Taxation of Securities Transfers and Financial Transactions

Transmission of Securities

The revised text of section 93, as a taxable event, includes the transfer of publicly traded shares.

Taxable income is the market value, and the tax calculation uses a fixed scale. The Securities Market Law, enacted in 1988, established an exemption for property transfer purposes and also for VAT purposes concerning the transmission of values, including both listed and unlisted securities.

Loans

The traditional concept of a loan now includes promissory notes, bonds, and commercial obligations, currently termed financial assets.

The revised terms address personal loans where the basis is the capital of the obligation. Separately, it refers to a mortgage constituted as collateral for a loan, which is taxed as a loan, based on the taxable capital plus interest.

The borrower (who receives and must return the money) is designated as the taxpayer, with an expected tax rate of 1%.

It contradicts the principle of economic capacity for the borrower to be the taxpayer when the lender acquires the right to interest on the loan. However, Article 45 of the Revised Law currently establishes an exemption for the constitution of all loans.

Constitution of Mortgage

• The taxable event is the creation of the real right of mortgage.
• The taxpayer is the mortgagee.
• The tax rate is 1%.
• Taxable income is the capital plus interest.

We note that if a mortgage serves as collateral for a loan, it is taxed as a loan; therefore, in this specific case, the registration of mortgages is exempt from Transfer Tax and Stamp Duty (TPO).

II. Corporate Operations

Characteristics

Do not confuse corporate operations with income tax.

Corporate transactions comprise a set of tax concepts meeting two features:

1. The subjective element of the taxable event must be a partnership. We must distinguish between companies resident in Spanish territory, EU resident companies, and companies resident in third countries.
2. It refers to taxable operations within the configuration or structure of the societies.

Usually, these operations are formalized in a public deed.

The tax base aims to quantify the capital involved in the operation.

The tax rate is 1%.

Vesting occurs upon the formalization of the act subject to tax, ordinarily the day the deed is granted.

There is an incompatibility between corporate transactions and onerous capital transfers. Corporate operations relate to the structuring of the society, whereas VAT refers to the activity of the society.