New 0.2% tax on buying shares of large Spanish companies

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1. This creates the Tax on Financial Transactions, an indirect tax that taxes purchases of shares in Spanish companies, no matter where the purchase takes place or where the people or entities involved are based.
2. It only applies to shares of Spanish companies listed on a regulated market (or an equivalent one) whose market capitalization exceeds €1,000 million as of December 1 of the previous year. Depositary certificates representing those shares are also taxed, as are acquisitions coming from convertible bonds or derivatives. The list of affected companies is published each year before December 31 on the Tax Agency's electronic office.
3. Many transactions are exempt: share issuances, public sale offers, price stabilization or market-making activities, purchases between companies in the same group, corporate restructurings, securities financing transactions, resolution measures, and share buyback programs, among others. To apply these exemptions, the buyer must give certain information to the party required to file and pay.
4. The tax is due when the shares are recorded in the buyer's name in a securities account or registry. The tax base is the amount paid, excluding fees and transaction costs, with special rules for convertible bonds, derivatives, and same-day purchases and sales of the same security.
5. The taxpayer is the buyer of the shares. The party responsible for filing and paying is generally the financial intermediary that executes the purchase, with rules depending on where the transaction takes place. The rate is 0.2%, and the tax cannot be deferred or paid in installments.
6. In the first year, the list of taxed companies is set using market capitalization one month before the law takes effect. The law enters into force three months after its publication in the official gazette, and budget laws may change the rate and the exemptions.

Who it affects

• Investors who buy shares of large listed Spanish companies: They pay 0.2% of the purchase price, although in practice the intermediary usually remits the tax.
• Investment firms, credit institutions, and other financial intermediaries: They are the parties liable for the tax: they must file a self-assessment and pay, usually through a central securities depository.
• Spanish companies with market capitalization above €1,000 million: Their shares are subject to the tax and appear on the list the Tax Agency publishes each year.
• Central securities depositories established in Spain: They file and pay the self-assessment on behalf of the liable parties and must keep records available to the tax authorities.

Words worth knowing

Capitalización bursátil (market capitalization)

The total value of a company on the stock market: its share price times the number of shares.

Hecho imponible (taxable event)

The specific transaction that triggers the tax, in this case buying the shares.

Devengo (accrual)

The moment when the obligation to pay the tax arises.

Sujeto pasivo (liable party)

The person or entity required to file and pay the tax, even though the cost is borne by someone else (the buyer).

Certificados de depósito (depositary certificates)

Securities that represent shares of a company and trade in their place, for example on another stock exchange.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries