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2021 Wealth Tax practical guide.

11. Administrative concessions

Regulations: Art. 21 Wealth Tax Act

The assessment of administrative concessions for the operation of services or public ownership or property, regardless of their duration, must be carried out applying the criteria set out in article 13 of the revised text of the Property Transfer Tax Act and Stamp Duty, approved by Royal Legislative Decree 1/1993 of 24 September (Official State Gazette of 20 October).

General valuation rules:

In accordance with the provisions of that article and as a general rule, the value of the concession will be determined by the application of the rule or rules that, in view of the nature of the obligations imposed on the concessionaire, are applicable to those indicated below:

  1. When the Administration indicates a total amount as a price or fee, which the concessionaire must pay for the amount of the fee.

  2. When the Administration indicates a fee, price, share or minimum benefit that the concessionaire must pay periodically, two cases must be distinguished:

    If the duration of the concession is not more than one year, for the total sum of the periodic benefits.

    If the duration of the concession is greater than one year, capitalizing on 10 per 100 the annual amount paid by the concessionaire.

    When the application of this rule requires the capital of an annual amount that is variable as a result, exclusively, of the application of price review clauses, which take as a reference objective indices of their evolution, the corresponding figure for the first year will be capitalised. If the variation depends on other circumstances, whose mathematical reason is known at the time of the granting of the concession, the amount to be capitalized will be the annual average of those that the concessionaire must pay during the life of the concession.

  3. When the concessionaire is obliged to reverse certain assets to the Administration, the estimated net book value of these assets will be calculated at the date of the reversal, plus the expected expenses for the reversal. The tables of depreciation approved for the purposes of Corporation Tax will be applied to calculate the net book value of the assets in the average percentage resulting from them.

Special valuation rules:

In special cases where, due to the nature of the concession, the value cannot be fixed by the rules set out above, this will be determined in accordance with the following rules:

  1. Applying a percentage of 2 per 100 to the value of the fixed assets used for the operation, use or use in question each year of the concession's duration, with a minimum of 10 per 100 and without the maximum being able to exceed the value of the assets.

  2. In the absence of the above valuation, the amount indicated by the respective Public Administration will be taken.

  3. In the absence of the two above rules, for the value declared by the interested parties, without prejudice to the right of the Administration to proceed with its verification by the means provided for in the General Tax Law.