Previous issue: Rules for the valuation of assets acquired, located or deposited abroad

Before commenting on each of the legally established valuation criteria, it is appropriate to point out, as a previous point, the rules that must be used to assess the acquired, located or deposited assets abroad.

In the case of assets acquired, located or deposited abroad, to express their valuation in euros for the purposes of Wealth Tax, the following specific rules must be taken into account, where applicable:

1. Equity elements whose valuation rules address the acquisition value.

In the case of equity elements whose price, consideration or acquisition value is originally encrypted in currency other than the euro and is one of these figures for which they must be calculated for the purposes of this tax, the equivalent value in euros must be determined:

1. In the case of currencies other than those of the Member States of the European Union that have adopted the euro, depending on the exchange rate euro official corresponding to the date of accrual of the Tax published by the European Central Bank or, failing this, the last official exchange rate published previously. 

   See Bank of Spain Resolution of 31 December 2021, publishing the euro changes for the 31 of December 2021, published by the European Central Bank, which will be considered official changes, in accordance with the provisions of article 36 of Act 46/1998, of 17 December, on the Introduction of the Euro (Official State Gazette 04-01-2022). 

   If there is no official exchange rate, the market value of the monetary unit in question will be taken as a reference.

2. In the case of currencies of the Member States of the European Union that adopted the euro, depending on the irrevocably fixed conversion rates between the euro and the currency in question contained in Council Regulation (EC) No 2866/98 of 31 of December 1998 (DOCE of 31/12/98), taking into account for conversion and rounding up the established rules by Council Regulation (EC) No. 1103/97 of 17 June on certain provisions relating to the introduction of the euro.

2. Valuation of property located abroad.

In the case of real estate located abroad, they must be declared in this tax for the equivalent value in euros of the price, consideration or acquisition value, determined in accordance with the provisions of the previous rule 1.

3. Deposits in account in currency other than the euro.

Deposits in a checking or savings account, in the demand or in the term, will be calculated by the balance that they generate in the tax accrual date, unless the tax is lower than the average balance corresponding to the last quarter of the year, in which case the latter will be applied.

For these purposes, the average balance will be calculated in the currency in question, in accordance with the provisions of the article 12 of Act 19/1991, of 6 June, on Wealth Tax, which is then determined as equivalent in euros in accordance with Rule 1.

4. Securities traded on organised markets abroad.

There is no definition of "organized market" in the tax regulations or in the Spanish financial regulations on marketable securities.

However, in the financial field, it is usually referred to as "organized markets" in those markets where there is a set of rules and regulations that determine how they operate.

From this perspective, the concept of "organized market" is broader than that of "official secondary market" or "regulated market" as referred to in Article 43 (1) and (2) of the revised text of the Securities Market Act, approved by the Royal Decree legislative 4/2015, of 23 October, (Official State Gazette of 24), since, when it comes to shares or holdings in entities, it also includes so-called "multilateral trading systems," as markets with self-regulation that establish their structure and operating system.

With regard to multilateral trading systems, its definition must be sought in Article 4,1,21) of Directive 2014/65/EU, of the European Parliament and of the Council, of 15 May 2014 on the markets of financial instruments, which has:

"22)" Multilateral Trading System "(MTF): A multilateral system operated by an investment service company or by a market-leading body that allows it to meet-within the system and according to non-discretionary rules-the various purchase and sale interests on multi-third party financial instruments to give rise to contracts, in accordance with Title II of this Directive "

In accordance with the above, it can be stated that the concept of "organised markets" referred to in Article 15 of Act 19/1991 is broader than that of the official secondary market or regulated market and includes the so-called "multilateral trading systems."

This also follows from the inclusion in the Order that annually approves the list of securities traded with their average trading value corresponding to the fourth quarter, pursuant to the provisions of Articles 13 and 15 of the Wealth Tax Act, both of the shares that are traded on the Spanish stock exchange, as well as shares traded on the Alternative Stock Market (the Spanish multilateral trading system). The reasons for these orders are presented in the presentation of an equivalence between "organized markets" and "trading centers."

Based on the above, the concept "organised markets" is broader than that of the official secondary market or regulated market (the Stock Exchanges of securities) and includes the multilateral trading systems where securities are traded, taking into account the applicable regulations for these purposes in the place of the foreign country where the securities representing the holding in equity are located.

5. Securities representing the participation in foreign entities'own funds, not traded on organised markets.

In the case of shares and holdings in the share capital or in the equity of any type of foreign entity, not traded on markets organized by Spanish, to determine the value resulting from capitalizing the average profits of the three social years at the rate of 20 per 100 closed before the tax accrual date, the average of these profits will be calculated in the corresponding currency, and the equivalent value will then be determined in euros in accordance with Rule 1.