident entities, in section 5 of article 12 of the RDLeg. 4/2004 of 5 March 2004, as currently in force for tax periods commencing prior to 1 January 2015, shall continue to apply, subject to the conditions and considerations set out below.

This deduction from the tax base for the acquisition of shares in non-resident entities is also subject to the following conditions and considerations:

  • shall not apply to acquisitions of securities representing equity interests in non-resident entities in Spanish territory made after 22 December 2007, without prejudice to the provisions of Article 1(3) of the European Commission Decision of 28 October 2009 and Article 1(3) of the Commission Decision of 12 January 2011 on the tax amortisation of financial goodwill for the acquisition of foreign shareholdings, Case C-45/2007, in respect of acquisitions related to an irrevocable obligation agreed prior to 22 December 2007.However, in the case of acquisitions of securities conferring a majority stake in the equity of entities resident in another non-EU Member State, made between 22 December 2007 and 21 May 2011, the deduction may be applied when it is demonstrated that there are explicit legal obstacles to cross-border business combinations, under the terms established in Article 1.4 and 1.5 of the aforementioned Commission Decision of 12 January 2011, in accordance with the provisions of the third paragraph of Article 12.5 of RDLeg.4/2004, as amended by the sixth final provision of Law 31/2011, of 4 October, although it contains the corresponding correction of errors (published in DOUE of 26 November 2011) of the aforementioned Decision of the European Commission of 12 January 2011, according to which, for acquisitions made on 21 December 2007, the aforementioned article 12.5 of RDLeg.4/2004.

  • And since there have been other wordings of article 12.5 of RDLeg.4/2004 prior to that given by Law 31/2011, for tax periods starting on or after 1 January 2015, the following should be taken into account:

    • In relation to acquisitions of shares in non-resident entities in Spanish territory made after 1 January 2011, the deduction will only be applicable in the cases admissible according to the wording of the third paragraph of article 12.5 of RDLeg.4/2004 amended by Act 31/2011.

    • In relation to acquisitions of holdings in non-resident entities in Spanish territory made on or after 22 December 2007, the corresponding amount relating to the pending deduction generated in tax periods commencing before 1 January 2011 will only be applicable to the cases permitted in the wording of the third paragraph of article 12.5 of RDLeg.4/2004 amended by Act 31/2011, with the aforementioned subjection.

    • In relation to the holdings of non-resident entities in Spanish territory acquired between 1 January 2002 and 21 December 2007, the corresponding outstanding amounts may be deducted.

Filling in form 200

Taxpayers who in tax periods commencing on or after 1 January 2002 have acquired securities representing holdings in the equity of entities not resident in Spanish territory whose income qualifies for the exemption provided for in Article 21 of RDLeg.4/2004 or the exemption provided for in Article 20 bis of Law 43/1995, the following adjustments must be made in the boxes [00329] and [00330] "Acquisition of shares in non-resident entities (DT 14ª LIS)" on page 13 of form 200:

  • In the box [00330] of decreases shall include the amount that does not correspond to the assets and rights of the non-resident entity in Spanish territory, of the (positive) difference between the acquisition price of the holding and the net assets of the investee company at the date of acquisition, in proportion to that holding.

  • And when transfer the aforementioned securities, they must enter in the box [00329] of increases that amount which, on acquiring them, they included in box [00330] as a decrease.