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

Regulations: Articles 15 and 16 Wealth Tax Law

Shares and interests in the share capital or equity of legal entities, companies and investment funds are considered as such.

These securities, with the exception of shares and interests in Collective Investment Institutions, may be exempt from tax if the holder thereof meets the requirements established for this purpose and which are discussed in the section relating to exemptions in Chapter 2 of this manual. Whether or not they are exempt, these values must be included in the corresponding section of the declaration, being valued according to the following rules:

Remember: The concept of “organized markets” referred to in Article 15 of Law 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 interests in the share capital or in the equity fund of Collective Investment Institutions (Investment Companies and Funds), traded on organized markets

Shares and interests in the share capital or in the equity fund of Collective Investment Institutions traded on organized markets must be computed at their net asset value on the date of accrual of tax (December 31), valuing the assets included in the balance sheet in accordance with the rules included in their specific legislation and the obligations to third parties being deductible.

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

B. Shares and interests in the share capital or equity of any other legal entities, traded on organized markets

Shares and interests in the share capital or equity of any legal entities, traded on organized markets will be computed at their average trading value in the fourth quarter of each year .

For these purposes, the list of securities traded in trading venues, with their average trading value corresponding to the fourth quarter of 2023, for the purposes of the 2023 Wealth Tax return and the annual information return on securities, insurance and income is included in Order HAC /172/2024, of February 26 ( BOE of February 28).

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

In the case of capital increases pending disbursement, the valuation of the shares will be made in accordance with the previous rules, as if they were fully paid up, including the portion pending disbursement as debt of the taxpayer.

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

The valuation of shares and interests in the share capital or in the equity fund of Collective Investment Institutions not traded on organized 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 included in their specific legislation and the obligations to third parties being deductible.

D. Shares and interests in the share capital or equity of any other legal entities not traded on organized markets, including interests in the share capital of Cooperatives

Shares in the share capital of Cooperatives.

The valuation of the shares of the partners or associates in the share capital of the cooperatives will be determined based on the total amount of the social contributions paid , mandatory or voluntary, resulting from the last approved balance sheet, with deduction, where appropriate, of the unreimbursed social losses.
Share capital investments in other entities.

The valuation of the aforementioned shares and participations will be carried out according to the theoretical value resulting from the last approved balance sheet , provided that this, either compulsorily or voluntarily, has been subject to review and verification and the audit report is favorable .

In the event that the balance sheet has not been duly audited or the audit report is not favorable, the valuation will be made at the highest of the following three values:
1. Nominal value.
2. Theoretical value resulting from the last approved balance sheet.
  
  The Supreme Court rulings of 12 February and 14 February 2013, in accordance with a criterion "favorable to the best approach to the economic reality of the taxable base of the tax" interpret that the balance sheet approved within the legal period for the presentation of the self-assessment for the tax must be taken as a point of reference, so that "if the year being settled is approved on this date, even if this has occurred after the date of accrual, it must nevertheless be taken into account."
3. Value resulting from capitalizing at a rate of 20 percent the average of the entity's profits in the three fiscal years closed prior to the date of accrual of the tax (December 31). The profits will include distributed dividends and allocations to reserves, excluding those for regularization or updating of balance sheets.
  
  To calculate this capitalization, the following formula can be used:
  
  Value = [(B ₁+ B _{2 ##}+ B ₃) ÷ 3 ] x (100 ÷ twenty)
  
  Where: B ₁, B ₂and B ₃are the profits for each of the three fiscal years closed prior to the tax accrual date.

For the correct application of these valuation rules, entities are required to provide their partners, associates or participants with certificates containing the valuations of their respective shares and interests.