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 pursuant to the provisions of article 14 of the consolidated text of the Non-Resident Income Tax Law, approved by the 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 in another Member State of the European Economic Area or by permanent establishments of said residents located in another Member State of the European Union or in another State that is part 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 will apply as long as there is an effective exchange of tax information in the terms provided for in Additional Provision 1.4 of Law 36. /2006, of November 29, on measures for the prevention of tax fraud.

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.
The aforementioned exemption will also not apply in the case of capital gains obtained through countries or territories classified as non-cooperative jurisdictions.

Note: Please note that Law 11/2021, of July 9, on measures to prevent and combat tax fraud, transposing Council Directive ( EU ) 2016/1164 , of July 12, 2016, which establishes rules against tax avoidance practices that directly affect the functioning of the internal market, modifying various tax rules and regulations on gambling ( BOE of 10) has modified the first Additional Provision of Law 36/2006, of November 29, on measures for the prevention of tax fraud, to introduce the definition of country and territory that are considered non-cooperative jurisdiction which replaces the tax haven, low or no taxation and effective exchange of tax information.

Likewise, it establishes that the references made in the regulations to tax havens, to countries or territories with which there is no effective exchange of information, or of zero or low taxation, will be understood to be made to the definition of non-cooperative jurisdiction of the first Additional Provision of this law.

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.