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2021 Wealth Tax practical guide.

7. Securities owned by non-residents

Regulations: Art. 4.Siete Wealth Tax Act

The securities belonging to non-residents whose returns are exempt under article 14 of the consolidated text of the Income Tax Act for Non-Residents, approved by Royal Legislative Decree 5/2004 of 5 March, are exempt.

In accordance with the provisions of article 14 of the revised text of the Non-Residents Income Tax Act, these will be exempt, among others:

  • Capital gains derived from movable assets obtained without the mediation of permanent establishment, by residents in another Member State of the European Union or another Member State of the European Economic Area or permanent establishments of these residents located in another Member State of the European Union or in another Member State of the European Economic Area.

    In the case of States that are part of the European Economic Area that are not Member States of the European Union, the above shall always apply there is an effective exchange of tax information under the terms set out in Additional Provision primera.4 of Act 36/2006 of 29 November on measures to prevent tax fraud.

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

    1. That the entity's assets consist primarily, directly or indirectly, in real estate located in Spanish territory.

    2. In the case of natural persons taxpayers, who, at some point before, during the period of 12 months prior to the transfer, the taxpayer has participated, directly or indirectly, in at least 25% of the capital or assets of the company. 100

    3. In the case of non-resident companies, the transfer does not meet the requirements for the application of the exemption provided for in article 21 of the Corporation Tax Act.

    Nor will the exemption be applicable in the case of capital gains obtained through countries or territories classified as non-cooperative jurisdiction.

Note: Note that Act 11/2021, of 9 July, on measures to prevent and combat tax fraud, transposition of Council Directive (EU) 2016/1164 of 12 July 2016, which they establish rules against tax avoidance practices that directly affect the operation of the internal market, the modification of various tax rules and on Regulation of the game (Official State Gazette of 10) has modified the first Additional Provision of Act 36/2006 of 29 November, on measures to prevent tax fraud, to introduce the definition of country and territory that are considered to be a non-cooperative jurisdiction that replaces the tax haven, cancellation or zero taxation and effective exchange of tax information.

It also establishes that references made to tax havens, countries or territories with which there is no effective exchange of information, or zero or low taxation, shall be understood to be made in the definition of non-cooperative jurisdiction of the First Additional Provision of this Act.

  • The returns derived from government debt, obtained without the mediation of a permanent establishment in Spain.

  • Income derived from securities issued in Spain by natural persons or non-resident entities without permanent establishment, regardless of the place of residence of financial institutions acting as payment agents or measuring in the issuance or transfer of securities.

    However, when the holder of the securities is a permanent establishment in Spanish territory, the incomes referred to in the previous paragraph will be subject to this tax and, where applicable, to the account withholding system, which will be carried out by the resident financial institution acting as the depository of the securities.

  • Income derived from the transfer of securities or the reimbursement of investments in investment funds made in any of the official secondary securities markets Spanish, obtained by natural persons or non-resident entities without permanent establishment in Spanish territory, who are residents of a State that has subscribed with Spain, an agreement to avoid double taxation with an information exchange clause.