5. Securities representing the participation in equity of any type of entity

Regulations: Articles 15 And 16 Wealth Tax Act

The shares and holdings in the share capital or own funds of legal entities, companies and investment funds are considered.

These securities, with the exception of shares and holdings in Collective Investment Institutions, may be exempt from the tax if the holder of the they meet the requirements established for this purpose and are discussed in the section on exemptions in Chapter 2 of this Manual. Whether or not they are exempt, these values must be included in the corresponding section of the tax return, and valued in accordance with the following rules:

Remember: The concept of "organized 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, such as the Alternative Stock Market.

A. Shares and holdings in the share capital or equity fund of Collective Investment Institutions (Companies and Investment Funds), traded on organised markets

Shares and holdings in the share capital or equity fund of Collective Investment Institutions traded on organised markets must be included for its net asset value at the tax accrual date (31 December), assessing the assets included in the balance sheet in accordance with the rules set out in its specific legislation and the obligations to third parties are deductible.

To facilitate the correct application of this valuation rule, the entities are obliged to provide their partners, associates or participants with a certificate stating the valuation of their respective shares and holdings.

B. Shares and holdings in the share capital or in the equity of any other legal entity, traded on organised markets

Shares and holdings in the share capital or equity of any legal entity, traded on organised markets will be calculated at their average trading value in the fourth quarter of each year.

For these purposes, the list of securities traded on organised markets, with their average trading value for the fourth quarter of 2021, at effects of the 2021 Wealth Tax return and the annual informative tax return on securities, insurance and income are set out in order HFP/115/2022, of 23 February (Official State Gazette of 25-correction of errors BOE 24 March).

Important: when it comes to subscribing new shares not yet admitted to official trading, issued by legal entities that are listed on organised markets, the value of these shares will be that of the last trading of old securities within the subscription period.

In the event of capital increases pending disbursement, the valuation of the shares will be carried out in accordance with the previous rules, as if they were fully paid, including the outstanding portion as the liability debt.

C. Shares and holdings in the share capital or equity fund of Collective Investment Institutions (Companies and Investment Funds), not traded on organised markets

The valuation of shares and holdings in the share capital or equity fund of Collective Investment Institutions not traded on organised markets will be carried out by their net asset value on the date of accrual of the tax , valuing the assets included in the balance sheet in accordance with the rules set out in its specific legislation and the obligations to third parties are deductible.

D. Actions and investments in the share capital or equity of any other legal entities not traded on organised markets, including holdings in the share capital of Cooperatives

Investments in the share capital of Cooperatives

The valuation of the shareholders or associates'holdings in the share capital of the cooperatives will be determined according to the total amount of the paid social contributions , compulsory or voluntary, resulting from the last approved balance sheet, with deduction, if applicable, of non-consolidated social losses.
Investments in the share capital of other entities

The aforementioned shares and holdings will be valued according to the theoretical value resulting from the last approved balance sheet, provided that either mandatory or voluntary, it has been subject to review and verification and the audit report is favourable.

If the balance sheet has not been properly audited or the audit report is not favourable, the valuation will be carried out at the highest value of the following three:
1. Nominal value.
2. Theoretical value resulting from the last approved balance sheet.
  
  The Sentences of the Supreme Court of 12 February and 14 February 2013, in response to a criterion "favourable to the best approach to the economic reality of the tax base, "they interpret that the approved balance sheet must be taken as a reference point within the legal period for filing the self-assessment for the tax, so that "if on this date the tax is approved, even if this has happened after the accrual date, however, it must be taken into account. "
3. Value resulting from capitalizing the average profits of the company at the rate of 20 per 100 in the three financial years closed before the date of accrual of the Tax (31 December). The profits will include dividends distributed and allocations to reserves, excluding those relating to regularization or updating of balance sheets.
  
  The following formula can be used to calculate this capitalisation:
  
  Value = [(B ₁ + B ₂ + B ₃) 3] x (100 ÷ 20)
  
  Where: B ₁, B ₂ and B ₃ are the profits of each of the three financial years closed before the accrual date of the Tax.

In order to correctly apply these valuation rules, the entities are obliged to supply their partners, associates or participants with certificates containing the valuations of their respective shares and holdings.