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Non-Resident Taxation Manual (July 2024)

Other capital gains

Internal regulations

Regulations: Article 13.1.i) Law IRNR

According to internal regulations, capital gains are considered to be obtained in Spanish territory in the following cases:

  • When they are derived from securities issued by resident individuals or organisations.

  • When they derive from other movable property located in Spanish territory or from rights that must be fulfilled in said territory.

  • When assets located in Spanish territory or rights that must be fulfilled or exercised in said territory are incorporated into the taxpayer's assets, even when they do not derive from a prior transfer, such as winnings from gambling.

The internal regulations contemplate several cases of exemption .

(Normative: Article 14.1. letters c), e) and i). IRNR Law)

As an example:

  • Capital gains derived from movable property obtained by residents of another Member State of the European Union or, with effect from 1 January 2021, in another Member State of the European Economic Area that is not a Member State of the European Union, provided that there is an effective exchange of information on tax matters (with effect from 11 July 2021, regulatory references made to States with which there is an effective exchange of tax information are understood to be made to States with which there are regulations on mutual assistance in matters of the exchange of tax information in the terms provided for in Law 58/2003, of 17 December, General Tax Law, which is applicable). See Annex V ) or by permanent establishments of such residents located in another Member State of the European Union or, with effect from 1 January 2021, in another Member State of the European Economic Area (except where they are obtained through a tax haven (with effect from 11 July 2021, references to tax havens are deemed to be made to the definition of a non-cooperative jurisdiction). See Annex IV ), or that they are gains derived from the transfer of shares, interests or other rights in an entity whose assets consist mainly of real estate located in Spain, or that they are gains derived from the transfer of shares, interests or other rights in an entity and the taxpayer, a natural person at any time during the 12-month period preceding the transfer, has participated directly or indirectly in at least 25% of the capital or assets of said entity. In the case of non-resident entities, the transfer does not meet the requirements for the application of the exemption provided for in article 21 of the Corporate Tax Law).

  • Capital gains derived from securities issued in Spain by non-residents.

  • Income derived from the transfer of securities or the reimbursement of shares in investment funds made on official Spanish secondary securities markets, obtained by persons or entities resident in a country with which Spain has signed an agreement with an information exchange clause, unless they are obtained through a tax haven (with effect from July 11, 2021, references made to tax havens are understood to be made to the definition of non-cooperative jurisdiction. See Annex IV ).

Agreement

According to the Conventions, normally, the tax authority over these profits corresponds exclusively to the State of residence, being exempt in Spain. However, there are exceptions in many Agreements when they derive from shares or interests in entities with real estate background, which allow the taxation in the status of the real estate. Each Convention will have to be consulted.

Taxation

Regulations: Articles 24, 25, 26 and Sole Transitional Provision of the IRNR Law

Income obtained without the mediation of EP must be taxed separately for each total or partial accrual of the income subject to tax. Taxation must be carried out on a transaction-by-transaction basis, so there is no room for offsetting capital gains and losses.

The taxable base corresponding to capital gains will be determined by applying, in general, to each change in assets, the rules of Personal Income Tax . Profits will be calculated by the difference between the transfer and acquisition values.

In the case of profits obtained by individuals derived from assets acquired before December 31, 1994, a transitional regime of reduction of the amount of the profit may be applicable.

In the case of capital gains (derived from rights or interests in an entity whose assets consist mainly of real estate located in Spanish territory or which grant their owner the right of enjoyment over real estate located in Spanish territory), those arising from the transfer of rights or interests in entities resident in countries or territories with which there is no effective exchange of tax information (with effect from July 11, 2021, references made to countries or territories with which there is no effective exchange of information are understood to be made to the definition of non-cooperative jurisdiction. See Annex IV ), the transfer value will be determined by proportionally taking into account the market value, at the time of the transfer, of the real estate located in Spanish territory, or of the rights of enjoyment over said assets. Real estate located in Spanish territory will be subject to the payment of the tax.

If they derive from the transfer of an asset, applicable tax rate is %.

Otherwise, the general rate in force will be:

  • Residents EU, Iceland, Norway and, since 07-11-2021, Liechtenstein: 19%
  • Rest of taxpayers: 24%

Deductions: Only the following may be deducted from the tax rate:

  • Deductions for donations, under the terms provided for in the Personal Income Tax Law and in the Law on the tax regime of non-profit entities and tax incentives for patronage.

  • The withholdings that have been made on income.