Modifications in relation to SICAVs
With effect for tax periods beginning on or after 1 January 2022, Law 11/2021 of 9 July on measures to prevent and combat tax fraud introduces the following changes to the LIS in relation to the SICAV :
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Letter a) of article 29.4 of the LIS is modified to establish additional requirements partners must meet so that SICAVs can apply the 1 percent tax rate:
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Minimum number of shareholders
Only those shareholders who hold shares for an amount equal to or greater than 2,500 euros determined in accordance with the net asset value corresponding to the date of acquisition of the shares will be counted.
In the case of variable capital investment companies by compartments, only those shareholders who hold shares for an amount equal to or greater than 12,500 euros will be counted, determined according to the net asset value corresponding to the date of acquisition of the shares.
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Permanence of shareholders
The minimum number of shareholders determined as provided in letter a) above must be present during the number of days that represents at least three quarters of the tax period.
The rules set out in letters a) and b) above shall not apply to free investment companies or to companies whose shareholders are exclusively other free investment collective investment institutions, or to listed variable capital index investment companies.
Compliance with these rules may be verified by the authorities so the investment company must maintain and retain the data corresponding to the partners' investment in the company during the limitation period.
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In relation to the modification mentioned in the previous point, the forty-first transitional provision of the LIS is added to establish a transitional regime for SICAVs that agree to their dissolution and liquidation, which aims to allow their partners to transfer their investment to other collective investment institutions that meet the requirements to maintain the 1 percent tax rate on Corporate Tax.
For these purposes, the forty-first transitional provision of the LIS establishes that may agree to their dissolution and liquidation , with application of the tax regime provided for in this transitional provision, variable capital investment companies that:
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In the last tax period beginning before January 1, 2022, they were paying corporate tax at the reduced tax rate of 1 percent , under the terms provided for in article 29.4 a) of the LIS in its version in force as of December 31, 2021.
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During the year 2022, validly adopt the dissolution agreement with liquidation . The deadline for adopting this agreement therefore begins on 1 January 2022 and ends on 31 December 2022.
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Subsequent to the agreement, within six months after the deadline for adopting said agreement (December 31, 2022), carry out all the necessary legal acts or transactions according to commercial regulations until the registration cancellation of the company in liquidation. Therefore, the period for carrying out all the legal acts and transactions necessary to liquidate the company until its registration cancellation ends on June 30, 2023, although nothing prevents said operations from being concluded within the year 2022.
The dissolution with liquidation of SICAVs carried out in accordance with the forty-first transitional provision of the LIS will have the following tax regime:
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During tax periods beginning on or after January 1, 2022 and ending up until the registration cancellation, the SICAV in liquidation will continue to pay taxes at the reduced tax rate of 1 percent, provided that the number of shareholders is equal to or greater than 100, regardless of the purchase price of their shares in the SICAV.
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The partners of the SICAV in liquidation will not include in their tax base the income derived from the liquidation of the company, provided that they reinvest all of the money or assets (a partial reinvestment is not possible) that corresponds to them as a liquidation quota in the acquisition or subscription of shares or participations in one or more collective investment institutions provided for in letters a) or b) of article 29.4 of the LIS. The new shares or interests acquired or subscribed will retain the value and date of acquisition of the shares of the company subject to liquidation.
The reinvestment must be made before seven months have elapsed from the end of the period established to validly adopt the resolution of dissolution with liquidation of the SICAV (December 31, 2022), so the deadline to make the reinvestment ends on July 31, 2023, although nothing prevents said reinvestment from being carried out within the year 2022.
Partner must inform the company in liquidation of his decision to accept reinvestment, in which case the entity in liquidation will refrain from making any payment of money or delivery of goods to the partner that corresponds to him as a liquidation share. In addition, the partner must provide the company with documentation proving the date and value of acquisition of the shares, in the event that the company does not have such information.
In addition, the partner will communicate to the collective investment institution in which he will make the reinvestment his own identification data, those corresponding to the company in liquidation and its management entity and depositary entity, as well as the amount of money or assets comprising the liquidation quota to be reinvested in the destination institution. For these purposes, the partner will complete the corresponding subscription or acquisition order , authorizing said institution to process said order before the company in liquidation.
Once the order has been received by the company in liquidation, the reinvestment must be carried out by means of the transfer ordered by the latter to its depositary, on behalf of and by order of the partner, of the money or assets subject to reinvestment, from the accounts of the company in liquidation to the accounts of the collective investment institution in which the reinvestment is to be carried out. Such transfer shall be accompanied by information regarding the values and dates of acquisition of the shares of the company in liquidation to which the reinvestment corresponds.
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When the partner opts for the reinvestment regime provided for in letter c) of section 2 of the forty-first transitional provision of the LIS, there will be no obligation to make payments on account of the corresponding personal tax of the partner on the income derived from the liquidations of the SICAV.
This tax regime will not be applicable to cases of dissolution with liquidation of free investment companies, or of listed variable capital index investment companies.
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