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Form 200. Corporate Income Tax Declaration 2019

8.2.3 Transferred assets that give the right to deduction

The assets transferred, likely to generate income that constitutes the basis of this deduction, are the following:

  • Those that have belonged to tangible or intangible fixed assets or real estate investments related to economic activities that have been in operation for at least one year within the three years prior to the transfer.

  • Securities representing participation in the capital or equity of all types of entities that grant a stake of no less than 5 percent of their capital and that have been held for at least one year prior to the date of transfer, provided that these are not dissolution or liquidation operations of these entities. The calculation of the transferred share will refer to the tax period.

    For the purposes of calculating the period of possession, the securities transferred shall be deemed to have been the oldest.

    When the transferred securities correspond to entities that have assets not assigned to economic activities, according to the balance sheet of the last closed fiscal year, in a percentage greater than 15 percent of the assets, the deduction will not be applied on the part of income obtained in the transfer that corresponds in proportion to the percentage obtained. This percentage will be calculated on the consolidated balance sheet if the securities transferred represent a share in the capital of a parent entity of a group according to the criteria established in article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts, which will include multi-group and associated entities in accordance with commercial legislation. However, the taxpayer may determine this percentage based on the market values of the items that make up the balance sheet.

    Non-affected elements shall be considered to be direct or indirect participations in the entities referred to in section 4 of this article and the assets that constitute the assets of the same, if they form part of the group referred to in the previous paragraph. Those elements that meet the conditions established in numbers 1 and 2 of paragraph a) of article 4.Eight.Two of Law 19/1991, of June 6, on the Wealth Tax, will be counted as affected elements.

    The following values shall not be deemed to be included within the values of this letter b):

    • a') That they do not grant a share in the share capital or equity.

    • b') They represent participation in the share capital or equity of entities not resident in Spanish territory whose income cannot be eligible for the exemption established in article 21 of RDLeg . 4/2004.

    • c') They are representatives of collective investment institutions of a financial nature.

    • d') They are representatives of entities whose main activity is the management of movable or immovable assets in accordance with the terms set forth in article 4.Eight.Two of Law 19/1991, of June 6, on the Wealth Tax.

Assets subject to reinvestment

The assets in which the amount obtained from the transfer that generates the income subject to the deduction must be reinvested are the following:

  1. Those belonging to tangible or intangible fixed assets or real estate investments related to economic activities whose entry into operation takes place within the reinvestment period.

  2. Securities representing participation in the capital or equity of all types of entities that grant a stake of no less than 5 percent in the share capital of the latter. The calculation of the acquired participation will refer to the period established for making the reinvestment. These values may not generate any other tax incentive at the level of taxable base or total rate. For these purposes, value corrections and exemptions referred to in article 21 of the Royal Decree-Law will not be considered a tax incentive. 4/2004, nor deductions to avoid double taxation.

    When the securities in which the reinvestment is made correspond to entities that have assets not affected by economic activities, according to the balance sheet of the last closed financial year, in a percentage greater than 15 percent of the assets, the reinvestment will not be deemed to have been made in the amount resulting from applying the percentage obtained to the purchase price of those securities. This percentage will be calculated on the consolidated balance sheet if the securities acquired represent a stake in the capital of a parent entity of a group according to the criteria established in article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts, which will include multi-group and associated entities in accordance with commercial legislation. However, the taxpayer may determine this percentage based on the market values of the items included in the balance sheet.

    The following shall be considered unaffected elements: direct or indirect participations in the entities referred to in section 4 of article 42 of the Royal Decree-Law. 4/2004 and the assets that constitute their assets, if they form part of the group referred to in the previous paragraph. Those elements that meet the conditions established in numbers 1 and 2 of paragraph a) of article 4.Eight.Two of Law 19/1991, of June 6, on the Wealth Tax, will be counted as affected elements.

    The values of this letter b) shall not be deemed to include those referred to in letters a'), b'), c') and d') above.

The reinvestment will not be deemed to have been carried out when the acquisition is made through operations carried out between entities of the same group within the meaning of article 16 of the LIS under the special regime established in chapter VII of title VII of the RDLeg. 4/2004.

Nor will the reinvestment be deemed to have been made when the acquisition is made from another entity of the same group within the meaning of article 18 of the RDLeg. 4/2004, except in the case of new elements of tangible fixed assets or real estate investments.