Specialties for change of residence to other States of the European Union or the European Economic Area

Regulations: Art. 123 Regulation

When the change of residence occurs to another Member State of the European Union, or of the European Economic Area with which there is an effective exchange of tax information, in the terms provided for in section 4 of the First Additional Provision of Law 36/2006, of November 29 , on measures for the prevention of tax fraud, the taxpayer may choose to apply the following specialties to capital gains:

a) The capital gain must only be subject to self-assessment when, within the period of ten years following the last one that must be declared for the Personal Income Tax any of the following circumstances occur :

1. That shares or interests be transmitted inter vivos.
2. That the taxpayer loses the status of resident in a Member State of the European Union or the European Economic Area.
3. That the communication obligation referred to in letter c) of this section is not fulfilled.

The capital gain will be imputed to the last tax period that must be declared for the IRPF , carrying out, where appropriate, a supplementary self-assessment, without penalty or late payment interest or any surcharge.

The self-assessment must be submitted within the period between the date on which any of the aforementioned circumstances occur and the end of the immediately following tax declaration period or within the tax declaration period corresponding to the first fiscal year in which the taxpayer did not have such status as a result of the change of residence, if this were later.

b) In the event that the shares or participations referred to in number 1 of letter a) above are transferred inter vivos within the period of ten financial years following the change of residence, the amount of the capital gain will be reduced by the positive difference between the market value of the shares or participations and their transfer value .

For these purposes, the transfer value will be increased by the amount of the distributed profits or any other receipts that would have determined a reduction in the net assets of the entity after the loss of taxpayer status, unless such receipts were taxed by the Non-Resident Income Tax.

c) The taxpayer must notify the tax authorities of the option to apply the special features referred to in the previous letters, the capital gain made manifest, the State to which he/she transfers his/her residence, indicating the address, as well as subsequent variations, and the maintenance of the ownership of the shares or interests.

d) If the ten-year period elapses without any of the circumstances provided for in letter a) of this section having occurred, it will not be necessary to self-assess the gain .

Exercising the option to apply the specialties

The option for the application of the above specialties will be exercised by the taxpayer by means of communication to the Tax Administration through form 113, approved by Order HAP /2835/2015, of December 28 ( BOE of the 30th) in which the following data will be stated, among others:

• Identification of the shares or interests that give rise to capital gains due to change of residence.
• Market value of shares or interests.
• State to which residence is transferred, indicating the address, as well as any subsequent changes in address.

The communication must be submitted within the period between the date of the move and the end date of the IRPF declaration period the first fiscal year in which the taxpayer did not have such status as result of the change of residence.