Information note on the completion of form 187 of the operations related to the transitional regime applicable to SICAVs (DT 41ª LIS)

IMPORTANT: The modifications reported regarding model 187 correspond to the modifications published in Order HFP/823/2022, of August 24, which approves model 345 of "Informative Declaration. Plans, pension funds and alternative systems. Friendly Societies, Insured Pension Plans, Individual Systematic Savings Plans, Company Savings Plans and Dependency Insurance. Annual declaration of participants, contributions and contributions" and establishes the conditions and procedure for its presentation, and modifies Order HAP/1608/2014, of September 4, which approves model 187 of "Informative declaration. Shares and participations representing the capital or assets of Collective Investment Institutions and annual summary of withholdings and payments on account of personal income tax, corporate income tax and non-personal income tax in relation to income or capital gains obtained as a result of transfers or reimbursements of such shares and participations and subscription rights." (BOE 29 August) and will be applicable to the informative reports for the year 2022 to be submitted in 2023. 

• PRELIMINARY CONSIDERATIONS: TRANSITIONAL REGIME APPLICABLE TO SICAVS IN THE EVENT OF DISSOLUTION AND LIQUIDATION as a result of the NEW TAX REGIME for SICAVs.

  Law 11/2021, of July 9, on measures to prevent and combat tax fraud, establishes a new tax regime for variable capital investment companies (SICAV) by establishing additional requirements for these companies to be able to apply the 1 percent tax rate. This change in the tax regime is accompanied by a transitional regime for SICAVs that agree to their dissolution and liquidation, which aims to allow their partners to transfer their investments to other collective investment institutions that meet the requirements to maintain the 1 percent corporate tax rate.

  The transitional regime applicable to SICAVs in the event of dissolution and liquidation is included in the new forty-first transitional provision of Law 27/2014, of November 27, on Corporate Income Tax (DT 41 LIS). This provision states the following:

  1. Variable capital investment companies to which the provisions of letter a) of section 4 of article 29 of this Law, in its version in force on 31 December 2021, have been applicable, which during 2022 validly adopt the dissolution with liquidation agreement, and carry out, after the agreement, within six months after said period, all the necessary legal acts or transactions according to commercial regulations until the company in liquidation is cancelled from the registry, may agree to their dissolution and liquidation, with application of the tax regime provided for in this transitional provision.

  2. The dissolution with liquidation of variable capital investment companies carried out in accordance with the provisions of section 1 above will have the following tax regime:

     1. Exemption from the Tax on Property Transfers and Documented Legal Acts, concept "corporate operations", taxable event, "dissolution of companies", of article 19.1.1. ° of the consolidated text of the Tax Law, approved by Royal Legislative Decree 1/1993, of September 24.

     2. During the tax periods ending up until the registration cancellation, the provisions of letter a) of section 4 of article 29 of this Law in its version in force on December 31, 2021, will continue to apply to the company in liquidation.

     3. For the purposes of Personal Income Tax, Corporation Tax or Non-Resident Income Tax, the shareholders of a company in liquidation shall not include in the tax base the income derived from the liquidation of the entity, provided that all the money or assets corresponding to them as a liquidation share are reinvested, in the manner and under the conditions set out in the following paragraphs, in the acquisition or subscription of shares or participations in any of the collective investment institutions provided for in letters a) or b) of section 4 of article 29 of this Law, in which case the new shares or participations acquired or subscribed shall retain the value and date of acquisition of the shares of the company subject to liquidation.

        The partner must inform the company in liquidation of his decision to comply with the provisions of the previous paragraph of this letter c), 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. Likewise, 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.

        The reinvestment must be for all the money or assets that make up the partner's liquidation share, with partial reinvestment not being possible, and it may be carried out in one or more collective investment institutions.

        The partner will inform the collective investment institution in which he/she will make the reinvestment of his/her 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 a transfer ordered by the latter to its depositary, on behalf of and at the 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.

        In order for the treatment provided for in the first paragraph of this letter c) to apply, the reinvestment must be carried out before seven months have elapsed from the end of the period established in section 1 above for the adoption of the dissolution with liquidation agreement.

     4. The acquisitions of securities referred to in Law 5/2020, of October 15, on the Tax on Financial Transactions, which take place as a result of the provisions of sections 1 and 2 of this transitional provision, provided that the reinvestment is carried out in accordance with the provisions of letter c) of this section, will be exempt from the Tax on Financial Transactions.

        The right to apply the provisions of the preceding paragraph shall be accredited by the subscription or acquisition order referred to in the fourth paragraph of letter c) of this section and, provisionally until the provision of said order, by the agreements of dissolution of the company and of division between the partners of the resulting assets, as well as by the communication of the partner referred to in the second paragraph of the aforementioned letter c).

  3. 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 variable capital investment companies referred to in this transitional provision, when the partners opt for the application of the reinvestment regime regulated in letter c) of section 2 above.

  4. The provisions of this transitional provision shall not apply in the event of dissolution with liquidation of free investment companies referred to in article 33 bis of Law 35/2003, of November 4, on Collective Investment Institutions, or of listed variable capital index investment companies referred to in article 79 of the Regulation implementing Law 35/2003, of November 4, on collective investment institutions, approved by Royal Decree 1082/2012, of July 13.

• MODIFICATIONS / IMPLICATIONS IN THE INFORMATION DECLARATION MODEL 187

  As a consequence of this transitional regime and its tax implications, they are introduced in the model 187 , "Informative Declaration. Shares and participations representing the capital or assets of collective investment institutions and annual summary of withholdings and payments on account of personal income tax, corporate income tax and non-personal income tax in relation to income or capital gains obtained as a result of transfers or reimbursements of such shares and participations and subscription rights” , a series of modifications that aim to identify the operations carried out under the transitional regime regulated in the forty-first transitional provision of Law 27/2014, of November 27, on Corporate Tax (DT 41 LIS), introduced by Law 11/2021, of July 9, on measures to prevent and combat tax fraud.

  This transitional regime allows the partners of SICAVs that choose to dissolve (because they do not meet the requirements to continue paying 1% corporate tax) to benefit from a deferral regime for the income made manifest at the time of the dissolution and liquidation of the SICAV.

  Specifically, the following changes are introduced in the registration designs of model 187:

  1. A new field called “IDENTIFICATION OF THE COMPANY IN LIQUIDATION OR LIQUIDATED” is created. This field should only be completed when reporting the acquisition or subscription operation described in the “TYPE OF OPERATION” field, with code “R”.

  2. Two new keys are incorporated in the “TYPE OF OPERATION” field:

     A: Acquisitions or subscription of shares or interests in collective investment institutions provided for in letters a) or b) of section 4 of article 29 of Law 27/2014, of November 27, on Corporate Income Tax, which are reinvestment of the liquidation quota of the SICAV for which it is not appropriate to integrate into the tax base the income derived from the liquidation of the entity, by application of the regime regulated in letter c) of section 2 of the forty-first transitional provision of the same Law.

     T: Transfer (cancellation) resulting from the liquidation of variable capital investment companies covered by the forty-first transitional provision of Law 27/2014, of November 27, on Corporate Tax, in which, by application of the reinvestment regime regulated in letter c) of its section 2, it is not appropriate to integrate into the tax base the income derived from the liquidation of the entity.

     Regarding these keys, the following is reported:

     • The “T” code must be completed in the year in which the general shareholders’ meeting is held in which the dissolution and liquidation of the SICAV is agreed, as well as the draft division of the company assets resulting from said liquidation, even if the deed in which said operation is documented is granted and registered in the Commercial Registry in a subsequent year.

       In these cases, where the “TYPE OF OPERATION” field is filled in with the key “T”:

       • Field “DATE OF THE TRANSACTION” must include the date on which the general shareholders meeting is held in which the resolution to dissolve and liquidate the SICAV is adopted.

       • The field “ NUMBER OF SHARES OR PARTICIPATIONS ACQUIRED OR DISPOSED OF / NUMBER OF SUBSCRIPTION ERDS SOLD” will be filled in with the number of shares or units of the SICAV covered by the reinvestment regime regulated in letter c) of section 2 of DT 41 LIS of which the declared NIF was the holder.

       • Field “ACQUISITION OR DISPOSAL AMOUNT” will include the entire liquidation fee corresponding to the declared NIF, that is, it will also include the credit rights that have not yet been collected, as well as, where applicable, the part of the liquidation fee that the partner has received in kind (that is, through the allocation of shares or interests in other IICs that formed part of the final liquidation balance sheet of the SICAV). This field will therefore record the amount of the liquidation fee that the partner is entitled to receive.

     • The “R” key must be completed in the year in which the reinvestment of the liquidation quota awarded takes place through the acquisition or subscription of shares or interests in another or other collective investment institutions by application of the deferral regime regulated in DT 41 LIS.

       In these cases, where the “TYPE OF OPERATION” field is filled in with an “R”:

       • Field “DATE OF THE TRANSACTION” must include the date on which the effective acquisition or subscription of shares or interests in the new IIC takes place, through the reinvestment of the total or partial amount of the liquidation quota awarded in the dissolution of the SICAV.

       • Field “NUMBER OF SHARES OR PARTICIPATIONS ACQUIRED OR DISPOSED OF/NUMBER OF SUBSCRIPTION ERDS SOLD” will record the number of shares or participations acquired in the new IIC.

       • Field “ACQUISITION OR DISPOSAL AMOUNT” will include the actual acquisition price of the new shares or interests in which the reinvestment is realized. For these purposes, it should be noted that, according to CV0574-22 of the DGT, when the partner has received part of his liquidation fee in kind (that is, through the allocation of shares or interests in other IICs that formed part of the final liquidation balance sheet of the dissolved company), the amount to be entered in this field will coincide with the liquidation value of said shares or interests on the day on which the general meeting of shareholders was held in which the dissolution and liquidation of the SICAV was agreed. In any case, it should also be taken into account that the amount entered in this field may not entirely coincide with the amount obtained in the sale reported with code “T”, when the reinvestment is made in several IICs or when there are “peaks”, that is, when the result of dividing the amount to be reinvested by the unit acquisition price of the IIC in which the liquidation share that the partner is to receive in cash is reinvested does not give a whole number of shares or units, if the fund does not admit fractions, but there are decimals, it not being necessary to report such differences or “peaks” in any box of the model.

       • In field “IDENTIFICATION OF THE COMPANY IN LIQUIDATION OR LIQUIDATED” , the SICAV that has been subject to dissolution and liquidation must be identified (either in the same fiscal year or, where applicable according to the deadlines provided for in the transitional regime, in a previous tax period).