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Non-Resident Taxation Manual (February 2024)

Other capital gains

Internal regulations

Regulations: article 13.1.i) Law IRNR

In accordance with internal regulations, capital gains are considered 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 gambling winnings.

Several exemption cases are contemplated in the internal regulations .

(Normative: article 14.1. letters c), e) and ei). IRNR Law)

As an example:

  • Capital gains derived from movable property obtained by residents in another Member State of the European Union or, with effect from January 1, 2021, in another State member of the European Economic Area that is not a Member State of the European Union, provided that there is a cash exchange of information on tax matters (with effect from July 11, 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 exchange of tax information in the terms provided for in Law 58/2003, of December 17, General Tax, 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 January 1, 2021, in another State member of the European Economic Area ( except that 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 a non-cooperative jurisdiction. See Annex IV ), or that these are gains derived from the transfer of shares, participations or other rights in an entity whose assets consist mainly of real estate located in Spain, or that are of profits derived from the transfer of shares, participations or other rights in an entity and the taxpayer, an individual 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 in 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, except that 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 a non-cooperative jurisdiction. See Annex IV ).

Agreement

In accordance with the Conventions, normally, the tax power on these profits corresponds exclusively to the State of residence, being exempt in Spain. However, there are exceptions in many Agreements when they arise from shares or participations in entities with a real estate substrate, which allow taxation in the State of the property. Each Agreement will have to be consulted.

Taxation

Regulations: articles 24, 25, 26 and sole transitional provision 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 operation by operation, so there is no compensation between capital gains and losses.

The tax base corresponding to the capital gains will be determined by applying, in general, to each capital alteration, the Personal Income Tax rules. Profits will be calculated by the difference between the transmission and acquisition values.

In the case of profits obtained by natural persons derived from assets acquired prior to 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 participations in an entity whose assets are mainly constituted by real estate located in Spanish territory or that attribute to its owner the right of enjoyment over real estate located in Spanish territory), those 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 made to the definition of non-cooperative jurisdiction. See Annex IV ), the transfer value will be determined proportionally to the market value, at the time of the transfer, of the real estate located in Spanish territory, or the rights of enjoyment on said assets. Real estate property located in Spanish territory will be subject to payment of the tax.

If they arise from the transfer of an asset, the applicable tax rate is 19%.

Otherwise, it will be the current general rate:

  • 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, in the terms provided 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 would have been made on the income.