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Practical Handbook for Companies 2021

Change of residence to Member States of the European Union or EEA (art. 19.1 LIS)

Pursuant to Article 19.1 of the LIS, the difference between the market value and the tax value of the assets owned by an entity resident in Spanish territory which transfers its residence to a Member State of the European Union or the European Economic Area which has concluded an agreement with Spain or with the European Union on mutual assistance for the recovery of tax claims equivalent to the mutual assistance provided for in Council Directive 2010/24/EU of 16 March 2010, will be included in the tax base, except where such assets are assigned to a permanent establishment located in Spanish territory of the aforementioned entity.

With effect for the tax periods beginning on or after 1 January 2021, the possibility that the taxpayer had of deferring payment of the tax debt resulting from including in the tax base the difference between the market value and the tax value of the assets owned by the entity resident in Spanish territory that transfers its residence to a Member State of the European Union or of the European Economic Area that has concluded an agreement with Spain or with the European Union on mutual assistance in the recovery of tax debts, is replaced by the possibility of dividing this payment, also at the request of the taxpayer, by equal annual fifths.

In the case of change of residence, transfer to Spain of assets or activities which, in accordance with the provisions of Article 5 of Council Directive (EU) 2016/1164 of 12 July 2016, have been subject to exit taxation in a Member State of the European Union, the value determined by the Member State of exit will be considered as the tax value in Spain, unless it does not reflect the market value.

Finally, it should be noted that will not be included in the tax base, the difference between the market value and the tax value of the assets transferred, which are related to the financing or provision of guarantees or to comply with prudential capital requirements or for liquidity management purposes, provided that they are expected to return to Spanish territory to be allocated within a maximum period of one year to a permanent establishment located in Spain.

Filling in form 200

In the event of a change of residence to a Member State of the European Union or of the European Economic Area under the terms set out in the previous section, the amount of the tax debt resulting from including in the tax base the difference between the market value and the tax value of the assets transferred should be included in the boxes [01572] and [01573] "Change of residence to Member States of the European Union or EEA (art. 19.1 LIS)" on page 12 of form 200, the amount of the tax debt resulting from including in the tax base the difference between the market value and the tax value of the assets transferred.

Remember:

These boxes must be completed with the amount of the aforementioned difference in value, even if the taxpayer does not choose to pay in instalments in accordance with Article 19.1 LIS.

When the taxpayer chooses to split the payment of the tax debt resulting from the application of Article 19.1 of the LIS, this option must be exercised by ticking in the tax return corresponding to the tax period ending on the occasion of the change of residence, the box [00037] "Option of splitting art. 19.1 LIS" on page 1 of form 200.

To make the payment of the different instalments, the section "Option of instalments art. 19.1 LIS" on page 14 bis of form 200 must be completed.