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Form 100. Personal Income Tax Return Declaration 2017

7.3.3.3. Dividends and other income derived from participation in the equity of entities

This section will include the returns obtained from participation in the equity of any type of entity.

The following returns, whether monetary or in kind, are included in this category:

  1. Dividends, attendance bonuses at meetings and profit sharing from any type of entity.

  2. Income from any type of assets, except the delivery of paid-up shares, which, by statute or by decision of the corporate bodies, entitle one to participate in the profits, sales, operations, income or similar concepts of an entity for reasons other than the remuneration of personal work.

  3. The returns derived from the creation or transfer of rights or powers of use or enjoyment, whatever their name or nature, on the securities or shares that represent the participation in the entity's equity.

  4. Any other profit, other than the above, arising from an entity due to the status of partner, shareholder, associate or participant.

  5. The distribution of the premium on the issue of shares or interests and the reduction of capital for the purpose of repaying contributions (art. 33.3.a) Law). In these cases, the amount obtained will reduce, until it is cancelled, the acquisition value of the shares or interests affected and only the excess that, if applicable, will be taxed as income from movable capital. However, if the reduction in capital comes from undistributed profits, all amounts received will be taxed as movable capital (section 1 of article 25.1 a)), without the excess regime being applicable. For these purposes, capital reductions, whatever their purpose, shall be deemed to affect first and foremost the portion of share capital that does not come from undistributed profits, until they are cancelled.

  6. As of September 23, 2010, in the event of a capital reduction of variable capital investment companies for the purpose of repaying contributions, the amount of this or the normal market value of the assets or rights received, which will be classified as income from movable capital under article 25.1 a) of the Law, with the limit of the highest of the following amounts:

    • The increase in the net asset value of the shares from their acquisition or subscription until the time of the reduction of share capital.

    • When the capital reduction proceeds from undistributed profits, the amount of such profits. For these purposes, capital reductions, whatever their purpose, shall be deemed to affect first and foremost the portion of share capital that comes from undistributed profits, until their cancellation.

    Any excess over this limit will reduce the acquisition value of the affected shares until they are cancelled. In turn, any excess that may result will be integrated as income from movable capital from participation in the equity of any type of entity, in the manner provided for the distribution of the issue premium.

  7. The entire amount obtained from the distribution of the issue premium of shares in variable capital investment companies without applying the reduction in the acquisition value of the shares provided for in article 25.1 e) of the Law.

COMPLETION

The following information will be entered through a data capture window, which will normally appear in the certificate of returns provided by the bank holding the securities:

TYPE OF PERFORMANCE

The type of performance will be indicated by selecting one of the following keys:

Key 1: Dividends and profit shares to which the exemption of article 7(y) of the Tax Law applies.

Key 2: Other capital gains from participation in equity.

PERCEIVED INTEGRITY

The full amount received in the form of dividends or participation in profits from any type of entity will be recorded.

If the performance has been received in kind, the market value of the goods or services received must be computed as full income. The advance payment will be added to this value, unless its amount has been passed on to the recipient of the income.

WITHHOLDINGS

This section will include any withholdings made or payments on account made on dividends and other profit shares of entities. The program transfers these amounts to box 0559 on page 17 of the return.

ADMINISTRATION AND DEPOSIT EXPENSES FOR NEGOTIABLE SECURITIES (art. 25.1.a) Law)

To determine the net return, only the administration and deposit costs of negotiable securities will be deducted from the gross returns.

For these purposes, administration and deposit expenses are considered to be those amounts charged by investment services companies, credit institutions or other financial institutions that, in accordance with Law 24/1988, of July 28, on the Securities Market, have the purpose of remunerating the service derived from the performance on behalf of their holders of the service of deposit of securities represented in the form of certificates or the administration of securities represented in account entries.

Amounts representing consideration for discretionary and individual management of investment portfolios, where there is a disposition of investments made on behalf of the owners in accordance with the mandates conferred by them, will not be deductible.