This tax is levied on a limited number of transactions, including most notably:

TYPE OF TRANSACTION	APPLICABLE RATE
Corporate transactions, such as the formation of companies, and capital increases or reductions at companies, contributions made by shareholders that do not imply a capital increase, etc. (*).	1%
Transfers of real estate (**)	6%
Transfers of movable property and administrative concessions	4%
Certain rights in rem	1%
Certain public deeds (**)	0.5%

(*) Effective as of January 1, 2009, Law 4/2008 has eliminated the cases in which tax is levied on mergers, spin-offs, asset contributions and exchanges of securities, these transactions being defined in accordance with Aricles 83 and 94 of the Corporate Income Tax Law (Neutral tax regime).

(**) The regional governments are entitled to apply different rates in certain cases. Indeed, many of them have set the transfer tax rate applicable to transfers of real estate at 7%, and the stamp tax rate for certain transactions at 1.5%. Nevertheless, some regions apply 2%.

Transfers of shares in Spanish companies do not usually attract indirect taxation, unless more than 50% of the capital stock is transferred (or shares increasing the stake in certain entity when the acquirer already has more that 50%) and more than 50% of the assets of the company consist of real estate in Spain. In this case, the transaction will be treated, for indirect taxation purposes, as a transfer of real estate subject to the transfer tax rate determined by the regional government in question.

If the seller is a company or a private real estate developer, transfers of buildable land lots or first supplies of buildings are subject to VAT. In the case of second and subsequent supplies of buildings by companies, traders or professionals in the course of their usual activities, they can elect to make such supplies subject to transfer tax or VAT, so long as certain requirements are met.

 

For more information you can download the following document:

Tax system (1143kb.)

Prepared by Garrigues

Last updated: 17|02|2010