Corporate Transactions: Taxable Events and Exemptions
Operations Subject to Tax
A) Constitution of Society
The taxable event is the constitution of the society.
Taxable income is the nominal amount of social capital (K).
Tax rate: 1%
Taxpayer: A corporation incorporated.
B) Increase in Capital
The taxable event is the increased capital of the company.
The tax base is the nominal amount of expanded capital (K).
Tax rate: 1%
Taxpayer is a company whose capital (K) expands.
C) Capital Contribution
The taxable event is the contribution that does not increase the share capital. For example, to replace losses.
The tax base is the net value of the contribution, i.e., the value of the assets transferred less the debts borne by the society.
Tax rate: 1%
Contributor: The company receiving the contribution.
D) Dissolution of Company and Reduction of Capital
The taxable event is the dissolution or reduction of capital.
The tax base is the real value of the goods delivered.
The tax rate: 1%
Attention must be paid to taxpayers who are the partners for the goods received.
No taxable event takes place when goods are not delivered to partners.
We distinguish this case from the case of transfer of shares, which is a capital transfer case subject to onerous terms.
Finally, placing a group of companies does not exclude the possibility that the Company will make the place a capital taxable in another host society. Thus, a subsidiary will be the taxpayer.
Exempt Transactions
Among the cases of non-liability of the tax on corporate transactions, we have 3 cases:
- The restructuring of business operations (Merger, division of assets, and exchanges of securities).
- The change of activity. For example, a real estate company will change to the energy sector.
- The transformation of companies (from SL to SA).
These cases of non-liability may be taxed as stamp duty in the form of notarized documents.
Taxable Subjective Element
The subjective element indicates who is responsible for the event and is usually required to pay tax (but not always).
We must distinguish between a company resident in Spanish territory, a company resident in the EU, and a company resident in a third state.
In the language of EU law, third states are those non-EU countries.
A) Resident Companies in Spain
We have to distinguish the address and domicile of the company.
If the e-society is on Spanish territory, then the society does the taxable event when making taxable supplies.
If the address is in Spanish territory, but the domicile is in another EU country, then for the taxable event, it is necessary that the State of the domicile not have a major operation with a similar tax.
B) Companies Resident in the EU
We have to distinguish whether the company has a permanent establishment on Spanish territory or not.
If the company works through a permanent establishment on Spanish territory, then it is NOT subject to corporate transactions.
If the society does not have a permanent establishment on Spanish territory, for the taxable event, it is necessary for its traffic operations to be conducted in Spanish territory and the state community and the home address NOT have a similar tax.
(Will pay if France does not have a tax similar to Spain to avoid paying twice)
Permanent establishment: A workplace that is subordinate to a central office, which is usually located abroad. Thus, a branch in Spain of a foreign multinational company.