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Non-Resident Taxation Guide (February 2023)

Other capital gains

Internal regulations

Regulations:article 13.1.i) Law IRNR

According to Spanish law, capital gains are understood to be obtained in Spanish territory in the following cases:

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

  • When they are derived from other liquid assets situated in Spanish territory or from rights that must be satisfied in Spanish territory.

  • When assets situated in Spanish territory or rights that must be satisfied or exercised in Spanish territory are incorporated into the taxpayers assets, even when not derived from a previous transfer, such as net gains from gambling activities.

Domestic legislation provides for several exemptions.

(Regulations:Article 14.1.points (c), (e) and (i).Non-Resident Income Tax Law)

For example:

  • Capital gains derived from movable property obtained by residents in another Member State of the European Union or, with effect from 1 January 2021, in another Member State of the European Economic Area which 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 on the exchange of tax information under the terms provided in Law 58/2003, of 17 December, General Taxation, 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 State of the European Economic Area (unless sourced through a tax haven (with effect from 11 July 2021, references to tax havens are understood as references to the definition of a non-cooperative jurisdiction.See Annex IV), or in the case of 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 in the case of gains derived from the transfer of shares, participations or other rights in an entity and the taxpayer, an individual at some time during the 12-month period preceding the transfer, has directly or indirectly participated in at least 25% of the capital or assets of that entity.In the case of non-resident entities, if the transfer does not meet the requirements for applying the exemption set out in Article 21 of the Corporation Tax Act).

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

  • The income derived from the assignment of securities or the reimbursement of shares in investment funds made in official secondary markets of Spanish securities, obtained by resident individuals or organisations in a country with which Spain has signed an Agreement with a clause for information exchange, except when it is obtained through a tax haven (Appendix V).See Annex IV).

Agreement

In accordance with the Conventions, taxation of these gains is normally the exclusive responsibility of the State of residence, and they are exempt in Spain.However, there are exceptions in many agreements when they derive from stocks or shares in organisations based on property assets, permitting taxation in the State where the buildings are located.Each agreement must be consulted.

Taxation

Regulations:articles 24, 25, 26 and Single transitional provision on Non-Resident Income Tax Law

Income obtained without the intermediation of EP must be taxed separately for each total or partial accrual of the taxable income.The taxation applied will be operation by operation, so there is no compensation between capital gains and losses.

The taxable base corresponding to capital gains shall be determined by applying, in general, to each capital change, the rules of IRPF.Gains shall be calculated as the difference between the transfer and acquisition values.

In the case of net gains obtained by natural persons deriving from capital assets acquired before 31 December 1994, a transitional regime reducing the amount of the net gains may be applicable.

As regards capital gains (derived from rights or shares in an organisation whose assets are mainly composed of real estate assets situated in Spanish territory or which attribute to the holder the right to enjoy real estate assets situated in Spanish territory), the proceeds of the transfer of rights or shares in resident organisations in countries or territories with which there does not exist an effective exchange of tax information, the value of the transfer will be determined by the market value, at the moment of transfer, of the real estate assets situated in Spanish territory or of the rights to enjoy those assets.See Annex IV), the transfer value will be determined proportionally to the market value, at the time of the transfer, of the immovable property situated in Spanish territory, or of the rights of enjoyment over such property.The real estate assets situated in Spanish territory will remain liable for the payment of the tax.

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

Otherwise, it will be the general rate in force:

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

Deductions:of the tax liability may only be deducted:

  • Deductions for donations, under the conditions described in the Income Tax Act and in the Act on the tax regime of non-profit organisations and of tax incentives for patronage.

  • Tax withholdings that have been applied on the taxpayer's income.