7. Securities owned by non-residents

Regulations: Art. 4.Seven Wealth Tax Law

The securities belonging to non-residents whose income is exempt are exempt by virtue of the provisions of article 14 of the consolidated text of the Tax Law the Income of Non-Residents, approved by Royal Legislative Decree 5/2004, of March 5.

In accordance with the provisions of the aforementioned article 14 of the consolidated text of the Non-Resident Income Tax Law, the following will be exempt, among others:

• Capital gains derived from movable property obtained without the mediation of a permanent establishment, by residents in another Member State of the European Union or by permanent establishments of said residents located in another Member State of the European Union.

  The provisions of the previous paragraph will not apply to capital gains derived from the transfer of shares, participations or other rights in an entity in the following cases:

  1. That the entity's assets consist mainly, directly or indirectly, of real estate located in Spanish territory.
  2. In the case of natural person taxpayers, who, at some previous time, during the 12-month period preceding the transfer, the taxpayer has participated, directly or indirectly, in at least 25 percent of the capital or assets of the entity.

  3. 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.

  Nor will the aforementioned exemption apply in the case of capital gains obtained through countries or territories legally classified as tax havens.

• Income derived from Public Debt, obtained without the mediation of a permanent establishment in Spain.

• Income derived from securities issued in Spain by non-resident individuals or entities without the mediation of a permanent establishment, regardless of the place of residence of the financial institutions that act as payment agents or mediate in the issuance or transmission of the securities.

  However, when the owner of the securities is a permanent establishment in Spanish territory, the income referred to in the previous paragraph will be subject to this tax and, where appropriate, to the withholding system, which will be practiced by the institution. resident financial institution that acts as depositary of the securities.

• Income derived from the transfer of securities or the reimbursement of shares in investment funds carried out in one of the official secondary markets for Spanish securities, obtained by non-resident individuals or entities without the mediation of a permanent establishment in Spanish territory, who are residents in a State that has signed an agreement with Spain to avoid double taxation with an information exchange clause.