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21% and to Stamp Duty at rates which range between 0.5%
and 2.5%.
• The above notwithstanding, if the transaction entails a
transfer of an independent business unit (i.e. a group of assets
capable of operating independently such as, for example, a
hotel – where not only the hotel building is acquired but also
the hotel operations), the transaction will not be subject to
VAT and Transfer Tax will apply at rates ranging between 6%
and 11%. As opposed to VAT exempt transactions, please
note that there is no possibility to make a waiver and avoid
Transfer Tax.
Share deal
• Transfers of shares are generally exempt from indirect taxes
(i.e. VAT, Transfer Tax and Stamp Duty). Please note that
until October 2012, in case of acquisitions of stakes of control
in companies whose assets were mainly composed of real
estate assets, the acquirer was liable for Transfer Tax which
was triggered on the value of the underlying real estate
(and proportionally to the stake that was being acquired).
This notwithstanding said regime has now been changed.
Currently, indirect taxes would only apply where the parties
have intended to evade payment of taxes that would have
been due on the transfer of the underlying properties and
it is presumed that this is the case where the underlying
properties are not business assets.
SPANISH REAL ESTATE
INVESTMENT COMPANIES
• Please note that Spanish legislation provides for a special tax
regime for listed companies whose main corporate purpose is
the direct or indirect acquisition of urban real estate assets for
its subsequent lease («SOCIMI», which are structures similar
to the Real Estate Investment Trusts established in other
jurisdictions).
• SOCIMIs are listed public limited companies that must
comply with certain requirements, among others, a
determined corporate purpose, a minimum share capital of
5 million Euros, etc.
Investment requirements
• SOCIMIs must have invested at least 80% of the value of
their assets in (i) urban real estate assets to lease, (ii) land
for the development of real estate assets that will be used for
that purpose, provided that development work starts within
three years of the acquisition of the land, (iii) stakes in the
share capital or equity of companies that qualify as suitable
investments (non-resident REITs or SOCIMIs, unlisted
SOCIMIs, non-resident unlisted entities that are wholly
owned by SOCIMIs or REITs, and IICIs).
• At least 80% of the income generated during each tax year
(excluding the income from the sale of shares and real estate
assets attached to the corporate purpose of the SOCIMI
once the minimum term for holding them has expired), must
originate from the lease of real estate assets connected to the
fulfilment of the corporate purpose; or from dividends or the
participation in profits originating from shares, all connected
to the fulfilment of the corporate purpose.
Dividend distribution policy
• SOCIMIs must distribute dividends to their shareholders
from the profits generated over the course of the year. Those
dividends must be paid within six months of the end of the
year as follows:
–– 100% of the profits from dividends or shares in the profits
of companies that qualify as suitable investments;
–– at least 50% of profits from the transfer of real estate
assets and stakes in companies that qualify as suitable
investments. All other profits must be reinvested within
three months of the transfer date in other real estate
assets or holdings connected to the performance of its
corporate purpose;
–– at least 80% of the remaining profits generated.
Special tax regime applicable to SOCIMIs
• CIT: As a general rule, SOCIMs would be subject to CIT at
the rate of 0% on the income derived from their corporate
purpose, provided certain requirements are complied with
(e.g. maintenance of the investments). This notwithstanding,
SOCIMIs would be subject to CIT at the rate of 19% (rather
than the 0% indicated above) on dividends distributed to
shareholders which hold a stake in the SOCIMI equal to or
higher to 5%, when those dividends are tax exempt or are
taxed at a rate lower than 10% at a shareholder level.
• Withholdings on account of NRIT: Dividends distributed by
the SOCIMI would be subject to withholdings on account
of NRIT at the rate of 20% in year 2015 and 19% in year
2016 unless otherwise provided in domestic legislation or
applicable tax treaty. Please refer to section 3 above.
• Transfer Tax and Stamp Duty: As a general rule, SOCIMIs
benefit from a 95% tax credit on Spanish Transfer Tax and
Stamp Duty on the acquisition of housing acquired to let or
land is acquired to develop housing to let. However, certain
requirements should be complied with.
Costs
• The parties would need to pay notary and registration fees.
LEASES
Legal regime
• Lease agreements signed over real estate properties as from 1
January 1995 are governed by the Spanish Urban Leases Act
of 1994, currently in force, with the latest modifications arise
from the Law 4/2013, 4 June. This Act distinguishes between
two different kinds of leases: leases for residential use –signed
over a habitable construction the fundamental use of which
is to act as the lessee’s permanent home– and leases for non-
residential use –when the construction is to be used other
than for residential uses.
• Lease agreements for non-residential use are governed
by the provisions of the agreements reached between the
parties (completely valid unless they are unlawful, immoral
or contrary to public policy); in the absence of an agreement,
the provisions of the Spanish Urban Leases Act will apply and,
subsequently, the provisions of the Spanish Civil Code.
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