The holding by non-resident individuals in Spain of shareholdings in foreign companies that own, directly or indirectly, real estate located in Spain was untaxed by the Spanish Wealth Tax.

Although on specific occasions this criterion had not been accepted by the Tax Agency, the fact is that the Wealth Tax Law, as stated in Article 5, only makes assets and rights owned by non-residents taxable when they “were located, could be exercised or should be fulfilled in Spanish territory.”

And this non-taxation criterion for Spanish Wealth Tax of the holding (shame as above), which had already been applied by some jurisdictional bodies, has been very recently confirmed resoundingly by the Directorate General for Taxation in the Spanish Ministry of Economy and Finance by means of its binding consultation V1947-22, dated 27 September this year.

However, among the amendments tabled last 10 November by the Spanish Socialist Workers’ Party (PSOE) and Unidas Podemos – the parties that currently form the Spanish coalition Government – to modify the Legislative Proposal to the establishment of temporary energy and credit institution charges, is an amendment that aims to modify Article 5 of the Law 19/1991, on Wealth Tax, in order to tax the indirect (same as above) through foreign companies, adding the following to the aforementioned article:

  • For (same as above) representative securities of the shareholders’ equity of non-resident individuals in Spain in any type of entity, not traded on organised markets, whose asset consists, at least 50 per cent, directly or indirectly, of real estate located in Spanish territory, will be considered to be located in Spanish territory.
  • To calculate the assets of the entity, the net book values of all assets accounted shall be replaced by their respective market values as determined at the date on which the tax becomes chargeable. In the case of real estate, the net book values will be replaced by the values that must be used as the tax base in accordance with the provisions of Article 10 of the Wealth Tax Law itself, i.e., the higher among the cadastral value, the value checked by the administration for the purposes of other taxes, or the price, consideration acquisition value.

Although it is not known precisely yet, it is likely that this modification will come into force as soon as the new Law is published in the Official State Gazette (BOE), therefore it would affect the 2022 Wealth Tax, due on 31 December.



More information:

Lupicinio International Law Firm

C/ Villanueva 29
28001 Madrid
P: +34 91 436 00 90


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