I

The fourth additional provision of Law 46/2002, of December 18, of partial reform of the Income Tax of the Physical Persons and amending the Laws of the Taxes on Societies and on the Income of Residents, in the wording given by the 18th final provision of Law 62/2003, of 30 December, of fiscal, administrative and social order measures, provides that the Government will prepare and approve within 15 months of the The texts recast of the Tax on the Income of the Physical Persons, of the Non-Resident Income Tax and Corporate Tax.

This legislative delegation has the most limited scope of those provided for in Article 82 (5) of the Constitution, since it is limited to the mere formulation of a single text and does not include an authorization to regularise, clarify and harmonise the legal texts to be recast.

This enablement is intended to increase the clarity of the tax system by integrating into a single regulatory body the provisions affecting these taxes, thereby contributing to improving security the legal and tax authorities of the tax authorities.

In the exercise of such authorization, this royal legislative decree is elaborated by which the recast text of the Law on Corporate Tax is approved.

II

Law 43/1995, of 27 December, of the Tax on Societies, published in the "Official Gazette of the State" on December 28, 1995, had as its main causes the reforms of the trade and tax legislation Income of the Physical Persons carried out in previous years, as well as the opening of our economy to the cross-border flows of capital and the evolution of the tax systems in the countries of our environment.

Law 43/1995 of 27 December, since its entry into force on 1 January 1996, has undergone significant changes, including those introduced by the following rules:

(a) Law 10/1996 of 18 December, of urgent fiscal measures on the correction of double internal taxation and on incentives for the internationalisation of companies, which established the new regime of deduction for double taxation within the meaning of Article 28 of Law 43/1995 of 27 December 1995, as well as the legal status of the tax on revaluations carried out under Royal Decree Law 7/1996 of 7 June 1996 on measures (i) urgent measures of a fiscal nature and promoting and liberalising economic activity.

b) Laws 40/1998, of December 9, of the Income Tax of the Physical Persons and other Tax Rules, and 41/1998, of December 9, of Income Tax of Non-Residents and Tax Rules. These rules provided for the separate regulation of the taxation of non-residents in respect of natural and legal persons resident in Spain.

(c) Law 6/2000 of 13 December 2000 approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises, which established non-integration into the taxable income base for the lender in certain securities lending operations, extended the time limit for the calculation of deductions to avoid international double taxation and established the non-retention of income derived from the distribution of the premium for the issue of shares/units and the reduction of capital.

(d) Law 24/2001 of 27 December, of tax, administrative and social measures, which amended, inter alia, the tax, the treatment of the taxation of extraordinary profits and the fiscal consolidation.

e) The aforementioned Law 46/2002 of 18 December, which abolished the internal tax transparency regime and created the regime of the heritage companies.

(f) Law 36/2003 of 11 November of economic reform measures, which established the tax regime of entities engaged in the leasing of dwellings.

g) Finally, Law 62/2003 of 30 December, of tax, administrative and social measures, which introduced various measures such as the improvement of the deduction for research and development and innovation activities technology.

In the text approved by this royal legislative decree, Law 43/1995, of December 27, recasts with various norms, some of which are integrated into its articles and others are introduced as additional provisions and transitional. This distribution has been carried out on the basis of the possibility or not of integrating the content of each provision into the structure of the basic regulation of the tax, as well as its more or less specific scope and its temporary validity.

Certain references contained in Law 43/1995 of 27 December, which have lost their validity as a result of subsequent amendments to the tax regulations, have been removed in the recast text.

First of all, it is important to highlight the reform carried out by Law 41/1998 of 9 December, which, by virtue of its unique repeal provision, repealed, among other rules, Title VII of Law 43/1995 of 27 December. In the drafting of this recast text, the provisions of the first provision of Law 41/1998 of 9 December, which clarifies how the references made by the Tax Law should be interpreted, have been taken into account. Societies to the real obligation to contribute, given the new normative framework that is born with the enactment of Law 41/1998, of December 9.

Finally, the references made to companies subject to the internal tax transparency regime, the special scheme of which has been abolished with the entry into force of Law 46/2002 of 18 December, disappear.

III

Thus, the articles of Law 43/1995, of December 27, and the following provisions are recast in the articles of the recast text:

(a) Freedom of depreciation for the items of tangible and intangible fixed assets of the limited companies, as amended by Law 4/1997 of 24 March of Industrial Societies, which is included in paragraph (a) of the paragraph 2 of Article 11.

b) Deductibility of accrued interest from certain participative loans in accordance with the wording of Royal Decree Law 7/1996 of 7 June, which is incorporated as paragraph 2 of Article 14.

(c) Non-payment of income which is evidenced as a result of the right to rescue and the participation in benefits of collective insurance contracts that implement pension commitments, contained in the Additional provision of Law 46/2002 of 18 December 2002 and which is included as new paragraph 4 of Article 17.

(d) Income of income which is not subject to integration into the tax base, which is added, respectively, as paragraphs 5 and 6 of Article 17:

1. No. Those that are revealed when paying the tax debts referred to in Article 73 of Law 16/1985 of 25 June of the Spanish Historical Heritage.

2. The coming from certain forest grants in accordance with the fifth additional provision of Law 46/2002, of December 18.

e) Tax arrangements of sports entities as provided for in the first paragraph of the additional twenty-sixth provision of Law 31/1991 of 30 December 1992 on the General Budget of the State for 1992, which is incorporated into the as new Chapter XVIII of Title VII.

f) Obligation to make certain payments on account of the Income Tax of the Physical Persons, the Income Tax of Non-Residents and the Tax on Societies, and the obligation to retain or to enter into account for the transmission of financial assets of explicit performance, as contained in Article 24 of Law 50/1998 of 30 December 1998, of fiscal, administrative and social order measures, including, respectively, paragraphs 1 and 6 of Article 141. It has also been incorporated in Articles 140 and 141, respectively, as subjects required to retain or to enter into account the representatives of the insurance companies operating in Spain in the freedom to provide services, according to the Article 86.1 and the transitional provisions of Law No 30/1995 of 8 November 1995 on the management and supervision of private insurance, and the representatives appointed in accordance with the provisions of Article 55.7 and the provision The second part of Law 35/2003 of 4 November, of collective investment institutions, acting in name of the manager operating under the freedom to provide services.

(h) The regulations contained in the first provision of Law 43/1995 of 27 December 1995 on the provision of the recast text, for reasons of systematic and technical legislation, are also incorporated into the articles of the recast text. application of the special arrangements for mergers, divisions, transfers of assets and exchange of securities to taxable persons who do not have the legal form of a company, and in the fourth provision of that law, relating to the rules on retention, transmission and formal obligations relating to financial assets and other transferable securities. The first of these has been set out in Article 83 (6) of the recast text and the second in paragraphs 2, 3, 4 and 5 of Article 141.

IV

For their part, they are incorporated as additional provisions of the recast text, together with the provisions of Law 43/1995, of December 27, the following rules:

(a) In the third additional provision, the tax treatment of Community agricultural and fisheries policy aid and other public aid contained in the additional twenty-second provision of Law 40/1998 of 9 May 1998. December, which recasts with the additional provision of Law 43/1995 of 27 December 1995.

(b) In the seventh additional provision, the depreciation coefficients applicable to the acquisitions of new assets between 1 January 2003 and 31 December 2004, pursuant to Article 12 of the Law 36/2003, dated November 11.

V

Finally, they are incorporated as transitional provisions of the recast text, along with those of Law 43/1995, of December 27, still applicable, the following provisions:

(a) In paragraph 3 of the second transitional provision, the regulation contained in paragraph 2 of the eighth transitional provision of Law 50/1998 of 30 December 1998 on the transitional tax arrangements for activities (a) for the purposes of Article 5 (3) of Regulation (EEC) No 53/2002 of the European Parliament and of the Council on the application of the laws of the Member States relating to: modification of the tax regime for the investigation and exploitation of hydrocarbons.

(b) In the third transitional provision, in paragraph 2, the regulation contained in the ninth transitional provision of Law 50/1998 of 30 December 1998 and paragraphs 3, 4 and 5 of the transitional provision third of Law 24/2001 of 27 December, concerning the reinvestment of extraordinary profits.

(c) In paragraph 3 of the transitional provision seventh, the transitional provision, sixth of Law 24/2001 of 27 December, as amended by the sixth provision of Law 46/2002 of 18 December 2002 on the effects of the difference between the acquisition price of the holding and its theoretical value in the transactions carried out by the special scheme of mergers, divisions, contributions of assets and exchange of securities.

(d) In the transitional provision, eighth, in paragraph 2, the provisions of the second transitional provision of Law 6/2000 of 13 December on deductions pending in Articles 29a and 30a of Law 43/1995 of 27 In December, and, in paragraph 3, it was established in the third transitional provision of Law 46/2002 of 18 December 2002, in relation to the outstanding deductions from Chapter IV of Title VI of Law 43/1995 of 27 December 1995.

e) In the transitional provision novena, the regulation of the fourth transitional provision of Law 24/2001, of 27 December, with respect to the negative taxable bases pending to compensate in the Tax on Societies.

(f) In the transitional provision fourteenth, the regulation established by the transitional provision sixteenth of Law 24/2001 of 27 December concerning transitional transitional arrangements for competition.

(g) In the transitional provisions fifteenth and sixteenth, the content of the first and second transitional provisions of Law 46/2002 of 18 December 2002 governing the transitional tax arrangements for the transparent societies.

(h) In the transitional provisions of the 17th paragraph, paragraph 1 of the single transitional provision of Law No 10/1996 of 18 December 1996 deroga from the restrictions laid down in Article 28 (4) of the Law 43/1995, of 27 December, to dividends or shares in profits from securities representing the capital or own funds acquired prior to Royal Decree Law 8/1996 of 7 June.

(i) In the transitional provision eighteenth, the application of Article 128 (11) of Law 43/1995, of 27 December 1995, to assets whose construction period has ended before 31 December 2002.

VI

It should be noted that they are not integrated into the recast text, for reasons of systematic and consistent normative, those rules of a fiscal nature which, by their special content from a subjective, objective or temporal point of view, do not it should be recast with the general rules of character and scope. This is the case for those whose recasting in this original text is a dispersion of the rules contained in them for affecting different areas and various taxes, such as, for example, Law 20/1990, of 19 December, on Tax Regime Cooperatives, Law 19/1994, of July 6, of modification of the Economic and Fiscal Regime of the Canary Islands, Law 49/2002, of 23 December, of tax regime of the non-profit entities and of the tax incentives to the patronage, the Additional provision 18th of Law 62/2003 of 30 December on loans for securities, or the Additional provision, second, of Law 13/1985 of 25 May, of investment coefficients, own resources and information obligations of financial intermediaries, and the second transitional provision of Law 19/2003 of 4 July, on the legal regime for the movement of capital and economic transactions with the outside world and on certain measures for the prevention of money laundering, relating to preference shares and debt instruments.

The regulatory provisions of events of particular public interest, such as the 2004 Holy Year or the 2007 America Cup, are not included.

VII

This royal legislative decree contains an article, an additional provision, two transitional provisions, a derogation provision and a final provision.

The recast text of the Corporate Tax Act is approved under its single article.

According to the unique additional provision, the regulatory references made in other provisions to Act 43/1995 of 27 December shall be construed as being made to the corresponding precepts of the recast text.

The first transitional provision states that until 1 July 2004, the date of entry into force of Law 58/2003, of 17 December, General Tax, will continue to apply certain precepts of Law 43/1995, of 27 of December, and that until that date the references made in the text recast to the precepts of the new General Tax Law will be understood to the corresponding ones of the Law 230/1963, of December 28, General Tax, and of the Law 1/1998, of February 26, of the Rights and Guarantees of the Taxpayers, in the terms that Law 43/1995, of 27 December.

In the second transitional provision, it is established that until 1 September 2004, the date of entry into force of Law 22/2003, of July 9, Conjutida, certain precepts of Law 43/1995, of 27 of 27 of (a) December, and that the procedures in which they are dealt with on that date shall continue to apply to them.

In the derogation provision the rules that are recast in this text are collected, without prejudice to those which, being also the subject of recasting, are repealed in the actual legislative decrees approving the texts. the tax laws on the Income of the Physical Persons and on the Income of Non-Residents, to affect to a greater extent one of these taxes. Likewise, the transitional provision seventh of Law 62/2003, of December 30, of fiscal, administrative and social order measures, has been repealed because it has been incorporated into the second transitional provision of this royal legislative decree.

Finally, the only final provision states that the entry into force of the actual legislative decree and the recast text which is adopted shall be the day following that of its publication in the Official Gazette of the State. some exceptional cases arising from the entry into force of the new General Tax Law and the Law on Insolvency.

The recast text that is approved is composed of 144 articles, grouped into nine titles, eight additional provisions, 18 transitional provisions, and four final provisions.

Likewise, the recast text includes at the beginning an index of its content, the purpose of which is to facilitate the use of the standard by its recipients by means of a rapid localization and systematic location of its precepts.

In its virtue, on the proposal of the Minister of Finance, in agreement with the Council of State, and after deliberation of the Council of Ministers at its meeting of March 5, 2004,

D I S P O N G O:

Single item. Approval of the recast of the Companies Tax Act.

The recast text of the Corporate Tax Act, which is inserted below, is approved.

Single additional disposition. Regulatory referrals.

The regulatory references made in other provisions to Law 43/1995 of 27 December 1995 on the Company Tax shall be construed as being made to the corresponding precepts of the recast text which is approved by the real legislative decree.

First transient disposition. Law 58/2003, of December 17, General Tax.

Until July 1, 2004, date of entry into force of Law 58/2003, of December 17, General Tax:

(a) Articles 77.2, 84.4, 107.4, 135 quater.2 and 141.2 of Law 43/1995 of 27 December of the Company Tax shall be retained.

(b) The references made, in the recast text approving this royal legislative decree, to the precepts of Law 58/2003, of 17 December, shall be construed as being made to the corresponding provisions of Law 230/1963, of 28 of In December, General Tax, and Law 1/1998, of 26 February, of the Rights and Guarantees of the Taxpayers, in the terms provided for in Law 43/1995, of 27 December.

Second transient disposition. Law 22/2003, dated July 9, Insolvency.

Until September 1, 2004, the date of entry into force of Law 22/2003, of July 9, Bankruptcy, will retain its validity in articles 12.2.b) and 81.4.b) of Law 43/1995, of December 27, of the Tax on Societies. However, it shall continue to apply those provisions in accordance with their wording in force until 31 August 2004 as soon as they are governed by the law before the Law of 31 August 2004. 22/2003, dated July 9.

Single repeal provision. Regulatory repeal.

1. Subject to the provisions of the previous transitional provisions, the following rules shall be repealed with the entry into force of this royal legislative decree, on the occasion of their incorporation into the recast text:

(a) Law 43/1995 of 27 December of the Company Tax. However, the additional provision of thirteenth and paragraph 2 shall remain in force, subject to the provisions of Article 24 of Law 20/1990 of 19 December 1990 on the Tax Regime of Cooperatives and Article 24 (4) of the Treaty. Second final provision, and final provision seventh, of Law 43/1995, of December 27.

(b) The first paragraph of the additional twenty-sixth provision of Law 31/1991 of 30 December 1992 of the General Budget of the State for 1992.

(c) Article 20 (2) of Royal Decree Law 7/1996 of 7 June 1996 on urgent measures of a fiscal nature and on the promotion and liberalization of economic activity.

(d) Paragraph 1 of the single transitional provision of Law No 10/1996 of 18 December 1996 on urgent fiscal measures on the correction of intercorporate internal taxation and on incentives for the internationalisation of companies.

e) The second paragraph of the fourth additional provision of Law 4/1997, of March 24, of Labor Societies.

(f) Article 24 and the transitional provisions eighth, paragraph 2, and ninth of Law 50/1998 of 30 December 1998 on fiscal, administrative and social order measures.

g) The second transitional provision of Law 6/2000, of 13 December, approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises.

(h) The third, fourth, sixth and 16th transitional provisions of Law 24/2001 of 27 December, of fiscal, administrative and social order measures.

(i) The fifth additional provision and the first, second and third transitional provisions of Law 46/2002 of 18 December 2002 on the partial reform of the Income Tax of the Physical Persons and amending the Laws of Taxes on Societies and on the Income of Non-Residents.

j) The additional twenty-fifth provision and the seventh transitional provision of Law 53/2002, of December 30, of fiscal, administrative and social order measures.

k) Article 12 of Law 36/2003 of November 11 on economic reform measures.

(l) The seventh transitional provision of Law 62/2003, of 30 December, of fiscal, administrative and social order measures.

2. The repeal of the provisions referred to in paragraph 1 shall not prejudice the rights of the public treasury with respect to the tax obligations due during its lifetime.

Single end disposition. Entry into force.

1. This royal legislative decree and the recast text which are adopted shall enter into force on the day following that of their publication in the Official Gazette of the State, with the exception of the following paragraphs.

2. Articles 63.2, 70.4, 93.4, 125.2 and 135.2 of the recast text shall enter into force on 1 July 2004, the date of entry into force of Law 58/2003 of 17 December 2004, General Tax.

3. Articles 12.2.b) and 67.4.b) of the recast text shall enter into force on 1 September 2004, the date of entry into force of Law 22/2003 of 9 July

.

Dado en Madrid, a 5 de marzo de 2004.

JOHN CARLOS R.

The Minister of Finance,

CRISTOBAL MONTORO ROMERO

RECAST TEXT OF THE CORPORATION TAX LAW

Index

Title I. Nature and scope of application of the tax.

Article 1. Nature.

Article 2. Spatial application scope.

Article 3. Treaties and conventions.

Title II. The taxable fact.

Article 4. Taxable fact.

Article 5. Estimate of rents.

Article 6. Allocation of income.

Title III. The taxable person.

Article 7. Taxable persons.

Article 8. Residence and tax domicile.

Article 9. Exemptions.

Title IV. The tax base.

Article 10. Concept and determination of the tax base.

Article 11. Value adjustments: redemptions.

Article 12. Value adjustments: loss of value of assets.

Article 13. Provision for risks and expenses.

Article 14. Non-deductible expenses.

Article 15. Valuation rules: general rule and special rules in the assumptions of lucrative and societarian transmissions.

Article 16. Valuation rules: linked operations.

Article 17. Valuation rules: changes of residence, cessation of permanent establishments, operations carried out with or by persons or entities resident in tax havens and amounts subject to retention. Special rules.

Article 18. Effects of the replacement of the book value by the normal market value.

Article 19. Temporary imputation. Accounting enrollment of revenue and expenditure.

Article 20. Subcapitalization.

Article 21. Exemption to avoid double international economic taxation on dividends and foreign source income derived from the transmission of securities representative of the own funds of non-resident entities on Spanish territory.

Article 22. Exemption from certain income earned abroad through a permanent establishment.

Article 23. Deduction for investments for the implementation of companies abroad.

Article 24. Benefit-social work of savings banks.

Article 25. Compensation of negative taxable bases.

Title V. Tax period and tax accrual.

Article 26. Tax period.

Article 27. Tax accrual.

Title VI. Tax liability.

Chapter I. Type of charge and full quota.

Article 28. The type of lien.

Article 29. Full quota.

Chapter II. Deductions to avoid double taxation.

Article 30. Deduction to avoid internal double taxation: dividends and internal source capital gains.

Article 31. Deduction to avoid international double taxation: tax borne by the taxable person.

Article 32. Deduction to avoid international double taxation: dividends and profit shares.

Chapter III. Bonuses.

Article 33. Bonus for rent obtained in Ceuta and Melilla.

Article 34. Bonus for export activities and provision of local public services.

Chapter IV. Deductions to incentivize the realization of certain activities.

Article 35. Deduction for research and development activities and technological innovation.

Article 36. Deduction for the promotion of information and communication technologies.

Article 37. Deduction for export activities.

Article 38. Deduction for investments in goods of cultural interest, cinematographic productions, book publishing, navigation and vehicle location systems, adaptation of vehicles for the disabled and childcare for children of workers.

Article 39. Deductions for environmental investments.

Article 40. Deduction for professional training costs.

Article 41. Deduction for job creation for disabled workers.

Article 42. Deduction for reinvestment of extraordinary profits.

Article 43. Deduction for business contributions to employment pension schemes or to social security mutual funds which act as an instrument for business social forecasting.

Article 44. Rules common to the deductions provided for in this Chapter.

Chapter V. Fracked payment.

Article 45. The split payment.

Chapter VI. Deduction of payments on account.

Article 46. Deduction of holds, income on account, and fractional payments.

Title VII. Special tax regimes.

Chapter I. Special tax regimes in particular.

Article 47. Definition.

Chapter II. Economic, Spanish and European interest groups and temporary joint ventures.

Article 48. Groupings of Spanish economic interest.

Article 49. European groupings of economic interest.

Article 50. Temporary unions of companies.

Article 51. Imputation criteria.

Article 52. Identification of members or member companies.

Chapter III. Entities engaged in the leasing of dwellings.

Article 53. Scope of application.

Article 54. Bonuses.

Chapter IV. Companies and funds of venture capital and regional industrial development companies.

Article 55. Capital-risk companies and funds.

Article 56. Regional industrial development companies.

Chapter V. Institutions for collective investment.

Article 57. Taxation of collective investment institutions.

Article 58. Taxation of the partners or members of the collective investment institutions.

Article 59. Income accounted for by shares or units of collective investment institutions.

Article 60. Taxation of members or members of collective investment institutions incorporated in countries or territories that are regulated as tax havens.

Chapter VI. Heritage companies.

Article 61. Regime of the heritage companies.

Article 62. Distribution of profits earned in financial years in which the regime of the ownership and transfer of shares or shares in companies which have been subject to the regime of the property companies has been applied.

Article 63. Identification of members.

Chapter VII. Tax consolidation regime.

Article 64. Definition.

Article 65. Taxable person.

Article 66. Tax liabilities arising from the application of the tax consolidation regime.

Article 67. Definition of the tax group. Dominant company. Dependent companies.

Article 68. Inclusion or exclusion of companies in the tax group.

Article 69. Determining the indirect domain.

Article 70. Implementation of the tax consolidation regime.

Article 71. Determination of the tax group's tax base.

Article 72. Removals.

Article 73. Additions.

Article 74. Compensation of negative taxable bases.

Article 75. Reinvestment.

Article 76. Tax period.

Article 77. Full membership of the tax group.

Article 78. Deductions and bonuses from the tax group's full quota.

Article 79. Reporting obligations.

Article 80. Causes determining the loss of the fiscal consolidation regime.

Article 81. Effects of the loss of the fiscal consolidation regime and the extinction of the tax group.

Article 82. Statement and self-validation of the tax group.

Chapter VIII. Special arrangements for mergers, divisions, transfers of assets and exchange of securities.

Article 83. Definitions.

Article 84. System of income derived from the transmission.

Article 85. Tax assessment of purchased goods.

Article 86. Tax valuation of shares or shares received in consideration of the contribution.

Article 87. Tax regime for the exchange of securities.

Article 88. Taxation of partners in merger, absorption and total or partial division operations.

Article 89. Shares in the capital of the transferring entity and the acquiring institution.

Article 90. Subrogation in tax rights and obligations.

Article 91. Imputation of rents.

Article 92. Losses of permanent establishments.

Article 93. Accounting obligations.

Article 94. Non-cash contributions.

Article 95. Rules to avoid double taxation.

Article 96. Implementation of the tax regime.

Chapter IX. Tax regime for mining.

Article 97. Mining entities: freedom of amortisation.

Article 98. Exhaustion factor: scope and modes.

Article 99. Exhaustion factor: investment.

Article 100. Exhaustion factor: requirements.

Article 101. Exhaustion factor:

non-compliance with requirements.

Chapter X. Tax regime for the investigation and exploitation of hydrocarbons.

Article 102. Exploration, research and exploitation of hydrocarbons: depletion factor.

Article 103. Exhaustion factor: requirements.

Article 104. Exhaustion factor:

non-compliance with requirements.

Article 105. Shared ownership.

Article 106. Depreciation of intangible investments and research expenditure. Compensation of negative taxable bases.

Chapter XI. International tax transparency.

Article 107. Inclusion in the tax base of certain positive income obtained by non-resident entities.

Chapter XII. Tax incentives for small-scale enterprises.

Article 108. Scope: Business figure.

Article 109. Freedom of amortisation.

Article 110. Freedom of amortization for low-value investments.

Article 111. Depreciation of fixed new material and intangible fixed assets.

Article 112. Allocation for possible insolvencies of debtors.

Article 113. Depreciation of property assets subject to reinvestment.

Article 114. Type of lien.

Chapter XIII. Tax regime for certain leasing contracts.

Article 115. Leasing contracts.

Chapter XIV. Regime of foreign securities holding entities.

Article 116. Foreign securities holding entities.

Article 117. Income derived from the holding of securities representing the own funds of non-resident entities on Spanish territory.

Article 118. Profit distribution.

Transmission of the participation.

Article 119. Application of this scheme.

Chapter XV. Scheme of partially exempt entities.

Article 120. Scope of application.

Article 121. Exempt income.

Article 122. Determination of the tax base.

Chapter XVI. Regime of communities with common hand-held neighborhood mounts.

Article 123. Regime of communities with common hand-held neighborhood mounts.

Chapter XVII. Arrangements for shipping entities on the basis of tonnage.

Article 124. Scope of application.

Article 125. Determination of the tax base by the objective estimation method.

Article 126. Type of levy and fee.

Article 127. Split payments.

Article 128. Application of the scheme.

Chapter XVIII. Regime of sports entities.

Article 129. Regime of sports entities.

Title VIII. Tax management.

Chapter I. The entity index.

Article 130. Index of entities.

Article 131. Low in the entity index.

Article 132. Obligation of collaboration.

Chapter II. Accounting obligations. Goods and rights not accounted for. Voluntary revaluations.

Article 133. Accounting obligations. Powers of the Tax Administration.

Article 134. Goods and rights not accounted for or not declared: presumption of obtaining income.

Article 135. Voluntary accounting revaluations.

Chapter III. Declaration, self-settlement and provisional settlement.

Article 136. Statements.

Article 137. Self-validation and income of the tax liability.

Article 138. Provisional settlement.

Chapter IV. Return of trade.

Article 139. Return of trade.

Chapter V. Obligation to retain and enter into account. Obligations in relation to the tax domicile.

Article 140. Withholding and income on account.

Article 141. Rules on retention, transmission and formal obligations relating to financial assets and other transferable securities.

Article 142. Obligations of taxable persons in relation to the tax domicile.

Chapter VI. Powers of the Administration to determine the tax base.

Article 143. Powers of the Administration to determine the tax base.

Title IX. Court order.

Article 144. Competent jurisdiction.

Additional disposition first. Restrictions on the double taxation of dividends.

Additional provision second. References to Law No 29/1991 of 16 December 1991 adapting certain concepts of taxation to the directives and regulations of the European Communities contained in various provisions. Regime of the Tax on the Increase of the Value of Urban Nature's Land in certain operations.

Additional provision third. Grants from the Community's agricultural and fisheries policy and public aid.

Additional provision fourth. Tax regime for the transmissions of assets made in compliance with provisions with the law and the rules of defence of competition.

Additional provision fifth. Tax incentives for the renewal of the merchant fleet.

Additional provision sixth. Impact of the reserve for investments in the Canary Islands in the calculation of the instalments.

Additional provision seventh. Depreciation coefficients applicable to the acquisitions of assets made between 1 January 2003 and 31 December 2004.

First transient disposition. Regularisation of extra-accounting adjustments.

Second transient disposition. Tax regime for the investigation and exploitation of hydrocarbons and for the promotion of mining.

Transitional provision third. Reinvestment of Extraordinary Benefits Transitional provision fourth. Tax benefits of reconversion and reindustrialisation.

Transient disposition fifth. Tax benefits of Law 12/1988, of 25 May, Law 5/1990 of 29 June, and Law 30/1990 of 27 December.

Transitional disposition sixth. Leasing.

Transitional disposition seventh. Trade funds, trade marks, transfer rights and other intangible assets acquired prior to the entry into force of Law 43/1995 of 27 December of the Company Tax. Effects of the difference between the acquisition price of the holding and its theoretical value in the transactions carried out by the special scheme of mergers, divisions, asset contributions and exchange of securities.

Transient disposition octave. Deductions to be applied in Corporate Tax.

transient disposition ninth. Negative taxable bases to be offset in the Company Tax.

Transient disposition tenth. Balances of the provision for insolvencies covered by Article 82 of Royal Decree 2631/1982 of 15 October 1982.

Transient disposition eleventh. Transitional arrangements for financial operations benefits.

Transient Disposition twelfth. Tax value of the units of collective investment institutions.

transient disposition thirteenth. Update accounts.

Transitional disposition fourteenth. Transitional arrangements for the intensification of competition.

15th transient disposition. Transparent companies.

Transient disposition sixteenth. Dissolution and liquidation of transparent companies.

transient disposition seventeenth. Transitional deduction scheme to avoid double taxation of dividends in corporate tax.

18th transient disposition. Application of Article 115 (11) of this Act to assets whose construction period has been completed before 31 December 2002.

Final disposition first. Entities covered by Law 49/2002, of 23 December, of the tax regime of non-profit entities and of tax incentives for patronage.

Final disposition second. Entities covered by Law 20/1990 of 19 December on the Tax Regime of Cooperatives.

Final disposition third. Ratings to the State General Budget Law.

Final disposition fourth. Regulatory enablement.

RECAST TEXT OF THE CORPORATION TAX LAW

TITLE I

Nature and scope of the tax

Article 1. Nature.

The Company Tax is a direct and personal tax that taxes the income of companies and other legal entities in accordance with the rules of this law.

Article 2. Spatial application scope.

1. The Company Tax will apply throughout the Spanish territory.

For the purposes of the preceding paragraph, the Spanish territory also includes those areas adjacent to the territorial waters over which Spain may exercise its rights, relating to the soil and marine subsoil, suprayacent waters, and its natural resources, in accordance with Spanish law and international law.

2. The provisions of the preceding paragraph shall be without prejudice to the foral tax systems of concert and economic agreement in force respectively in the Historical Territories of the Autonomous Community of the Basque Country and in the Community Foral de Navarra.

Article 3. Treaties and conventions.

The provisions of this law shall be without prejudice to the provisions of international treaties and conventions that have become part of the internal order, in accordance with Article 96 of the Constitution. Spanish.

TITLE II

The taxable fact

Article 4. Taxable fact.

1. The taxable person shall be liable for the taxable person's income, irrespective of his source or origin.

2. In the special arrangements for economic, Spanish and European interest groups, and for temporary unions of undertakings, income shall be deemed to be imputation to the taxable person of the taxable bases, or of the profits or losses, of the entities subject to such a scheme.

In the international tax transparency regime, it will be understood to obtain income the fulfilment of the determining circumstances of the inclusion in the tax base of the positive income obtained by the entity. resident.

Article 5. Estimate of rents.

The disposals of goods and rights in their different modalities shall be presumed to be paid for their normal market value, unless otherwise proved.

Article 6. Allocation of income.

1. The income corresponding to the civil societies, whether or not they have legal personality, heretics, communities of property and other entities referred to in Article 35.4 of Law 58/2003 of 17 December, General Tax, as well as the Deductions and income on account which they have incurred shall be attributed to the partners, heirs, communes or unit-holders, respectively, in accordance with the provisions of Section 2. of Title VII of the recast of the Income Tax Act of the Physical Persons, approved by the Royal Legislative Decree of March 5.

2. The income allocation scheme shall not apply to agricultural processing companies, which shall be taxed by the corporation tax.

3. Entities under the income allocation scheme shall not be taxed by the Company Tax.

TITLE III

The taxable person

Article 7. Taxable persons.

1. They shall be taxable persons when they have their residence in Spanish territory:

(a) Legal persons, except civil societies.

b) Investment funds, regulated in the Law on Collective Investment Institutions.

(c) The temporary unions of undertakings, governed by Law 18/1982 of 26 May, on the tax arrangements of temporary associations and associations of undertakings and regional industrial development companies.

(d) Equity-risk funds, regulated in Law 1/1999, of 5 January, regulatory for venture capital and management companies.

e) Pension funds, regulated in the recast of the Law on the Regulation of Pension Plans and Funds, approved by the Royal Legislative Decree 1/2002 of 29 November.

f) The mortgage market regulation funds, regulated in Law 2/1981 of March 25, of regulation of the mortgage market.

g) Mortgage securitisation funds, regulated in Law 19/1992, of July 7, on corporate governance and real estate investment funds and on mortgage-backed securities.

(h) The asset-securitisation funds referred to in the additional provision of the Spanish legislation on credit for the second coordination directive of 14 April (Law 3/1994 of 14 April 1994). banking and other financial system modifications.

i) The investment guarantee funds, regulated in Law 24/1988 of 28 July, of the Securities Market.

(j) The communities holding common hand-side neighborhood mountains covered by Law 55/1980 of 11 November on the regime of the common hand-side hills, or on the corresponding autonomous legislation.

2. Taxable persons shall be taxed for all the income they obtain, irrespective of the place where they were produced and whatever the residence of the payer.

3. The taxable persons of this tax shall be designated abbreviated and interchangeably by the names of companies or entities throughout this law.

Article 8. Residence and tax domicile.

1. The entities in which one of the following requirements is met shall be considered to be resident in Spanish territory:

(a) That they were constituted according to the Spanish laws.

b) Having their registered office in Spanish territory.

c) That they have their headquarters of effective address in Spanish territory.

For these purposes, an entity shall be deemed to have its headquarters of effective address in Spanish territory when on the radiating the address and control of the whole of its activities.

2. The tax domicile of the taxable persons resident in Spanish territory shall be that of their registered office, provided that the administrative management and management of their business are effectively centralised in the latter.

In another case, it will be treated to the place where the management or address is performed.

In cases where the place of the tax domicile cannot be established, in accordance with the above criteria, the place where the highest value of the fixed assets will be used shall prevail.

Article 9. Exemptions.

1. They will be exempt from the tax:

a) State, Autonomous Communities, and local entities.

b) the autonomous bodies of the State and entities governed by public law of the same nature as the autonomous communities and local authorities.

(c) The Banco de España, the Deposit Guarantee Funds and the Investment Guarantee Funds.

d) Public entities in charge of social security management.

(e) The Institute of Spain and the Royal Academias officers integrated into that and the institutions of the autonomous communities with their own official language that have similar purposes to those of the Royal Spanish Academy.

(f) The other public bodies referred to in the additional provisions of the ninth and tenth paragraphs, paragraph 1, of Law 6/1997 of 14 April of the Organization and the Functioning of the General Administration of the State, as well as the entities governed by public law of the same nature as the autonomous communities and local authorities.

2. They shall be partially exempt from the tax in accordance with the terms of Title II of Law 49/2002 of 23 December of the tax regime of non-profit-making entities and of tax incentives for patronage, institutions and institutions. not for profit to which this title applies.

3. They shall be partially exempt from the tax in accordance with Chapter XV of Title VII of this Law:

(a) Non-profit entities and institutions not included in the preceding paragraph.

b) Unions, federations and confederations of cooperatives.

c) Professional colleges, business associations, official chambers, workers ' unions, and political parties.

(d) Employment promotion funds constituted under Article 22 of Law 27/1984 of 26 July on conversion and reindustrialisation.

(e) Mutual work accidents and occupational diseases of Social Security that meet the requirements laid down by their regulatory regulations.

f) The public right entity Ports of the State and the Port Authorities.

TITLE IV

The tax base

Article 10. Concept and determination of the tax base.

1. The tax base shall be constituted by the amount of the income in the tax period, which is reduced by the compensation of negative taxable bases of previous tax periods.

2. The taxable base shall be determined by the method of direct estimation, by the objective estimate when this law determines its application and, in the alternative, by the indirect estimation, in accordance with the provisions of the General Law Tax.

3. In the method of direct estimation, the tax base shall be calculated, correcting, by application of the provisions laid down in this law, the accounting result determined in accordance with the rules laid down in the Code of Trade, other laws relating to such determination and the provisions to be laid down in the development of those rules.

4. In the objective estimation method the tax base may be determined in whole or in part by the application of the signs, indices or modules to the sectors of activity determined by this law.

Article 11. Value adjustments: redemptions.

1. The amounts which, by way of depreciation of tangible or intangible fixed assets, correspond to the actual depreciation suffered by the various elements by way of operation, use, enjoyment or obsolescence, shall be deductible.

Depreciation will be considered effective when:

a) Be the result of applying the linear amortization coefficients set to the officially approved amortization tables.

b) Be the result of applying a constant percentage on the outstanding value of amortization.

The constant percentage will be determined by weighting the linear depreciation coefficient obtained from the amortisation period according to officially approved amortization tables, by the following coefficients:

1. º 1.5, if the item has a amortization period of less than five years.

2. º 2, if the item has a amortization period equal to or greater than five years and less than eight years.

3. º 2.5, if the item has a amortization period equal to or greater than eight years.

The constant percentage cannot be less than 11 percent.

Buildings, furniture and goods shall not be eligible for depreciation by a constant percentage.

c) Be the result of applying the digit numbers method.

The sum of digits will be determined based on the amortization period set in the officially approved amortization tables.

Buildings, furniture and goods shall not be eligible for amortisation by digit numbers.

d) Adjust to a plan formulated by the taxable person and accepted by the tax administration.

e) The taxable person justifies its amount.

The amortization tables and the procedure for the resolution of the plan referred to in paragraph (d) shall be approved.

2. They may be freely amortised:

(a) The elements of the immobilized material and intangible assets of the public limited companies and of the limited companies affected by the performance of their activities, acquired during the first five years from the date of their qualification as such.

(b) The mining assets in the terms of Article 97.

(c) Elements of tangible and intangible fixed assets, excluding buildings, affected by research and development activities.

Buildings may be amortised, in equal parts, over a period of 10 years, in the part that is affected by the research and development activities.

(d) Research and development expenses activated as intangible fixed assets, excluding depreciation of items enjoying the freedom of redemption.

(e) The elements of the tangible or intangible fixed assets of the entities that have the status of priority associative holdings in accordance with the provisions of Law 19/1995 of 4 July, of the modernization of the agricultural holdings, acquired during the first five years from the date of their recognition as a priority holding.

The amounts applied to the freedom of amortisation will increase the tax base on the occasion of the depreciation or transmission of the items that they enjoyed.

3. In the case of disposal of the use of goods with an option to purchase or renew, where the economic conditions of the transaction do not have reasonable doubts as to whether one option or another option is exercised, it shall be deductible for the entity equivalent to the amortisation fees which, as provided for in paragraph 1, would correspond to those goods.

It will be assumed that there is no reasonable doubt that one or another option is to be exercised when the amount to be paid for its financial year is less than the amount resulting from the minorising of the purchase price or production cost of the goods in question. the sum of the maximum amortisation fees which would correspond to it within the time of the transfer.

The difference between the amounts payable to the transferor entity and the purchase price or production cost of the good will have for the entity the consideration of the expense to be distributed between the tax periods. within the duration of the lease.

When the property has been the subject of prior transfer by the transferee to the transferor, the transferee shall continue the depreciation of the transferee under identical conditions and on the same value prior to the transfer.

When provided for in this paragraph, the transferor entity shall write down the purchase price or production cost of the asset, deducted the value of the option, within the period of validity of the transaction.

The goods referred to in this paragraph may also be freely amortised in the assumptions provided for in the preceding paragraph.

4. The appropriations for the amortisation of the goodwill shall be deductible with the maximum annual limit of twenty-one part of the amount, provided that the following requirements are met:

(a) That the goodwill has been exposed by virtue of an acquisition for consideration.

(b) The acquiring institution is not in any of the cases provided for in Article 42 of the Trade Code in respect of the person or entity. For these purposes, it is understood that the cases of Article 42 of the Code of Commerce are those referred to in Section 1 of Chapter I of the rules for the formulation of the consolidated annual accounts, approved by Royal Decree 1815/1991, 20 December. The requirement provided for in this paragraph shall not apply with respect to the purchase price of the trading fund satisfied by the person or entity transmitted when it was acquired by persons or entities not related.

Funds for amortisation of goodwill that do not meet the requirements set out in paragraphs (a) and (b) above shall be deductible if they are proved to be in response to an irreversible depreciation of that.

5. Where the requirements laid down in paragraphs (a) and (b) of the preceding paragraph are met, the amounts shall be deductible with the maximum annual limit of one-tenth of their amount:

a) The amortization of the marks.

(b) The amortisation of the transfer rights, except that the contract has a duration of less than 10 years, in which case the maximum annual limit shall be calculated on the basis of that duration.

(c) The remaining assets of intangible fixed assets that do not have a certain date of extinction.

Where the requirements laid down in paragraphs (a) and (b) of the previous paragraph are not met, the above amounts shall be deductible if they are proved to be in response to the irreversible depreciation of the abovementioned items. property.

Article 12. Value adjustments: loss of value of assets.

(d) The envelopes for the coverage of the reduction in the value of the editorial, phonographic and audiovisual funds of the entities performing the corresponding production activity shall be deductible after two years since the placing on the market of the respective productions. Before such time, they may also be deductible if the depreciation is proven.

2. The envelopes for hedging the risk arising from the possible insolvencies of the debtors shall be deductible, where at the time of the tax accrual one of the following circumstances:

(d) The expiry of the six-month period from the expiration of the obligation.

(b) The debtor is declared to be in a competitive position.

c) That the debtor is prosecuted for the crime of raising goods.

(d) that the obligations have been legally claimed or are the subject of a judicial dispute or arbitration procedure for which the settlement depends on its recovery.

The appropriations in respect of the appropriations that are quoted shall not be deductible except that they are the subject of an arbitral or judicial procedure to be found on their existence or amount:

1. No. Those owed or secured by public law entities.

2. The entrenched by credit institutions or mutual guarantee societies.

3. º Guaranteed by real rights, domain reservation pact and right of retention, except in cases of loss or dejectification of the guarantee.

4. º Guaranteed by a credit or caution insurance contract.

5. º Those that have been the object of renewal or express extension.

Non-deductible the envelopes for the coverage of the risk arising from the possible insolvencies of persons or entities linked to the creditor, except in the case of a judicially declared insolvency, or the envelopes based on global estimates of the risk of customer and debtor insolvencies.

Regulations shall be established in respect of the determining circumstances of the risk arising from the possible insolvencies of the debtors of the financial institutions and those concerning the amount of the allocations for the coverage of that risk.

3. The deduction in respect of the depreciation of the securities representing the participation in own funds of institutions which are not part of an organised secondary market may not exceed the difference between the theoretical accounting value at the beginning and at the end of the financial year, account shall be taken of the contributions or contributions made to it. This same criterion shall apply to the shares in the corporate capital of the group or associated in the terms of the commercial law.

To determine the difference referred to in the preceding paragraph, the values shall be taken at the close of the financial year provided that they are collected on the balance sheets formulated or approved by the competent body.

Non-deductible amounts corresponding to the participation in resident entities in countries or territories that are regulated as tax havens, except that those entities consolidate their accounts with the of the entity making the envelope within the meaning of Article 42 of the Trade Code, nor those concerning securities representative of the share capital of the taxable person himself.

4. The depreciation of fixed income securities admitted to trading on organised secondary markets shall be deductible, with the limit of the overall depreciation suffered in the tax period by the set of fixed income securities. held by the taxable person admitted to trading on those markets.

Non-deductible the depreciation of securities with a certain amount of reimbursement that are not admitted to trading on secondary markets organised or admitted to trading on secondary markets organised in countries or territories which are regulated as tax havens.

5. Where securities are acquired representative of the participation in own funds of non-resident entities in Spanish territory, the income of which is eligible for the exemption provided for in Article 21 of this Act, the amount of the difference between the the acquisition price of the holding and its theoretical book value at the date of acquisition will be charged to the goods and rights of the non-resident entity in Spanish territory, in accordance with the criteria set out in the Royal Decree 1815/1991 of 20 December 1991 approving the rules for the formulation of annual accounts consolidated, and the part of the difference which would not have been imputed shall be deductible from the tax base, with the maximum annual limit of twenty-one part of its amount, unless it has been included on the basis of the deduction of Article 37 of the (a) law without prejudice to the provisions of the accounting rules of application.

The deduction of this difference shall be compatible, where applicable, with the envelopes referred to in paragraph 3 of this Article.

Article 13. Provision for risks and expenses.

1. The provisions for the coverage of foreseeable risks, eventual losses, expenses or probable debts shall not be deductible.

2. Notwithstanding the above, they shall be deductible:

(a) The allocations relating to liabilities arising from ongoing litigation or arising from duly justified payments or pending payments the amount of which is not definitively established.

(b) The envelopes for the recovery of the reverse asset, taking into account the reversion conditions laid down in the concession, without prejudice to the depreciation of the elements which are susceptible to it, in such a way that the the reversal fund balance is equal to the accounting value of the asset at the time of the reversal, including the amount of repairs required by the entity for the receipt of the asset.

c) The allocations that the companies engaged in the sea fishing and the marine and air navigation are destined to the provision for great repairs that it is necessary to realize because of the general revisions to that it obligatorily ships and aircraft have to be submitted.

(d) The allocations for the coverage of extraordinary repairs of assets other than those provided for in the preceding paragraph and of the costs of abandonment of economic holdings of a temporary nature, provided that correspond to a plan formulated by the taxable person and accepted by the tax administration.

The procedure for resolution of plans to be formulated will be set up.

e) The allocations to the technical provisions made by the insurance institutions, up to the amount of the minimum amounts established by the applicable rules.

The provision for the provision for premiums or fees to be charged shall be incompatible, for the same balances, with the envelope for the coverage of possible insolvencies of debtors.

(f) The allocations to be made by the mutual guarantee companies to the technical provisions fund, from their profit and loss account, until the said fund reaches the minimum required amount to which it refers Article 9 of Law 1/1994 of 11 March on the Legal Regime of Reciprocal Guarantee Societies. Allocations exceeding the mandatory amounts will be deductible by 75 percent.

Grants granted by public authorities to mutual guarantee companies and the income resulting from such subsidies will not be integrated into the tax base, provided that some and all of them are allocated to the technical provisions fund.

As provided for in this paragraph (f), it will also apply to the companies of reaffientalisation in respect of the activities that according to the provisions of article 11 of Law 1/1994, on the legal regime of the societies of guarantee They must necessarily integrate their social object.

g) The envelopes for the coverage of repair and repair guarantees, up to the amount necessary to determine a balance of the provision not exceeding the result of applying to the sales with live guarantees at the conclusion of the (a) the percentage determined by the proportion in which the expenditure incurred was found to meet the guarantees given in the tax period and in the previous two in relation to the sales with guarantees made in the such tax periods.

The provisions of the preceding paragraph will also apply to endowments for ancillary expense coverage for sales returns.

New establishment entities may also deduct the amounts referred to in the first subparagraph by fixing the percentage referred to in this respect for the expenses and sales made during the tax periods. which would have elapsed.

3. The contributions of pension scheme promoters regulated in the recast text of the Pension Plans and Funds Regulation Act will be deductible. These contributions shall be charged to each participant in the relevant party, except those made in an extraordinary manner pursuant to Article 5.3.d) of the aforementioned recast of the Law on the Regulation of Pension Plans and Funds. Contributions for the coverage of similar contingencies to that of pension schemes shall also be deductible, provided that the following requirements are met:

(a) That the persons to whom the benefits are linked are fiscally imputed.

a) That the right to the perception of future benefits is irrevocably transmitted.

c) The ownership and management of the resources in which these contributions consist.

Article 14. Non-deductible expenses.

1. They will not have the consideration of fiscally deductible expenses:

(a) Those representing a remuneration of own funds.

(b) Derivatives of the accounting of corporate tax. Revenue from such accounting shall not be taken into account.

(c) Criminal and administrative fines and penalties, the award surcharge, and the off-term filing fee for statements-settlements and autoliquidations.

d) Game losses.

e) Donations and liberalities.

This paragraph shall not be construed as meaning that public relations expenses with customers or suppliers or those that are used in accordance with customs and customs are carried out in respect of the staff of the undertaking or those carried out for the purposes of this paragraph. to promote, directly or indirectly, the sale of goods and the provision of services, or those which are correlated with revenue.

(f) The endowments to provisions or internal funds for the coverage of identical or similar contingencies to which they are the subject of the recast of the Law on the Regulation of Pension Plans and Funds.

g) the costs of services relating to operations carried out, directly or indirectly, with persons or entities resident in countries or territories which are regulated by their nature as tax havens; or they pay through persons or entities resident in them, except that the taxable person proves that the expense incurred is in response to an actual transaction or transaction.

The rules on international tax transparency shall not apply in relation to the income corresponding to expenses that are rated as fiscally non-deductible.

2. Accrued interest, both fixed and variable, will be deductible from a participative loan meeting the requirements set out in Article 20 (1) of Royal Decree Law 7/1996 of 7 June 1996 on urgent measures of a nature Fiscal policy and the promotion and liberalization of economic activity.

3. The amounts paid and the book value of the goods delivered as a donation shall be deductible as soon as they are applicable to the achievement of the purposes of the following donor entities:

a) Regional industrial development societies.

(b) Spanish sports federations, regional and local authorities, and sports clubs, in relation to the amounts received from public limited companies for the promotion and development of sports activities non-professional, provided that such entities have established an onerous contractual link necessary for the purpose and purpose of the relevant federations and sports clubs.

The transmissions referred to in this paragraph shall not determine for the entity the transmission of income, positive or negative, as provided for in paragraph 3 of the following Article.

Article 15. Valuation rules: general rule and special rules in the assumptions of lucrative and societarian transmissions.

1. The assets shall be valued at the purchase price or cost of production.

The amount of accounting revaluations shall not be integrated into the tax base, except where they are carried out under statutory or regulatory rules that require the inclusion of their amount in the accounting result.

The amount of the non-integrated revaluation in the tax base shall not determine a higher value for tax purposes of the revalued items.

2. The following heritage elements shall be valued for their normal market value:

a) Transmitted or acquired for a lucrative title.

b) The contributed to entities and the values received in consideration.

c) Transmitted to the partners due to dissolution, separation of these, reduction of capital with return of contributions, distribution of the premium of emission and distribution of benefits.

d) Transmitted by virtue of total or partial merger, absorption and excision.

e) Those acquired by permuse.

f) Purchased by exchange or conversion.

Normal market value shall be understood to have been agreed under normal market conditions between independent parties. The methods provided for in Article 16.3 of this Law shall be applied to determine this value.

3. In the cases referred to in paragraphs (a), (b), (c) and (d), the transmitting entity shall, in its taxable amount, integrate the difference between the normal market value of the transmitted elements and their book value.

In the assumptions provided for in paragraphs (e) and (f), institutions shall integrate into the tax base the difference between the normal market value of the items purchased and the book value of the delivered items.

In the acquisition for a profit, the acquiring institution will integrate into its taxable base the normal market value of the acquired asset.

The integration into the tax base of the income referred to in this Article shall be made in the tax period in which the transactions resulting from such income are carried out.

For the purposes of this paragraph, grants shall not be construed as a profit making.

4. In the reduction of capital with return of contributions, the excess of the normal market value of the items received on the accounting value of the holding shall be integrated into the taxable base of the partners.

The same rule applies in the case of distribution of the share or equity issue premium.

5. In the profit distribution, the normal market value of the items received shall be integrated into the partners ' taxable base.

6. In the dissolution of entities and separation of partners, the difference between the normal market value of the items received and the book value of the cancelled participation shall be integrated into the taxable base of the partners.

7. In the merger, total or partial absorption or division, the difference between the normal value of the market for the participation received and the book value of the cancelled participation shall be integrated into the taxable base of the partners.

8. The reduction of capital whose purpose is different from the return of contributions shall not determine for the members income, positive or negative, which are inclusive in the tax base.

9. The acquisition and redemption of shares or shares of their own shall not determine, for the acquiring institution, positive or negative income.

10. For the purposes of integrating into the tax base the positive income obtained in the transfer of assets of the fixed assets which have the nature of immovable property, the amount of the monetary depreciation shall be deducted produced from 1 January 1983, calculated in accordance with the following rules:

(a) The purchase price or production cost of the transferred real estate and the accumulated write-downs relative to those for the coefficients to be established in the corresponding Law of General Budget of the State.

(b) The difference between the amounts determined by the application of the provisions set out in the preceding paragraph shall be reduced by the accounting value of the transferred assets.

(c) The amount resulting from that operation shall be multiplied by a coefficient determined by:

1. º In numerator: own funds.

2. º In the denominator: the total liability minus the credit and treasury.

The determining factors of the coefficient shall be those during the holding time of the transferred assets or in the five financial years preceding the date of the transfer, whichever is less, the choice of the taxable person.

This paragraph does not apply when the coefficient is greater than 0.4.

Article 16. Valuation rules: linked operations.

1. The tax administration may, within the period of limitation, assess the normal market value of transactions carried out between persons or entities linked when the agreed valuation has been determined, considering the whole of the persons or entities involved, a tax in Spain which is lower than that which has been paid for by application of the normal market value or a deferral of such taxation.

The tax liability resulting from the administrative valuation will be charged, for all purposes, including the calculation of the interest for late payment and the calculation of the limitation period, for the tax period in which the operations with related persons or entities.

The administrative valuation will not determine the taxation of this tax or, where appropriate, the Income Tax of the Physical Persons, of a higher income than the one effectively derived from the operation for the whole of the entities that would have performed it.

The procedure will be established to practice valuation for the normal market value.

2. The following shall be considered as persons or entities:

a) A society and its partners.

b) A society and its advisors or administrators.

c) A society and the spouses, ascendants or descendants of the partners, counselors or administrators.

(d) Two companies which, in accordance with Article 42 of the Trade Code, fulfil the circumstances required to be part of the same group of companies, without being applicable to them, causes of exclusion provided for in Article 43 of that Code.

(e) A company and the partners of another company, where both companies belong to the same group of companies as defined in Article 42 of the Trade Code, without the causes of exclusion being applicable to these effects. provided for in Article 43.

(f) a company and the directors or directors of another company, where both belong to the same group of companies as defined in Article 42 of the Trade Code, without application of the causes of the exclusion provided for in Article 43.

g) A company and the spouses, ascendants or descendants of the partners or directors of another company when the two companies belong to the same group of companies as defined in Article 42 of the Trade Code, for the purposes of the exclusion referred to in Article 43 thereof.

h) A society and another society participated by the first indirectly in at least 25 percent of the share capital.

i) Two companies in which the same partners or their spouses, ascendants or descendants participate directly or indirectly in at least 25 percent of the share capital.

j) A company resident in Spanish territory and its permanent establishments abroad.

k) A foreign resident company and its permanent establishments in Spanish territory.

l) Two entities that are part of a group that is taxed in the cooperative group of companies.

m) Two societies, when one of them exercises the power of decision over the other.

In cases where the linkage is defined according to the socio-societal relationship, the participation must be equal to or greater than five percent or 1 percent if it is securities listed on a secondary market. organized.

For the purposes of this paragraph, the group of companies referred to in Article 42 of the Trade Code shall be understood to be the group referred to in Section 1 of Chapter I of the rules for the formulation of annual accounts. consolidated, approved by Royal Decree 1815/1991 of 20 December.

3. For the determination of the normal market value, the tax administration shall apply the following methods:

(a) Market price of the goods or services concerned or of other similar characteristics, making, in this case, the necessary corrections to obtain the equivalence, as well as to consider the particularities of the operation.

b) Substitute will be applicable:

1. Price of sale of goods and services calculated by increasing the acquisition value or production cost of those on the margin usually obtained by the taxable person in comparable transactions independent persons or entities or on the margin normally obtained by undertakings operating in the same sector in comparable transactions with persons or independent entities.

2. The resale price of goods and services established by its buyer, which is mined in the margin normally obtained by the buyer in comparable transactions with persons or entities independent or in the the margin normally obtained by undertakings operating in the same sector in comparable transactions with persons or independent entities, considering, where appropriate, the costs incurred by the said purchaser for the purposes of transform the above goods and services.

(c) Where none of the above methods apply, the price resulting from the distribution of the overall result of the transaction in question shall be applied, taking into account the risks assumed, the assets involved and the functions performed by the related parties.

4. The deduction of expenditure on contributions to research and development activities carried out by a related entity shall be subject to compliance with the following requirements:

(a) May be required under a prior written contract, identifying the project or projects to be carried out and giving the right to use its results.

(b) The criteria for the distribution of expenditure actually incurred by the entity carrying out the research and development activity correspond rationally to the content of the right to use the results of the projects or projects by the entities making the contributions.

5. The deduction of expenditure on management support services provided between related entities shall be conditional on the amount being established on the basis of a written contract concluded with a prior character, through which the criteria for the distribution of expenditure incurred for that purpose by the institution providing them. Such a pact or contract shall meet the following requirements:

a) Specify the nature of the services to be provided.

(b) It shall establish the methods of distribution of expenditure on the basis of continuity and rationality criteria.

6. Taxable persons may submit to the tax administration a proposal for the valuation of transactions carried out between persons or entities related to their performance. Such a proposal shall be based on the normal market value.

The proposal may also refer to the costs referred to in paragraphs 4 and 5.

The approval of the proposal shall have effect on operations which are initiated after the date on which the approval is made, provided that they are carried out in accordance with the terms of the approved proposal; and will be valid for three tax periods.

In the event of significant variation of the economic circumstances at the time of the proposal's approval, the proposal may be modified to bring it into line with the new economic circumstances.

The tax administration may establish agreements with the Administrations of other States for the purposes of determining the normal market value.

The proposals referred to in this paragraph may be deemed to be rejected after the time limit for resolution has elapsed.

The procedure for the resolution of the related transaction valuation proposals will be established.

7. In any event, it shall be understood that the consideration actually satisfied coincides with the normal market value in the transactions relating to the pursuit of professional activities or to the provision of personal work by natural persons to companies in which more than 50% of their income comes from the pursuit of professional activities, provided that the institution has personal and material resources for the development of its activities.

Article 17. Valuation rules: changes of residence, cessation of permanent establishments, operations carried out with or by persons or entities resident in tax havens and amounts subject to retention. Special rules.

1. The difference between the normal market value and the book value of the following assets shall be integrated into the tax base:

(a) Those which are the property of an entity resident in Spanish territory which transfers its residence outside the territory of Spain, except that such assets are affected by a permanent establishment located in the territory of Spain; Spanish of the aforementioned entity.

In this case it will be applicable to those heritage elements as provided for in Article 85.

(b) Those that are affected by a permanent establishment located in Spanish territory that cease their activity.

c) Those who are previously affected by a permanent establishment located in Spanish territory are transferred abroad.

2. The tax authorities may assess, by their normal market value, transactions carried out with or by persons or entities resident in countries or territories which are regulated as tax havens when the valuation agreed has determined a tax in Spain which is lower than that which has been applied for the application of the normal market value or a deferral of such taxation.

3. The recipient of the amounts to be retained on account of this tax shall account for the amount of the full consideration.

When the retention would not have been practiced or would have been less than due, the recipient will deduct from the fee the amount that should have been withheld.

In the case of legally established remuneration that would have been met by the public sector, the recipient will only be able to deduct the amounts effectively withheld.

When the full consideration cannot be proven, the tax administration may compute as an amount in full an amount that, once the withholding tax has been deducted from it, yields the effectively perceived amount. In this case, the difference between what was actually perceived and the full amount will be deducted from the fee, as a withholding tax.

4. The income to be shown as a result of the exercise of the right to rescue collective insurance contracts which implement pension commitments, in the terms provided for in the first provision of the recast text of the Law on the Regulation of the Pension Plans and Funds, shall not be subject to the Company Tax of the holder of the economic resources that in each case corresponds, in the following cases:

(a) For the full or partial integration of the commitments made in the policy into another insurance contract that meets the requirements of that additional provision first.

(b) For the integration into another collective insurance contract, of the rights that correspond to the worker under the original insurance contract in the case of termination of the employment relationship.

The assumptions set out in paragraphs (a) and (b) above will not alter the nature of the premiums in respect of their tax allocation by the company, nor the computation of the age of the premiums paid in the contract of original insurance. However, in the case referred to in subparagraph (b) above, if the premiums were not imputed, the company may deduct them on the occasion of this mobilisation.

No income shall be subject to the income that is evidenced as a result of the participation in benefits of insurance contracts that implement pension commitments in accordance with the provisions of the additional provision First of the recast text of the Law on the Regulation of Pension Plans and Funds, when such participation in benefits is intended to increase the benefits secured in such contracts.

5. Any positive or negative income arising from the payment of the tax debts referred to in Article 137 (2) of this Law and the tax debts referred to in Article 137 (2) shall not be included in the taxable amount. Article 73 of Law 16/1985 of 25 June of the Spanish Historical Heritage.

6. Subsidies granted to taxable persons operating on forest farms managed in accordance with technical plans for forest management, montastic management, dasocratic plans or plans of projects will not be integrated into the tax base. afforestation approved by the competent forest administration, provided that the average production period, according to the species concerned, determined in each case by the competent forest administration, is 20 years or more.

Article 18. Effects of the replacement of the book value by the normal market value.

Where an asset or a service has been valued for tax purposes by the normal market value, the acquiring institution of that entity shall, in its taxable amount, make the difference between that value and the value of acquisition, as follows:

(a) Dealing with assets belonging to the working asset, in the tax period in which they are motivated by the accrual of an income.

(b) Dealing with non-depreciable property assets that are members of the fixed assets, in the tax period in which they are transmitted.

(c) In the case of depreciable assets which are members of the fixed assets, the depreciation method used in respect of those referred to above is applied in the tax periods to which it is based. elements.

(d) For services, in the tax period in which they are received, except that their amount is to be incorporated into a patrimonial element in which case it will be provided for in the preceding paragraphs.

Article 19. Temporary imputation. Accounting enrollment of revenue and expenditure.

1. Revenue and expenditure shall be charged in the tax period in which they are incurred, taking into account the actual flow of goods and services which they represent, irrespective of the time when the monetary or financial current occurs, respecting the due correlation between each other.

2. The tax effectiveness of the criteria for the temporary allocation of revenue and expenditure, other than those provided for in the previous paragraph, used exceptionally by the taxable person in order to obtain the true picture of the assets of the financial situation and the results, in accordance with the provisions of Articles 34.4 and 38.2 of the Commercial Code, shall be subject to approval by the Tax Administration in the manner that it is regulated.

3. Expenditure which has not been accounted for in the profit and loss account or in a reserve account shall not be tax deductible if it is established by a statutory or statutory rule, with the exception of the provisions of the assets that can be freely amortized.

The revenue and expenditure accounted for in the profit and loss account in a tax period other than that in which the temporary allocation proceeds, as provided for in the preceding paragraphs, shall be charged in the corresponding tax period in accordance with the provisions set out in those paragraphs. However, in the case of expenditure attributable to the profit and loss account in a tax period subsequent to that in which it is imputed temporarily or from revenue charged in that account in a tax period, (a) the temporary imputation of each other shall be effected in the tax period in which the accounting allocation has been made, provided that a lower tax is not derived from that which has been paid for by application of the temporary imputation rules as provided for in the preceding paragraphs.

4. In the case of transactions in instalments or with deferred price, the income shall be read as a proportion of the amount of the revenue, except that the institution decides to apply the accrual criterion.

To be considered to be transactions in instalments or with deferred price, sales and execution of works the price of which is collected, in whole or in part, by successive payments or by a single payment, provided that the period between delivery and the expiration of the last or only term is higher than the year.

In the event of the endorsement, discount or early recovery of the deferred amounts, the income to be charged shall be deemed to have been obtained at that time.

This paragraph shall apply to any form in which the revenue and expenditure relating to the income concerned has been entered into account.

5. The allocations made to provisions and internal funds for the coverage of identical or similar contingencies to which they are the subject of the recast of the Law on the Regulation of the Pension Plans and Funds, will be imputable in the period the tax on which the benefits are paid. The same rule shall apply in respect of contributions for the coverage of contingencies similar to that of pension schemes which would not result in deductibles.

6. The recovery of the value of the assets which have been the subject of a value correction shall be charged in the tax period in which the recovery has occurred, be it in the institution which carried out the correction or in another related with it.

The same rule shall apply in the case of losses arising from the transfer of assets of the fixed assets which have been acquired again within six months of the date on which they were transferred. transmitted.

7. Regulations, for the purposes of determining the taxable amount, may be laid down for the application of the provisions of paragraph 1 to certain activities, operations or sectors.

8. In any event, the income derived from acquisitions of property assets for profit, both in cash and in kind, shall be charged in the tax period in which they are incurred, without prejudice to the provisions of the last paragraph of Article 15 (3).

9. Where provisions are removed, because they have not been applied for their purpose, without payment of an income account for the financial year, their amount shall be integrated into the taxable amount of the institution which has provided them, in so far as such provision has been made. considered deductible expense.

10. Where the institution is a beneficiary or has recognised the right to rescue life insurance contracts where, in addition, it assumes the risk of investment, it shall in any event integrate the difference between the liquidative value of the assets affected by the policy at the end and at the beginning of each tax period.

The provisions of this paragraph shall not apply to insurance which implements pension commitments undertaken by undertakings in the terms provided for in the first provision of the recast text of the Law on Regulation of the Pension Plans and Funds, and in their development regulations.

The amount of the revenue attributed will result in the performance of the revenue from the collection of the contracts.

Article 20. Subcapitalization.

1. Where the net remunerated, direct or indirect, of an entity, excluding financial institutions, with another or other persons or entities not resident in Spanish territory with which it is related, exceeds the result of applying the Coefficient 3 to the tax capital figure, accrued interest that corresponds to the excess shall be considered as dividends.

2. For the implementation of the above paragraph, both the net-paid borrowing and the tax capital will be reduced to its average state throughout the tax period.

Fiscal capital shall mean the amount of the institution's own funds, not including the result of the financial year.

3. Taxable persons may submit to the tax administration, in accordance with Article 16.6 of this law, a proposal for the application of a coefficient other than that laid down in paragraph 1. The proposal will be based on the debt that the taxable person would have been able to obtain under normal market conditions of persons or entities not related.

This paragraph shall not apply to operations carried out with or by persons or entities resident in countries or territories which are regulated as tax havens.

4. This Article shall not apply where the related entity not resident in Spanish territory is resident in another Member State of the European Union, except where it resides in a territory which is regulated as a paradise fiscal.

Article 21. Exemption to avoid double international economic taxation on dividends and foreign source income derived from the transmission of securities representative of the own funds of non-resident entities on Spanish territory.

1. Dividends or shares in profits of non-resident entities on Spanish territory shall be exempt, where the following requirements are met:

(a) That the percentage of direct or indirect participation in the capital or in the own funds of the non-resident entity is at least five per cent.

The corresponding share must be held uninterruptedly during the year preceding the day on which the profit to be distributed or, in the absence thereof, will be required to be maintained for the time required to complete this deadline.

For the purposes of calculating the time limit, account shall also be taken of the period in which the holding has been held uninterruptedly by other entities meeting the circumstances referred to in Article 42 of the Trade Code. to be part of the same group of companies.

(b) That the participating entity has been taxed by a foreign tax of an identical or similar nature to that tax in the financial year in which the profits to be distributed or in which it is taken have been obtained.

For these purposes, account shall be taken of foreign taxes which have been used to impose the income obtained by the participating entity, even in part, irrespective of the purpose of the tax. it is the own income, income or any other element of that income.

This requirement shall be deemed to be met, where the participating entity is resident in a country with which Spain has an agreement to avoid international double taxation, which is applicable to it and contains a clause information exchange.

In no case shall the provisions of this article apply when the participating entity is resident in a country or territory that is regulated as a tax haven.

c) That the benefits that are distributed or in which you participate will come from the realization of business activities abroad.

This requirement will only be considered met when at least 85 percent of the revenue from the exercise corresponds to:

1. Rentas which have been obtained abroad and which are not included among those income classes referred to in Article 107 (2) as being liable to be included in the taxable amount by application of the International tax transparency regime. In any event, the income derived from the participation in the profits of other entities, or the transmission of the corresponding securities or units, shall meet the requirements of the following paragraph

.

In particular, for these purposes, income from the following activities shall be deemed to be obtained abroad:

1. th wholesale trade, where the goods are made available to the acquirers in the country or territory in which the participating entity resides or in any other country or territory other than Spanish, provided that the operations are carried out through the organisation of personal and material means available to the participating entity.

2. Services, when used in the country or territory in which the participating entity resides or in any other country or territory other than Spanish, provided that they are carried out through the organization of personal means and materials available to the investee entity.

3. Credit and financial liabilities, where loans and loans are granted to persons or entities resident in the country or territory in which the participating entity resides or in any other country or territory other than the As long as the operations are carried out through the organisation of personal and material means available to the participating entity.

4. Underwriters and reinsurers, where the insured risks are in the country or territory in which the participating entity resides or in any other country or territory other than Spanish, provided that those risks are carry out through the organisation of personal and material means available to the participating entity.

2. "Dividends" or shares in profits of other non-resident entities in respect of which the taxable person has an indirect holding that meets the percentage and seniority requirements laid down in subparagraph (a); where the referred benefits and entities in turn comply with the requirements set out in the other paragraphs of this paragraph. Also, income derived from the transmission of the participation in such non-resident entities, where the requirements of the following paragraph are met.

For the application of this article, in the case of distribution of reserves, the designation contained in the social agreement will be considered and, failing that, the last amounts paid to these reserves will be considered to be applied.

2. The income obtained in the transmission of the participation in a non-resident entity in Spanish territory shall be exempt, where the conditions laid down in the previous paragraph are met. The same scheme shall apply to the income obtained in the case of separation of the partner or dissolution of the entity.

The requirement in paragraph (a) of the previous paragraph shall be met on the day on which the transmission occurs. The requirements laid down in paragraphs (b) and (c) shall be met in each and every exercise holding the holding. However, where the participation in the non-resident entity has been assessed in accordance with the rules of the special scheme of Chapter VIII of Title VII of this Law, the exemption shall apply under the conditions laid down in paragraph (d) of this Act. This section.

The exemption shall not apply where the acquirer resides in a country or territory that is regulated as a tax haven.

In the following scenarios, the application of the exemption will have the following specialties:

(a) Where the non-resident entity holds, directly or indirectly, shares in entities resident in Spanish territory or assets located in that territory and the sum of the market value of each other exceeds 15% percent of the market value of its total assets.

In this case, the exemption will be limited to that part of the income obtained that corresponds to the net increase of the undistributed profits generated by the participating entity during the holding time of the participation.

(b) When the taxable person has made any value correction on the transmitted share that would have been fiscally deductible.

In this case, the exemption shall be limited to the excess of the income obtained in the transmission on the amount of such correction.

(c) Where the holding in the non-resident entity has been previously transmitted by another entity which meets the circumstances referred to in Article 42 of the Trade Code to be part of the same group of companies with the taxable person, having obtained a negative income that would have been integrated into the tax base of this tax.

In this case, the positive income obtained in the transmission of the participation will be taxed up to the amount of the negative income obtained by the other entity of the group.

(d) Where participation in the non-resident entity has been assessed in accordance with the rules of the special scheme of Chapter VIII of Title VII of this Law and the application of those rules, including in a previous transmission, has determined the non-integration of income in the tax base of this tax, of the Income Tax of the Physical Persons or the Income Tax of non-residents, derived from:

1. The transmission of participation in a resident entity in Spanish territory.

2. The transmission of participation in a non-resident entity that does not meet the requirements referred to in paragraphs (b) and (c) of paragraph 1 above.

3. The non-cash contribution of other heritage elements.

In this case, the exemption will only apply to the income corresponding to the positive difference between the transfer value of the holding in the non-resident entity and the normal market value of the non-resident entity at the time of its acquisition by the transmitting entity. The rest of the income obtained in the transmission will be integrated into the taxable base of the period.

3. The exemption provided for in this Article shall not apply:

(a) To foreign source income obtained by economic, Spanish and European interest groups, and by temporary joint ventures.

(b) To foreign source income from entities that develop their activity abroad for the principal purpose of enjoying the tax regime provided for in this article. It shall be presumed that that circumstance is present when the same activity as the subsidiary of the foreign subsidiary, in relation to the same market, has been developed in Spain by another entity, which has ceased in the same market. the activity and that it shall keep with that one of the relations referred to in Article 42 of the Code of Commerce, unless there is evidence of another valid economic motive.

(c) To foreign source income that the entity integrates in its tax base and in relation to which it chooses to apply, if applicable, the deduction provided for in Articles 31 or 32 of this Act.

4. In any event, if the exemption from foreign source dividends had been applied, the depreciation of the holding may not be included in the tax base, whatever the form and the tax period in which it is shown, up to the amount of such dividends.

Also, if a negative income was obtained in the transmission of the holding in a non-resident entity that would have been previously transmitted by another entity that meets the circumstances referred to in Article 42 of the Trade code to be part of the same group of companies with the taxable person, such negative income shall be reduced by the amount of the positive income obtained in the preceding transmission and to which the exemption would have been applied.

Article 22. Exemption from certain income earned abroad through a permanent establishment.

1. Income obtained abroad shall be exempt through a permanent establishment located outside the Spanish territory where the following requirements are met:

(a) That the income of the permanent establishment proceeds from the conduct of business activities abroad, as provided for in Article 21 (1) (c) of this Law.

(b) that the permanent establishment has been taxed by a tax of an identical or similar nature to that tax, in the terms of the preceding article, and which is not situated in a qualified country or territory regulated as a tax haven.

2. Where, in previous tax periods, the permanent establishment had obtained net negative income which would have been integrated into the entity's taxable base, the exemption provided for in this Article or the deduction referred to in the Article 31 of this Law shall apply only to positive income obtained after the time when they exceed the amount of such negative income.

3. For this purpose, an entity shall be deemed to be operating by means of a permanent establishment abroad where, by any title, it has, on a continuous or regular basis, outside the Spanish territory of facilities or workplaces in those who perform all or part of their activity. In particular, it shall be understood that they constitute permanent establishments as referred to in Article 13 (1) (a) of the recast text of the Non-Resident Income Tax Act, approved by Royal Decree Legislative 5/2004 of 5 March. If the permanent establishment is located in a country with which Spain has an agreement to avoid double international taxation, which will be applicable to it, it will be as far as it is.

4. The arrangements provided for in this Article shall not apply where the circumstances provided for in paragraph 3 of the preceding Article are given in respect of the taxable person or of the income obtained abroad. The option referred to in paragraph (c) of that paragraph shall be exercised for each establishment situated outside the Spanish territory, even if there are several in the territory of a single country.

Article 23. Deduction for investments for the implementation of companies abroad.

1. The amount of the investments actually made in the financial year for the acquisition of shares in the own funds of non-resident companies in Spanish territory in order to reach the majority of the the voting rights in them, provided that the following requirements are met:

(a) That the participating company develops business activities abroad, in accordance with the terms set out in paragraph 1 (c) of Article 21 of this Law. The deduction shall not be paid where the principal activity of the investee is a real estate, financial or insurance undertaking, or where it consists in the provision of services to related entities resident in Spanish territory.

b) That the activities developed by the participating company have not been previously exercised under another ownership.

(c) That the participating company does not reside in the territory of the European Union or in any of the territories or countries that are regulated as a tax haven.

This deduction will not be conditional upon your accounting imputation on the profit and loss account.

2. The maximum annual amount of the deduction shall be EUR 30,050,605,22 without exceeding 25% of the tax base of the tax period prior to the calculation of the tax.

The amount of the deduction shall be reduced by the amount of the depreciation of the value of the holding held in non-resident companies that have been fiscally deductible.

If in connection with an investment the requirements established for the practice of the deduction referred to in this article and the deduction provided for in Article 37 of this law are met, the entity may choose to apply a another, even distributing the basis of the deduction between the two. The same amount of the investment shall not be entitled to deduction for both concepts.

3. The amounts deducted shall be integrated into the taxable amount, by equal parts, in the tax periods concluded in the following four years. If, in any of these tax periods, the depreciation of the value of the holding in those companies is produced, the amount of such depreciation which has been fiscally deductible shall be included in its taxable amount until it has been completed. the amount of the deduction.

The degree of participation and the other requirements required for the deduction must be met for at least four years. If this is not the case, in the tax period in which the non-compliance occurs, the entire amount of the amount deducted that would be pending for such integration shall be integrated into the tax base.

4. The provisions of this Article shall not apply in relation to those subsidiary entities which carry out their activity abroad for the principal purpose of enjoying the deduction provided for therein. It shall be presumed that that circumstance is present when the same activity as the subsidiary of the foreign subsidiary, in relation to the same market, has been developed before in Spain by another entity which has ceased such activity and to keep with that one of the relations referred to in Article 42 of the Trade Code, unless there is evidence of another valid economic motive.

Article 24. Benefit-social work of savings banks.

1. The amounts that the savings banks will be able to allocate from their results to the financing of social-welfare works, in accordance with the rules governing them, will be deductible.

2. The amounts allocated to the social welfare work of the savings banks shall be at least 50%, in the same financial year to which the allocation corresponds, or in the immediate following, to the implementation of the investments concerned, or to cover the costs of supporting the institutions or establishments covered by it.

3. They will not be integrated into the tax base:

(a) The maintenance costs of the work-social work, even if they exceed the allocations made, without prejudice to the consideration of the application of future allocations.

b) The income derived from the transmission of investments affected by the work-social work.

Article 25. Compensation of negative taxable bases.

1. Negative taxable bases which have been the subject of liquidation or self-settlement may be compensated by the positive income of the tax periods concluded in the immediate and successive 15 years.

2. The negative taxable amount eligible for compensation shall be reduced by the amount of the positive difference between the value of the members ' contributions, made by any title, corresponding to the share acquired and their value acquisition, where the following circumstances are present:

(a) The majority of the share capital or the rights to participate in the results of the entity that has been acquired by a person or entity or by a set of related persons or entities, after the conclusion of the tax period to which the negative tax base corresponds.

(b) The persons or entities referred to in the preceding paragraph would have had a share of less than 25% at the time of the conclusion of the tax period to which the negative tax base corresponds.

(c) The entity would not have made economic holdings within six months prior to the acquisition of the holding by the majority of the share capital.

3. New establishment entities may compute the period of compensation referred to in paragraph 1 from the first tax period for which the income is positive.

4. The provisions of the preceding paragraph shall apply to the negative tax bases resulting from the operation of new motorways, tunnels and toll roads carried out by the concessionaires of such activities.

5. The taxable person must prove the origin and the amount of the negative taxable bases whose compensation is intended, by means of the exhibition of liquidation or self-validation, the accounting and the appropriate documentary media, whichever is the the exercise in which they originated.

TITLE V

Tax period and tax accrual

Article 26. Tax period.

1. The tax period shall coincide with the financial year of the institution.

2. In any case, the tax period will end:

a) When the entity is exting.

(b) Where a change of residence of the resident entity is taking place in Spanish territory abroad.

(c) When the transformation of the entity's legal form occurs and this determines the non-attachment to this tax of the resulting entity.

In order to determine the tax base corresponding to this tax period, the entity shall be deemed to have been dissolved with the effects set out in Article 15.3 of this Act.

(d) Where the transformation of the legal form of the entity occurs and determines the modification of its tax rate or the application of a special tax regime.

The income derived from the transmission of existing assets at the time of the transformation, carried out after the transformation, shall be understood to be generated in a linear manner, unless otherwise proved, throughout the period of the ownership of the transmitted element. The part of such income generated up to the time of the conversion shall be taxed at the rate of the levy and the tax system which would have been the entity of having retained its original legal form.

3. The tax period shall not exceed 12 months.

Article 27. Tax accrual.

The tax will become due on the last day of the tax period.

TITLE VI

Tax Debt

CHAPTER I

Type of charge and full quota

Article 28. The type of lien.

1. The general tax rate for taxable persons in this tax will be 35 percent.

2. They will be taxed at the rate of 25 percent:

(a) General insurance mutuals, social security mutual societies and mutual occupational accidents and occupational diseases which meet the requirements laid down by their regulatory regulations.

(b) Mutual guarantee companies and reincorporation companies governed by Law 1/1994 of 11 March on the legal status of mutual guarantee companies entered in the special register of the Bank of Spain.

(c) Credit cooperative societies and rural boxes, except as regards extracooperative results, which will be taxed at the general rate.

d) Professional colleges, business associations, official chambers, workers ' unions and political parties.

e) Non-profit entities to which the tax regime laid down in Law 49/2002 of 23 December of the tax regime of non-profit-making entities and tax incentives does not apply patronage.

f) The employment promotion funds constituted under Article 22 of Law 27/1984 of 26 July on conversion and reindustrialisation.

g) Unions, federations and associations of cooperatives.

3. Tax-protected cooperative societies shall be taxed at 20%, except as regards extracooperative results, which shall be taxed at the general rate.

4. The entities to which the tax regime established in Law 49/2002, of December 23, of the tax regime of the non-profit entities and of the tax incentives to patronage, shall be taxed at 10 percent.

5. They will be taxed at the rate of one percent:

(a) Variable capital investment companies governed by the Law on Collective Investment Institutions, provided that the number of shareholders required is at least that provided for in the fourth paragraph of Article 9 of the that law.

(b) Financial investment funds provided for in the law referred to above, provided that the number of members required is at least that provided for in Article 5 (4) of that law.

(c) Real estate investment companies and real estate investment funds regulated in that law, provided that the number of shareholders or members required is at least that provided for in the fourth paragraphs of the Articles 5 and 9 of that law and which, with the character of non-financial collective investment institutions, have as their exclusive object the investment in any type of immovable property of an urban nature for their lease and, in addition, the dwellings, the student residences and the residences of the third age, in the terms that They shall be established jointly, together with at least 50% of the total assets.

The application of the tax rates provided for in this paragraph shall require that the immovable property which is part of the assets of the collective investment institutions referred to in the preceding paragraph shall not be used until the three years have elapsed since its acquisition, except that, on an exceptional basis, the National Securities Market Commission is expressly authorised to do so.

d) The public nature regulation fund of the mortgage market, as set out in Article 25 of Law 2/1981 of 25 March, on the regulation of the mortgage market.

6. They will pay the zero per cent rate the pension funds regulated in the recast text of the Pension Plans and Funds Regulation Act.

7. The rate of 40% will be taxed by the entities involved in the exploration, investigation and exploitation of oil deposits and underground hydrocarbons in the terms established in Law 34/1998 of 7 October of the Sector of Hydrocarbons.

The activities relating to the refining and any other activities other than those of exploration, research, exploitation, transport, storage, purification and sale of extracted hydrocarbons, or of the storage activity Underground hydrocarbons owned by third parties shall be subject to the general rate of charge.

To entities that exclusively develop the activity of storage of hydrocarbons owned by third parties, the special regime established in Chapter X of Title VII of this Law shall not apply to them and shall be taxed at 35 percent rate.

8. They shall be taxed at the rate of excise duty resulting from the provisions of Article 43 of Law 19/1994 of 6 July 1994 amending the Economic and Fiscal Regime of the Canary Islands, the entities of the Special Area of the Canary Islands, on the basis of the basic the taxable amount corresponding to the operations carried out effectively and materially in the geographical area of the Special Area of the Canary Islands.

Article 29. Full quota.

Full quota is the amount resulting from applying to the tax base the rate of charge.

CHAPTER II

Deductions to avoid double taxation

Article 30. Deduction to avoid internal double taxation: dividends and internal source capital gains.

1. Where dividends or shares in profits of other entities resident in Spain are included in the income of the taxable person, 50% of the full share corresponding to the tax base derived from those dividends or Profit shares.

The tax base derived from dividends or stakes in profits will be the full amount of dividends.

2. The deduction referred to in the preceding paragraph shall be 100% where the dividends or profit shares come from entities in which the percentage of direct or indirect participation is equal to or greater than five per cent. (a), provided that such a percentage has been kept uninterruptedly during the year preceding the day on which the benefit to be distributed or, failing that, is payable for as long as it is necessary to complete one year. The deduction shall also be 100% in respect of the participation in profits from mutual insurance companies, social security institutions, mutual guarantee companies and associations.

3. The deduction shall also apply in the case of the settlement of companies, the separation of members, the acquisition of shares or units of their own for redemption and dissolution without liquidation in merger, total division or the total disposal of the assets and liabilities, in respect of the calculated income derived from those transactions, in the part corresponding to the undistributed profits, even those which have been incorporated in the capital, and to the income which the company which performs the operations referred to in the preceding paragraph, must be incorporated into the tax base of the agreement with the provisions of article 15.3 of this law.

4. The deduction provided for in the preceding paragraphs shall not apply in respect of the following

:

(a) Those arising from the reduction of the capital or the distribution of the premium for the issue of shares or units, without prejudice to the provisions of the last subparagraph of the previous paragraph.

When, in conjunction with the operations referred to in the preceding paragraph, the distribution of dividends or participations in profits occurs, the deduction shall be applied to them in accordance with the rules laid down therein. Article.

(b) Those provided for in the preceding paragraphs, where prior to their distribution there has been a reduction in capital to constitute reserves or to compensate for losses, the transfer of the issue premium to reserves, or a the contribution of the partners to replenish the equity, up to the amount of the reduction, transfer or contribution.

The provisions of the preceding paragraph shall not apply in respect of distributed income which would have been incorporated in the tax base without having been produced in respect of the compensation of negative taxable bases, except that the non-compensation would have been derived from the provisions of Article 25 (2) of this Law.

c) Those distributed by the public nature regulation fund of the mortgage market.

(d) dividends or shares in profits corresponding to shares or shares acquired within two months prior to the date on which they were satisfied when after that date, within the same period, a transmission of homogeneous values occurs.

e) When the distribution of the dividend or the profit share does not determine the income integration in the tax base or where such distribution has resulted in a depreciation in the value of the stake. In this case the recovery of the value of the stake will not be integrated into the tax base.

The above paragraph will not apply when:

1. The taxable person proves that an amount equivalent to the depreciation of the value of the holding has been integrated into the tax base of the Company Tax on any of the tax rates provided for in the Article 28 (1), (2) and (7) or Article 114 of that law, in respect of income obtained by successive entities which own the holding on the occasion of their transfer, and which has not been entitled to the deduction by double taxation of capital gains.

In this case, where the above entities owning the holding have applied to the income for them obtained on the occasion of their transfer the deduction for reinvestment of extraordinary profits, the Deduction shall be 18 per cent of the amount of the dividend or of the profit share.

The deduction will be partially practiced when the proof referred to in this paragraph is partial.

2. The taxable person proves that an amount equivalent to the depreciation of the value of the participation has been integrated into the tax base of the Income Tax of the Physical Persons, in terms of income obtained by the successive physical persons who own the participation, on the occasion of their transmission.

The deduction will be partially practiced when the proof referred to in this paragraph is partial.

In this case, the deduction may not exceed the amount resulting from applying to the dividend or the participation in profits the rate of charge that in the Income Tax of the Physical Persons corresponds to the capital gains integrated into the special part of the tax base.

(f) The dividends or shares in profits corresponding to the Canary Special Zone entities from profits that have been taxed at the rates indicated in Article 28 (8) of this Law. For these purposes, the income received shall be deemed to be first of such profits.

5. Where the income of the taxable person is calculated as a result of the transfer of securities representing the capital or the own funds of entities resident in Spanish territory which are taxed at the general rate of charge or at the rate of 40 (a) a percentage shall be deducted from the full quota as a result of applying the rate of charge to the net increase of undistributed profits, even those which have been incorporated in the share capital, corresponding to the share transmitted, generated by the participating entity during the holding time of that holding or the amount of the calculated income if this is less.

This deduction will be practiced whenever the following requirements are met:

a) What, the percentage of participation, direct or indirect, before the transmission is equal to or greater than five percent.

(b) That percentage has been continuously owned during the year before the day the participation is transmitted.

When, due to the date of acquisition of the holding, the amount of the undistributed profits on the date of acquisition of the holding cannot be determined, the securities shall be presumed to have been acquired for their value theoretical.

The application of the present deduction will be incompatible with the reinvestment deferral provided for in Article 21 of Law 43/1995 of 27 December 1995 on the Company Tax, in the part corresponding to the income that has enjoyed the deduction provided for in this paragraph.

The provisions of this paragraph shall also apply to the transmission of securities representative of the capital of the entities referred to in Article 28 (2) (b) of this Act, and shall be applied to them. effects, the rate of charge referred to in paragraph 2.

The deduction provided for in this paragraph shall not apply in respect of the part of the net increase in undistributed profits corresponding to non-integrated income in the taxable base of the investee due to the compensation of negative taxable bases.

6. The amounts not deducted for the full quota shortfall may be deducted from the full quotas for the tax periods concluded in the immediate and successive seven years.

Article 31. Deduction to avoid international double taxation: tax borne by the taxable person.

1. Where, in the taxable amount of the taxable person, income obtained and taxed abroad is included, the fee shall be deducted from the total of the following two quantities:

(a) The effective amount of the foreign satisfaction by reason of lien of a nature identical or analogous to this tax.

Non-paid taxes will not be deducted under exemption, bonus or any other tax benefit.

A convention being applied to avoid double taxation, the deduction may not exceed the tax that corresponds to that tax.

(b) The amount of the full quota that Spain would have to pay for the above income if it had been obtained in Spanish territory.

2. The amount of tax paid abroad shall be included in the income for the purposes set out in the preceding paragraph and shall also form part of the tax base, even if it is not fully deductible.

3. Where the taxable person has obtained a number of foreign income in the tax period, the deduction shall be made by grouping those from the same country except for the income of permanent establishments, which shall be taken into account separately for each one of these.

4. The amounts not deducted for the full quota insufficiency may be deducted in the tax periods concluded in the immediate and successive 10 years.

Article 32. Deduction to avoid international double taxation: dividends and profit shares.

1. Where dividends or shares in the profits paid by a non-resident entity in Spanish territory are computed in the tax base, the tax actually paid by the latter in respect of the profits from the profits shall be deducted which dividends are paid, in the corresponding amount of such dividends, provided that the amount is included in the taxable amount of the taxable person.

For the application of this deduction it will be necessary for direct or indirect participation in the capital of the non-resident entity to be at least five per cent, and that the non-resident entity would have been held uninterruptedly. during the year preceding the day on which the benefit to be distributed or, failing that, is payable for as long as it is necessary to complete one year.

In the case of distribution of reserves, the designation contained in the social agreement shall be considered, the last amounts paid to those reserves being applied.

2. It will also have the tax consideration actually paid for the tax paid by the entities directly involved in the company that distributes the dividend and for which, in turn, they are directly involved in the dividend. the party responsible for the benefits in respect of which the dividends are paid provided that such shares are not less than five per cent and satisfy the requirement referred to in the preceding paragraph in respect of tenure time of the participation.

3. This deduction, together with the one set out in the previous article in respect of dividends or shares in profits, may not exceed the full quota which in Spain would be payable for such income if it had been obtained in Spanish territory.

Excess over such limit will not have the consideration of fiscally deductible expense.

4. The amounts not deducted for the full quota insufficiency may be deducted in the tax periods concluded in the immediate and successive ten years.

5. It shall not be integrated into the taxable base of the taxable person who receives the dividends or the profit share the depreciation of the share arising from the distribution of profits, whatever the form and the tax period in question. that the depreciation is made manifest, except that the amount of the abovementioned benefits has been taxed in Spain through any transfer of the share.

CHAPTER III

Bonuses

Article 33. Bonus for rent obtained in Ceuta and Melilla.

1. It will have a 50 percent bonus, the full share portion corresponding to the income obtained by entities that operate effectively and materially in Ceuta, Melilla or their dependencies.

The entities referred to in the preceding paragraph shall be as follows:

(a) Spanish entities domiciled in such territories.

(b) Spanish entities domiciled in tax outside those territories and operating in them through establishment or branch.

(c) Foreign entities not resident in Spain and operating in those territories by permanent establishment.

2. Effective and materially realized operations in Ceuta and Melilla or their dependencies shall mean those that close a business cycle that determines economic performance in these territories.

It shall not be estimated to measure such circumstances in the case of isolated operations for the extraction, manufacture, purchase, transport, entry and exit of genera or effects in those operations and, in general, where operations are not determine on their own income.

3. Exceptionally, for the determination of the income attributable to Ceuta and Melilla, obtained by fishing entities, the following percentages shall be allocated:

a) 20 percent of the total income to the territory in which the headquarters of the effective address is located.

(b) 40% of this income shall be distributed in proportion to the volume of landings of catches made in Ceuta and Melilla and in different territory.

Exports will be imputed to the territory in which it radiuses the headquarters of effective management.

c) The remaining 40 percent, in proportion to the book value of vessels as registered in Ceuta and Melilla and in different territories.

The percentage provided for in paragraph (c) shall apply only where the entity concerned has the headquarters of effective management in Ceuta and Melilla. In another case this percentage will increase the percentage of paragraph (b).

4. In maritime navigation entities, the income shall be attributed to Ceuta and Melilla on the basis of the same criteria and percentages as applicable to fishing undertakings, replacing the reference to landings of the catch by that of passages, freight and leases there contracted.

Article 34. Bonus for export activities and provision of local public services.

1. The part of the total quota corresponding to the income from the export activity of Spanish cinematographic or audiovisual productions, books, fasciculties and elements whose content is not less than 99% of the total normally homogeneous or edited in conjunction with those, as well as any editorial expressions of a didactic character, provided that the corresponding profits are reinvested in the same tax period to which the allowance is made or in the following, in the acquisition of elements affected to the realization of the aforementioned activities or any of the assets referred to in Articles 37, 38 and 39 of this Act.

The items on which the reinvestment materializes shall not benefit from the deduction provided for in Articles 37, 38 and 39.

The part of the full quota derived from the grants awarded for the performance of the activities referred to in this paragraph shall not be the subject of a bonus.

2. It shall be awarded 99% of the share of the full share corresponding to the income derived from the provision of any of the services referred to in Article 25 (2) or (a), (b) and (c) of Article 36 of the Treaty. Law 7/1985 of 2 April, Regulation of the Local Government Bases, of powers of local, municipal and provincial local authorities, except where they are operated by the joint venture or private equity system.

The allowance shall also apply where the services referred to in the preceding paragraph are provided by entities wholly dependent on the State or the Autonomous Communities.

CHAPTER IV

Deductions to incentivize the realization of certain activities

Article 35. Deduction for research and development activities and technological innovation.

1. Deduction for research and development activities.

Conducting research and development activities will entitle you to practice a deduction of the full quota, under the conditions set out in this section.

a) Concept of research and development.

A planned original inquiry will be considered to pursue the discovery of new knowledge and superior understanding in the scientific and technological field, and to develop the application of the results of the research or any other type of scientific knowledge for the manufacture of new materials or products or for the design of new processes or production systems, as well as for the substantial technological improvement of materials, products, pre-existing systems or processes.

Research and development activities will also be considered the materialization of new products or processes in a plan, scheme or design, as well as the creation of a first non-marketable prototype and the projects of initial demonstration or pilot projects, provided that they cannot be converted or used for industrial applications or for commercial exploitation.

The design and development of the sample for the launch of new products will also be considered as research activity. For these purposes, the introduction of a new product into the market and as a new product, the novelty of which is essential and not merely formal or accidental, will be understood.

Research and development will also be considered to be the concept of advanced software, as long as it represents significant scientific or technological progress through the development of new theorems and algorithms or by means of the creation of new operating systems and languages, or whenever it is intended to make it easier for disabled people to access the services of the information society. Routine or routine software-related activities are not included.

b) Base of the deduction.

The basis of the deduction shall be the amount of research and development expenditure and, where appropriate, investments in items of tangible and intangible fixed assets excluding buildings and land.

Research and development expenses shall be considered as incurred by the taxable person, including the write-downs of the goods affected by the said activities, as soon as they are directly related to those activities and they are effectively applied to the performance of these, consisting specifically of individual projects.

The basis of the deduction will be reduced by 65 percent of the grants received for the promotion of such activities and imputable as income in the tax period.

The research and development costs associated with activities carried out abroad may also be deducted as long as the research and development activities are carried out in Spain and not exceed 25 percent of the total amount invested.

They will also have the consideration of research expenditure and development of the amounts paid for the performance of these activities in Spain, on behalf of the taxable person, individually or in collaboration with others entities.

Investments shall be understood to be realised where the assets are placed under operating conditions.

c) Deduction percentages.

1. º 30 percent of the expenses incurred in the tax period for this concept.

Where expenditure incurred in carrying out research and development activities in the tax period is greater than the average of the expenditure incurred in the previous two years, the percentage shall apply. set in the preceding paragraph up to that mean, and 50 percent over the excess over this.

In addition to the deduction that comes in accordance with the foregoing paragraphs, an additional deduction of 20 percent of the following period expenses shall be practiced:

The staff costs of the entity for qualified researchers assigned exclusively to research and development activities.

The expenditure related to research and development projects contracted with universities, public research bodies or innovation and technology centres, recognised and registered as such according to the Royal Decree 2609/1996, of December 20, for which the centres of innovation and technology are regulated.

2. º 10% of investments in elements of tangible and intangible fixed assets, excluding buildings and land, provided that they are exclusively affected by research and development activities.

The deduction provided for in the preceding paragraph shall be compatible with that provided for in Article 42 of this Law and incompatible for the same investments with the other deductions provided for in the other Articles of this Act. chapter.

The elements in which the investment materializes must remain in the assets of the taxable person, except for justified losses, until they meet their specific purpose in the research and development activities, except that their useful life in accordance with the method of amortisation, as provided for in Article 11 (1) (a), which is applied, is lower.

2. Deduction for technological innovation activities.

The performance of technological innovation activities will entitle you to practice a deduction of the full quota under the conditions set out in this section.

a) Concept of technological innovation.

Technological innovation will be considered the activity whose result is a technological advance in the production of new products or production processes or substantial improvements of the existing ones. New products or processes whose characteristics or applications, from the technological point of view, differ substantially from those previously existing shall be considered new.

This activity will include the materialization of new products or processes in a plane, scheme or design, as well as the creation of a first non-marketable prototype and initial demonstration projects or pilot projects, provided that they cannot be converted or used for industrial applications or for commercial exploitation.

Also included are technological diagnostic activities aimed at the identification, definition and orientation of advanced technological solutions performed by the entities referred to in paragraph b. 1. next, regardless of the results at which they culminate.

b) Base of the deduction.

The basis of the deduction shall be the amount of the period's expenditure on technological innovation activities corresponding to the following concepts:

1. Projects to be carried out by universities, public research bodies or centres of innovation and technology, recognised and registered as such according to the aforementioned Royal Decree 2609/1996 of 20 December.

2. Industrial design and engineering of production processes, which will include the design and elaboration of plans, drawings and supports to define the descriptive elements, technical specifications and characteristics necessary for the manufacture, test, installation and use of a product.

3. Advanced technology acquisition in the form of patents, licenses, know-how and designs. The deduction of amounts paid to persons or entities linked to the taxable person shall not be entitled to the deduction. The base corresponding to this concept shall not exceed the amount of EUR 1 million.

4. Obtaining the certificate of compliance with the quality assurance standards of the ISO 9000 series, GMP or the like, without including those costs related to the implementation of those standards.

Technological innovation costs are considered to be incurred by the taxable person as soon as they are directly related to those activities and are effectively applied to the performance of these activities, specifically consisting of individualised by projects.

The costs of technological innovation corresponding to activities carried out abroad may also be the subject of the deduction as long as the main technological innovation activity is carried out in Spain and not exceed 25 percent of the total amount invested.

Also, the amounts paid for the performance of these activities in Spain will be considered technological innovation expenses, on behalf of the taxable person, individually or in collaboration with others. entities.

To determine the basis of the deduction, the amount of technological innovation costs will be reduced by 65 percent of the grants received for the promotion of these activities and imputable as income in the period tax.

c) Deduction percentages.

The deduction percentages applicable to the deduction base set out in paragraph (b) shall be 15 per cent for the intended concepts in their ordinal 1. º and 10 per cent for those foreseen in the remaining ordinals.

3. Exclusions.

Not to be considered research and development or technological innovation activities consisting of:

(a) Activities that do not involve a significant scientific or technological novelty. In particular, routine efforts to improve the quality of products or processes, the adaptation of an existing product or production process to the specific requirements imposed by a customer, the periodic or seasonal changes, as well as as the aesthetic or minor modifications of existing products to differentiate them from similar ones.

b) Industrial production activities and provision of services or distribution of goods and services. In particular, the planning of productive activity: the preparation and the start of production, including the setting of tools and other activities other than those described in subparagraph (b) of the previous paragraph; incorporation or modification of installations, machines, equipment and systems for production that are not affected by activities classified as research and development or innovation; the solution of technical problems of production processes interrupted; quality control and standardisation of products and processes; prospecting in (a) the establishment of networks or facilities for the marketing of social sciences and market research; training and training of personnel related to such activities.

c) The exploration, survey, or prospecting of minerals and hydrocarbons.

4. Application and interpretation of the deduction.

(a) For the purposes of applying the deduction provided for in this Article, taxable persons may provide a reasoned report issued by the Ministry of Science and Technology, or by a body attached to it, on compliance with the the scientific and technological requirements required in paragraph 1 (a) of this Article to qualify the activities of the taxable person as research and development, or in paragraph (a) of paragraph 2, to qualify them as innovation; taking into account in both cases the provisions of paragraph 3.

This report will be binding on the tax administration.

(b) The taxable person may submit consultations on the interpretation and application of this deduction, which shall be binding on the tax administration, in accordance with the terms laid down in Article 88. and 89 of Law 58/2003, of December 17, General Tax.

For these purposes, taxable persons may provide a reasoned report issued by the Ministry of Science and Technology, or by a body attached to it, on compliance with the required scientific and technological requirements. in paragraph 1 (a) of this Article, to qualify the activities of the taxable person as research and development, or in paragraph (a) of paragraph 2, to qualify them as technological innovation, taking into account in both cases the laid down in paragraph 3. Such a report shall be binding on the tax administration.

(c) Similarly, for the purposes of applying this deduction, the taxable person may apply to the tax administration for the adoption of prior agreements for the valuation of expenditure and investments relating to projects of research and development or technological innovation, as provided for in Article 91 of Law 58/2003 of 17 December 2003, General Tax.

For these purposes, taxable persons may provide a reasoned report issued by the Ministry of Science and Technology, or by a body attached to it, on compliance with the required scientific and technological requirements. in paragraph 1 (a) of this Article, to qualify the activities of the taxable person as research and development, or in paragraph (a) of paragraph 2, to qualify them as technological innovation, taking into account in both cases the (a) as set out in paragraph 3, as well as the identification of expenditure and investments which may be (a) to be charged. Such a report shall be binding on the tax administration.

5. Regulatory development.

Reglamentarily the factual assumptions that determine the application of the deductions contemplated in this precept, as well as the procedure of adoption of valuation agreements referred to in the paragraph, may be specified. previous.

Research and development expenses shall be considered as incurred by the taxable person, including the write-downs of the goods affected by the said activities, as soon as they are directly related to those activities and they are effectively applied to the performance of these, consisting specifically of individual projects.

Article 36. Deduction for the promotion of information and communication technologies.

1. Institutions which comply with the requirements laid down in Article 108 of this Law shall be entitled to a deduction of 10% of the amount of the investment and of the period's expenditure relating to the improvement of their ability to access and manage business transaction information over the Internet, as well as to improve their internal processes through the use of information and communication technologies, which are specified below:

a) Internet access, which will include:

1. Acquisition of equipment and terminals, with their associated software and peripherals, for internet connection and access to email facilities.

2. Acquisition of specific communications equipment to connect internal computer networks to the Internet.

3. Installation and deployment of these systems.

4. Training of the company's personnel for use.

b) Presence on the Internet, which will include:

1. Acquisition of equipment, with associated software and peripherals, for the development and publication of web pages and portals.

2. Third Realization of jobs, internal or contracted to third parties, for the design and development of web pages and portals.

3. Installation and deployment of these systems.

4. Training of the company's personnel for use.

c) Electronic commerce, which will include:

1. The acquisition of equipment, with its associated software and peripherals, for the implementation of electronic commerce over the Internet with the appropriate guarantees of security and confidentiality of transactions.

2. º Acquisition of equipment, with its associated software and peripherals, for the implementation of e-commerce through closed networks formed by groups of clients and suppliers.

3. Installation and deployment of these systems.

4. Training of the company's personnel for use.

d) Incorporation of information and communications technologies to business processes, including:

1. Acquisition of specific software packages and equipment for the interconnection of computers, voice and data integration, and the creation of intranet configurations.

2. Acquisition of software packages for applications to specific management, design, and production processes.

3. Installation and deployment of these systems.

4. Training of the company's personnel for use.

2. This deduction shall be incompatible for the same investments or expenses with the other investments provided for in this Chapter. The investment party or the grant-financed expenditure shall not be entitled to the deduction.

Article 37. Deduction for export activities.

1. The carrying out of export activities shall give the right to practice the following deductions from the full quota:

(a) 25% of the amount of investments actually made in the creation of branches or permanent establishments abroad, as well as in the acquisition of shares in foreign companies or the establishment of subsidiaries directly related to the export of goods or services or the hiring of tourist services in Spain, provided that the participation is at least 25% of the share capital of the subsidiary. In the tax period in which 25 percent of the participation is reached, 25 percent of the total investment made in this and in the two preceding tax periods will be deducted.

For the purposes of this paragraph, financial and insurance activities shall not be considered directly related to the export activity.

b) 25% of the amount satisfied in terms of propaganda and advertising expenditure for the multi-annual projection for product launches, opening and prospecting of markets abroad and for trade fairs, exhibitions and other similar events, including in this case those held in Spain on an international basis.

2. No deduction shall be made where the investment or expenditure is carried out in a regulated State or territory as a tax haven.

3. The basis of the deduction shall be reduced by 65% of the grants received for the implementation of the investments and expenditure referred to in paragraph

.

Article 38. Deduction for investments in goods of cultural interest, cinematographic productions, book publishing, navigation and vehicle location systems, adaptation of vehicles for the disabled and childcare for children of workers.

1. The taxable persons of the Company Tax shall be entitled to a deduction in the full quota of 15% of the amount of investments or expenses they make for:

(a) The acquisition of assets of the Spanish historical heritage, carried out outside the Spanish territory for introduction into that territory, provided that the goods are declared goods of cultural interest or included in the General inventory of movable property within one year of its introduction and remain in Spanish territory and within the holder's estate for at least four years.

The basis for this deduction will be the valuation by the Board of qualification, valuation and export of assets of the Spanish historical heritage.

b) The preservation, repair, restoration, dissemination and exhibition of the property of his property that are declared of cultural interest according to the regulations of the State Historical Heritage and the Autonomous Communities, provided that the requirements laid down in that legislation are met, in particular with regard to the duties of visiting and public exposure of such goods.

c) The rehabilitation of buildings, the maintenance and repair of their roofs and facades, as well as the improvement of their property located in the environment that is the object of protection of the Spanish cities or of the architectural, archaeological, natural or scenic sets and of the World Heritage listed in Spain.

2. Investments in Spanish productions of cinematographic films and audiovisual series of fiction, animation or documentary, which will allow the production of a physical medium prior to its serial industrial production, will entitle the producer to to a 20 percent deduction. The basis for the deduction shall be the cost of the production mined in the part financed by the financial co-producer.

The financial co-producer participating in a Spanish film film production will be entitled to a five percent deduction of the investment it funds, with the five percent ceiling on the company's income. period derived from such investments.

For the purposes of this deduction, the entity participating in the production of the films referred to in the preceding paragraph shall be considered as the financial co-producer only by providing the financial resources in value which is not less than 10% or more than 25% of the total cost of production, in exchange for the right to participate in the income derived from its exploitation. The co-production contract, in which the circumstances indicated, shall be entered, shall be submitted to the Ministry of Education, Culture and Sport.

The deductions referred to in this paragraph shall be made from the tax period in which the production of the work is completed. The amounts not deducted in that period may be applied in the settlement of the successive tax periods, under the conditions laid down in Article 44 (1) of this Act. In such a case, the limit of five per cent referred to in this paragraph shall be calculated on the income derived from the co-production that is obtained in the period in which the deduction is applied.

Conditions and procedures for the practice of this deduction may be established.

3. Investments in the publishing of books that allow the production of a physical medium, prior to its serial industrial production, will entitle to a deduction of five percent.

4. Investments in navigation systems and the location of satellite vehicles which are incorporated into commercial or commercial road transport vehicles will give the right to a deduction of the full 10 per cent of the amount of such investments.

5. Investments in access platforms for disabled persons or for wheelchair-setting anchorages, which are incorporated in public passenger transport vehicles by road, shall be entitled to take a deduction from the quota. 10 per cent of the amount of such investments.

6. Investments and expenditure on premises approved by the competent public administration to provide the first cycle of child education to the children of the employees of the institution, and the costs arising from the recruitment of the institution service with a duly authorized third party, shall be entitled to a deduction of the full 10 percent of the amount of such investments and expenses.

The basis of the deduction will be reduced in the share of the cost of the service passed on by the company to the employees and in the 65% of the grants received for the provision of the service and imputable as income in the tax period.

7. The part of the investment financed by grants shall not be entitled to deduction.

Article 39. Deductions for environmental investments.

1. Investments made in goods of the active material intended for the protection of the environment consisting of installations which prevent air pollution from industrial installations, against pollution of water Surface, underground and marine for the reduction, recovery or treatment of industrial waste for the improvement of the current regulations in these areas of action, they will give the right to practice a deduction in the total quota of 10 percent (a) of investments which are included in programmes, agreements or agreements with the Competent environmental administration, who shall issue the certification of the validation of the investment.

2. The deduction provided for in the preceding paragraph shall also apply in the case of the purchase of new commercial or commercial vehicles for road transport, only for that part of the investment which is determined to be contributes effectively to the reduction of air pollution.

3. In addition, 10 per cent of the investments made in new material assets for the use of renewable energy sources consisting of installations and equipment with any of the following may be deducted from the quota. the following purposes:

a) Use of energy from the sun for heat or electricity transformation.

b) Use, as fuel, of solid urban waste or biomass from agricultural and forestry waste, agricultural and forestry waste, and energy crops for heat transformation or electricity.

(c) Treatment of biodegradable waste from livestock farms, wastewater treatment plants, industrial effluents or urban solid waste for transformation into biogas.

d) Treatment of agricultural, forestry or oil products used for processing into biofuels (bioethanol or biodiesel).

4. The part of the investment financed by grants shall not be entitled to deduction.

Article 40. Deduction for professional training costs.

1. The completion of vocational training activities shall entitle the total of five per cent of the expenditure incurred in the tax period to be deducted from the total of five per cent of the amount of the subsidy. received for the performance of such activities, and imputable as income in the tax period.

In the event that the expenditure incurred in carrying out vocational training activities in the tax period is greater than the average of those incurred in the previous two years, the percentage laid down in the the previous paragraph up to that average, and 10 percent over the excess over this.

2. For the purposes of the above paragraph, vocational training shall be considered as a set of training actions carried out by a company, directly or through third parties, aimed at updating, training or recycling its activities. (a) staff and required by the development of their activities or by the characteristics of the jobs. In no case shall it be understood as professional training expenses which, in accordance with the provisions of the recast of the Law on the Income Tax of the Physical Persons, have the consideration of income from the personal work.

3. The deduction shall also apply for expenditure incurred by the institution for the purpose of having employees used in the use of new technologies. These expenses include those incurred in providing, facilitating or financing their connection to the Internet, as well as those resulting from free delivery, or at discounted prices, or from the granting of loans and financial support for the purchase the equipment and terminals necessary to access it, with its associated software and peripherals, even when its use by the employees can be carried out outside the place and working hours. The costs referred to in this paragraph shall be considered for tax purposes, for staff training costs and shall not determine the performance of the performance of the work for the employee.

Article 41. Deduction for job creation for disabled workers.

1. It will be deductible from the fee integrates the amount of 6,000 euros for each person/year of increase

of the average number of disabled workers employed, in accordance with the provisions of Article 39 of Law 13/1982 of 7 April 1982 on the social integration of disabled persons, for an indefinite period of time, during the tax period, in respect of the average workforce of disabled workers with that type of contract for the period immediately preceding them.

2. For the calculation of the increase of the average number of staff, the disabled workers/year with an indefinite contract who develop a full day, in the terms of the labour regulations, will be taken into account.

3. The contract workers who are entitled to the deduction provided for in this article will not be counted for the purposes of the freedom of amortisation with the creation of regulated employment in the Royal Decree Law 7/1994, of 20 June, in the Royal Decree Law 2/1995, of February 17, and in article 109 of this law.

Article 42. Deduction for reinvestment of extraordinary profits.

1. Deduction in full quota.

It will be deducted from the full quota of 20% of the positive income obtained in the onerous transfer of the assets detailed in the following paragraph integrated in the taxable base subject to the general rate of a charge or the scale provided for in Article 114 of this law, subject to reinvestment, in the terms and conditions of this Article.

This deduction will be 10 percent, five percent or 25 percent when the tax base is taxed at rates of 25 percent, 20 percent, or 40 percent, respectively.

The reinvestment condition shall be deemed to be met if the amount obtained in the onerous transfer is reinvested in the assets referred to in paragraph 3 of this Article and the income is derived from the items property listed in paragraph 2 of this Article.

The limit referred to in the last paragraph of Article 44 (1) of this Law shall not apply to this deduction. For the purposes of calculating that limit, this deduction shall not be computed.

2. Heritage items transmitted.

The assets transmitted, which are liable to generate income that constitute the basis of the deduction provided for in this article, are as follows:

(a) Those belonging to the tangible and intangible fixed assets, which have been owned at least one year prior to the transfer.

(b) Securities representative of the holding in the capital or in own funds of all kinds of entities that grant a share of not less than five percent of their share capital, and which have been owned, at least, a year in advance of the date of transmission.

It shall not be understood in this paragraph (b) that securities that do not grant a share in the share capital.

For the purposes of calculating the time of possession, the values transmitted shall be understood to have been the oldest. The computation of the transmitted participation shall relate to the tax period.

3. Heritage elements that are the subject of reinvestment.

The assets in which the amount obtained in the transmission generated by the income from the deduction must be reinvested are as follows:

(a) Those belonging to the immobilized material or intangible assets to economic activities.

(b) The securities representative of the equity or equity of all kinds of entities that grant a share of not less than five percent of the share capital of those entities.

b) securities which do not provide a share in the share capital and which are representative of the participation in the share capital or in the own funds of resident entities shall not be understood as countries or territories regulated as a tax haven.

4. Time limit for reinvestment.

(a) Reinvestment must be made within the period from the year before the date of the making available of the transferred assets and the three years after, or, exceptionally, in accordance with a plan Reinvestment special approved by the tax administration on a proposal from the taxable person.

When two or more transmissions have been carried out in the tax period of securities representing the equity or equity of all types of institutions, that time limit shall be computed from the end of the day. of the tax period.

Reinvestment shall be deemed to be effected on the date on which the making available of the assets in which it materializes occurs.

(b) In the case of property assets which are the subject of the leasing contracts referred to in paragraph 1 of the seventh additional provision of Law 26/1988 of 29 July on discipline and intervention by credit institutions shall be deemed to have been reinvested at the date of the conclusion of the contract, for an amount equal to the value of the asset item. The effects of reinvestment shall be conditional, in a resolutive manner, on the exercise of the option to buy.

(c) The deduction shall be made in the full quota corresponding to the tax period in which the reinvestment is made. Where the reinvestment has been carried out prior to the transfer, the deduction shall be made in the full quota corresponding to the tax period in which such a transfer is made.

5. Base of the deduction.

The basis of the deduction is the amount of income obtained in the transfer of the assets referred to in paragraph 2 of this Article, which has been integrated into the tax base.

For the purposes of calculating this deduction basis, the transmission value shall not exceed the market value.

They shall not form part of the income obtained in the transfer the amount of the provisions relating to the assets or securities, as soon as the allocations to these items have been fiscally deductible, or the amounts applied to the freedom of redemption, or to the recovery of the cost of the well-fiscally deductible as provided for in Article 115 of this Law, which must be integrated into the tax base on the occasion of the transfer of the assets which received such schemes.

The portion of the income obtained in the transmission that has generated the right to practice the double taxation deduction shall not be included in the deduction base.

The inclusion in the basis of deduction of the amount of income obtained in the transfer of the assets whose acquisition or subsequent use generates deductible expenses, whatever the exercise in which they are accrual, shall be incompatible with the deduction of such expenditure. The taxable person may choose to benefit from the deduction for reinvestment and the deduction of the said expenses. In such a case, the loss of the right of this deduction shall be regularised in the manner set out in Article 137.3 of this Act.

In the case of assets referred to in paragraph 2 (a) of this Article, the income obtained shall be corrected, where appropriate, in the amount of the monetary depreciation in accordance with the provisions of paragraph 2. 10 of article 15 of this law.

Reinvestment of less than the amount obtained in the transfer shall entitle the deduction established in this article, the basis of the deduction being the part of the income that proportionally corresponds to the amount reinvested.

6. Maintenance of the investment.

(a) The assets subject to reinvestment must remain in the assets of the taxable person, unless justified, until the period of five years, or three years, if they are movable property, except if their life is useful in accordance with the method of amortisation of those admitted in Article 11 of this law, which applies, whichever is the lower.

(b) The transfer of the assets to be reinvested before the end of the period referred to in the preceding paragraph shall determine the loss of the deduction, except if the amount obtained or the net value accounting, if less, is subject to reinvestment in the terms set forth in this article.

In such a case, the loss of the right of this deduction shall be regularised in the manner set out in Article 137.3 of this Act.

7. Special reinvestment plans.

When it is proven that, due to its technical characteristics, the investment must necessarily be carried out within a period exceeding that provided for in paragraph 4 of this Article, taxable persons may submit special plans of reinvestment. The procedure for the submission and approval of special reinvestment plans shall be established.

8. Formal requirements.

The taxable persons shall record in the memory of the annual accounts the amount of the income received for the deduction provided for in this Article and the date of the reinvestment. Such mention shall be made as long as the maintenance period referred to in paragraph 6 of this Article is not met.

Article 43. Deduction for business contributions to employment pension schemes, to social security mutual societies acting as an instrument of social security provision or for contributions to protected assets of persons with disabilities.

1. The taxable person may make a deduction from the full 10 per cent of the business contributions charged in favour of workers with annual gross remuneration of less than EUR 27,000, provided that such contributions are (a) they shall be subject to employment pension schemes or to social welfare insurance schemes which act as a social security instrument for which the taxable person is a promoter.

2. The taxable person may also make a deduction from the total of 10% of the contributions made in favour of protected assets of workers with annual gross remuneration of less than EUR 27,000, or of their relatives in direct or collateral line up to and including the third degree, of their spouses or of the persons in charge of such workers under the supervision or accommodation scheme covered by the Act on the protection of the property of persons with disabilities and amendment of the Civil Code, the Civil Procedure Law and the tax law with this purpose, according to the following rules:

(a) Contributions which generate the right to deduct the deduction provided for in this paragraph may not exceed EUR 8,000 per year for each worker or disabled person.

(b) Contributions exceeding the limit laid down in the preceding subparagraph shall entitle the deduction to be applied in the following four tax periods, until, where appropriate, the maximum amount which is exhausted in each of them generates the right to deduction.

Where deductions in the share for contributions made in the financial year are in the same tax period, deductions from previous financial years shall be made in the first place. from the contributions of the previous years, until the maximum amount generated by the right to deduction is exhausted.

(c) In the case of non-cash contributions, it shall be taken as the amount of the contribution as provided for in Article 18 of Law 49/2002 of 23 December of the tax regime of non-profit and non-profit entities. tax incentives for patronage.

The positive income tax will be exempt from the corporate tax on the occasion of the business contributions to protected assets.

3. In the case of workers with annual gross remuneration equal to or greater than EUR 27,000, the deduction provided for in paragraphs 1 and 2 above shall apply to the proportional share of the business contributions and contributions which correspond to the amount of the annual gross remuneration referred to in those paragraphs.

4. This deduction may not be applied in respect of contributions made under the transitional arrangements laid down in the fourth, fifth and sixth transitional provisions of the recast of the Law on the Regulation of Plans and Funds Pensions.

It will also not be applicable in the case of specific commitments made to workers as a result of a job regulation file.

5. Where provisions of goods or rights are made to the protected heritage of the workers, their relatives, spouses or persons in charge of the workers under a supervision or a reception, in accordance with the terms laid down in the paragraphs (b) and (c) of Article 59 (5) of the recast of the Income Tax Act of the Physical Persons, the taxable person who made the contribution, in the period in which the requirements have been breached, together with the quota corresponding to your tax period, the amount deducted as provided for in this In addition to the interest on late payment.

Article 44. Common rules for deductions provided for in this chapter.

1. The deductions provided for in this Chapter shall be carried out once the deductions and allowances of Chapters II and III of this Title are made.

The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods that are concluded in the immediate and successive 10 years. However, the amounts corresponding to the deductions provided for in Articles 35 and 36 of this Law may be applied in the settlements of the tax periods concluded in the immediate and successive 15 years.

The calculation of the time limits for the application of the deductions provided for in this Chapter may be deferred until the first financial year in which, within the period of limitation, positive results occur, in the following cases:

a) In the newly created entities.

(b) In institutions that heal losses from previous years by the effective contribution of new resources, without the application or capitalization of reserves being considered as such.

The amount of the deductions provided for in this chapter, as applied in the tax period, may not exceed 35 percent of the total amount of the allowance for the deductions for the purposes of this Chapter. avoid internal and international double taxation and bonuses. However, the limit shall be raised to 50% where the amount of the deduction provided for in Articles 35 and 36, corresponding to expenditure and investments effected in the tax period itself, exceeds 10% of the total quota,

is the case in the case of the case-law of the Commission.

2. The same investment may not result in the application of the deduction in more than one entity.

3. The property assets affected by the deductions provided for in the preceding Articles shall remain in operation for five years, or three years, in the case of movable property, or during its lifetime if it is lower.

Jointly with the fee corresponding to the tax period in which the non-compliance with this requirement is manifest, the amount deducted shall be entered in addition to the interest on the delay.

CHAPTER V

Fractional payment

Article 45. The split payment.

1. In the first 20 calendar days of the months of April, October and December, taxable persons shall make a split payment on account of the liquidation corresponding to the tax period which is in progress on the 1 day of each month indicated.

2. The basis for calculating the split payment shall be the full share of the last tax period, the regulatory period of which shall be due on the first day of the 20 calendar days referred to in the previous paragraph, deductions and allowances referred to in Chapters II, III and IV of this Title, as well as in the withholding and revenue from that Title.

When the last completed tax period is shorter than the year, the proportional share of the above tax period will also be taken into account until a 12-month period is completed.

3. Split payments may also be made, at the option of the taxable person, on the part of the taxable base for the period of the three, nine or 11 first months of each calendar year determined in accordance with the rules laid down in this law.

Any taxable person whose tax period does not coincide with the calendar year shall make the split payment on the part of the tax base corresponding to the days after the start of the tax period until the day prior to the start of each of the periods of entry for the split payment referred to in paragraph 1. In these cases, the split payment shall be due to the liquidation corresponding to the tax period which is in progress the day before the beginning of each of the said periods of payment.

For the option referred to in this paragraph to be valid and to produce effects, it shall be exercised in the corresponding census declaration, during the month of February of the calendar year from which it is to have effects, provided that where the tax period referred to in that option coincides with the calendar year.

If not, the exercise of the option must be carried out in the corresponding census declaration, within two months of the beginning of the tax period or within the period between the beginning of the of that tax period and the end of the period for the first split payment corresponding to the said tax period when the latter period is less than two months.

The taxable person will be bound by this mode of payment by way of payments corresponding to the same and subsequent tax period, as long as its application is not waived through the corresponding a census statement to be exercised within the same time limits as laid down in the preceding paragraph.

4. The amount of the split payment shall be the result of applying to the bases provided for in the previous two paragraphs the percentage set out in the General Budget Law of the State.

In the manner provided for in the preceding paragraph, the resulting quota shall be deducted from the allowances in Chapter III of this Title, other allowances to be paid to the taxable person, the deductions and income from the taxable person's income, and the split payments made in respect of the tax period.

5. The fractional payment shall be considered as a tax liability.

CHAPTER VI

Deduction from payments to account

Article 46. Deduction of holds, income on account, and fractional payments.

It will be full quota deductibles:

a) Reattentions to account.

b) Income to account.

c) Fracked payments.

When such concepts exceed the amount resulting from the full amount of the tax the deductions referred to in Chapters II, III and IV of this Title, the Tax Administration shall return, from trade, the excess.

TITLE VII

Special Tax Regimes

CHAPTER I

Special tax regimes in particular

Article 47. Definition.

1. Special tax regimes are regulated in this title, either by reason of the nature of the taxable persons concerned or by reason of the nature of the facts, acts or operations concerned.

2. The rules contained in the other titles shall be applied in a supplementary manner in respect of those contained in this Title.

CHAPTER II

Economic, Spanish and European interest groups, and temporary joint ventures

Article 48. Groupings of Spanish economic interest.

1. In the case of groupings of economic interest governed by Law 12/1991 of 29 April of economic interest groups, the general rules of this tax shall apply with the following specialties:

(a) They shall not be taxed by the Corporate Tax on the taxable amount attributable to the members resident on Spanish territory.

In the event that the entity opts for the mode of split payments as regulated in Article 45 (3) of this law, the calculation basis shall not include the portion of the taxable amount attributable to the partners to be supported. the imputation of the tax base. In no case shall the return referred to in Article 46 of this law be made in relation to that same party.

(b) Its members resident on Spanish territory shall be charged:

1. The taxable, positive or negative bases obtained by these entities. The negative tax bases that are charged to its members shall not be compensable by the entity that obtained them.

2. º The deductions and bonuses in the quota to which the entity is entitled. The bases of the deductions and bonuses will be integrated into the liquidation of the members, minoring the quota according to the norms of this tax or the Tax on the Income of the Physical Persons.

3. º Holds and Income to account for the entity.

2. Dividends and participations in profits that correspond to non-resident partners in Spanish territory shall be taxed in such a way, in accordance with the rules laid down in the recast text of the Non-Resident Income Tax Law, and the agreements to avoid double taxation signed by Spain.

3. Dividends and shares in profits which correspond to partners which are liable to charge the tax base and come from tax periods during which the entity is in the present scheme shall not be taxed by the latter. tax or the Income Tax of the Physical Persons.

The amount of these dividends or profit shares shall not be integrated into the acquisition value of the shares of the members to whom they were charged. In the case of partners who acquire the shares after imputation, their acquisition value shall be reduced by that amount.

In the transfer of equity shares, own funds or the results of entities covered by this scheme, the acquisition value shall be increased by the amount of the social benefits which, without effective distribution, have been charged to the partners as income from their holdings in the period of time between their acquisition and transfer.

4. The application of the provisions of Article 115 (11) of this Law shall require that the assets referred to therein be leased to third parties not linked to the economic interest grouping which affects them, and that their partners maintain their participation until the end of the tax period in which the lease is concluded.

5. This tax regime shall not apply in respect of tax periods in which activities other than those appropriate to its object are carried out or are held, directly or indirectly, in companies which are members of their own, or are control, directly or indirectly, the activities of its partners or third parties.

Article 49. European groupings of economic interest.

1. European groupings of economic interest covered by Council Regulation (EEC) No 2137/1985 of 25 July 1985 and their partners shall apply the provisions laid down in the preceding Article, with the following specialties:

a) They will not be taxed by the Company Tax.

These entities shall not make the payments broken down to those referred to in Article 45 of this Law, nor shall the deduction provided for in Article 46 of the same law be made for them.

(b) If the entity is not resident in Spanish territory, its members resident in Spain shall integrate into the tax base of the Company Tax or the Income Tax of the Physical Persons, as appropriate, the corresponding to the profits or losses determined in the pool, corrected by the application of the rules for determining the tax base.

When the activity carried out by the partners through the grouping has resulted in the existence of a permanent establishment abroad, the rules provided for in the Corporate Tax or in the the respective convention to avoid double international taxation subscribed by Spain.

(c) Non-resident partners on Spanish territory, irrespective of whether the entity resides in or outside Spain, shall be subject to the Non-Resident Income Tax only if, in accordance with the provisions of the Article 13 of the recast of the Act on the Income Tax of Non-Residents, or in the respective convention of international double taxation, results that the activity carried out by those through the grouping gives rise to the existence of a permanent establishment in that territory.

(d) The benefits attributed to non-resident partners in Spanish territory who have been taxed under non-resident income tax rules shall not be subject to taxation on the basis of their distribution.

2. The arrangements provided for in the preceding paragraphs shall not apply in the tax period in which the European economic interest group carries out activities other than the activities of its object or those prohibited in Article 3 (2) of the Treaty. Regulation EEC 2137/1985 of 25 July 1985.

Article 50. Temporary unions of companies.

1. The temporary unions of undertakings governed by Law 18/1982 of 26 May on the taxation of temporary associations and associations of undertakings and regional industrial development companies and registered in the special register of the Ministry of Hacienda, as well as its member companies, shall be taxed in accordance with Article 48 of this Law.

Member companies of a temporary union of companies operating abroad will be eligible for income from abroad for the exemption method.

2. Institutions participating in works, services or supplies which they perform or provide abroad, by means of collaboration arrangements similar to temporary units, may benefit from the exemption in respect of income from the foreign.

Entities will have to apply for the exemption from the Ministry of Finance, providing information similar to that required for temporary unions of companies incorporated in Spanish territory.

3. The option for the exemption will determine its application to the extinction of the temporary union. The negative income obtained by the temporary union shall be attributed to the taxable base of the member institutions. In such cases, where the temporary union obtains positive income in successive financial years, the Member undertakings shall, on a positive basis, integrate the negative income previously imposed, with the limit of the amount of such income, into their taxable base. positive.

4. The provisions of this Article shall not apply to tax periods in which the taxable person carries out activities other than those in which his or her social object must consist.

Article 51. Imputation criteria.

1. The imputations referred to in this Chapter shall be made to persons or entities who have the economic rights inherent in the quality of a member or a member undertaking on the day of the conclusion of the tax period of the institution. subject to this scheme, in the proportion resulting from the writing of the institution's constitution and, failing that, by equal parties.

2. The imputation shall be carried out:

(a) When members or member companies are entities subject to this scheme, on the date of the closure of the financial year of the institution under this scheme.

(b) In the other cases, in the following tax period, unless it is decided to do so on an ongoing basis on the same date of closure of the financial year of the institution under this scheme.

The option will be stated in the first tax return in which it has to take effect and must be maintained for three years.

Article 52. Identification of members or member companies.

The entities to which the provisions of this Chapter apply shall, in conjunction with their declaration of the Corporate Tax, present a relationship of the persons who have the inherent rights or the quality of a member or a member company on the last day of its tax period, as well as the proportion in which each of them participates in the results of those entities.

CHAPTER III

Entities dedicated to housing leasing

Article 53. Scope of application.

1. The arrangements provided for in this Chapter may be covered by companies which have exclusively the lease of dwellings located in Spanish territory for the exclusive social purpose. This exclusivity will be compatible with the investment in local business and garage spaces for leasing, provided that their joint book value does not exceed 20 percent of the total book value of the investments in the entity.

For these purposes, only the housing lease is defined in Article 2 of Law 29/1994 of 24 November 1994 on Urban Leases, provided that the conditions and conditions laid down in this Law are met. such a law for rental housing contracts.

2. The application of the special tax regime regulated in this Chapter will require compliance with the following requirements:

(a) That the number of dwellings leased or offered on lease by the entity is at all times equal to or greater than 10. The book value of all housing acquired by the entity in the construction phase, including those purchased on a flat basis, shall not exceed 20 per cent of the total accounting value of the entity's dwellings.

b) That at least one third of the leased homes incorporate into the lease an option to purchase the housing in favour of the tenant.

The recognition of the option must not assume for the tenant the payment of consideration and must specify the price of the exercise of the own option, exercise that will always be optional. In no case may it be stipulated that the non-exercise of the right to extend the lease for the first five years or the lack of exercise of the right of choice determines for the lessee the obligation to pay compensation. to the lessor.

(c) In the event that the leased or leased dwellings by the entity are not classified as official protection or declared protected, the following requirements shall also be met:

1. º that the dwellings are acquired by the entity at market value and that they do not have at the time of their purchase an age of more than three years since the completion of their construction or since the integral rehabilitation of the building in which they are located. For these purposes, comprehensive rehabilitation of buildings shall be understood as referred to in Article 37 of Royal Decree 1/2002 of 11 January on measures for the financing of protected actions in the area of housing and soil of the 2002-2005 Plan, or the rules to replace it.

In the case of homes already acquired at the time of the scheme, the seniority shall be counted as the starting date of the tax period in which the option is communicated by the scheme.

2. º that the constructed area of each dwelling does not exceed 110 square meters, being able to reach a maximum of 135 square meters in 20 percent of the total of the houses managed under this regime by each entity. The lease may include a maximum of two garage spaces and the annexes located in the same building, excluding the business premises, provided that each one and others are arranged in conjunction with the dwelling.

3. That during the first five years of the term of the lease, the annual update of the income regulated in Article 18 (1) of Law 29/1994 shall be carried out by applying, at most, the variation percentage experienced by the National General Index of the Consumer Price Index System over a period of 12 months immediately prior to the date of each reduced update by 0.75 percentage points.

4. º That the right of option recognized to the tenant, in accordance with the provisions of paragraph (b) above, is exercisable within six months prior to the date of termination of the lease. In any event, the exercise of that option shall take effect on the day following the end of the lease, unless the parties, by common agreement, agree on another date.

(d) In the event that the leased or leased dwellings by the entity are classified as official protection or declared as prote goidas, the right of option recognized to the lessee in accordance with the provided for in subparagraph (b) above is exercisable within the maximum period of six months, after the expiry of the period of protection laid down in the relevant State or regional rules, provided that the lease continues in force. To this end, the lessee may extend the contract for such additional six months.

3. The option for this scheme should be communicated to the tax administration. The special tax regime shall be applied in the tax period ending after that communication and in the subsequent years to be concluded before the tax administration is notified of the waiver of the scheme.

The requirements of the communication and the content of the information to be supplied with it may be established.

4. Where the entity is applicable to any of the other special schemes referred to in this Title VII, except for international tax transparency, and for mergers, divisions, contributions of assets and exchange of securities, it shall not be eligible for the scheme covered by this Chapter III, without prejudice to the following subparagraph.

The entities to which, in accordance with Article 108 of this Law, tax incentives apply to them for the small-scale undertakings provided for in Chapter XII of this Title VII, may be eligible for between applying such incentives or applying the regulated regime in this Chapter III.

5. The application of the system governed by this Chapter III shall be incompatible with the deduction for reinvestment of extraordinary profits provided for in Article 42 of this Act.

Article 54. Bonuses.

1. Institutions that meet the requirements set out in the previous Article may apply the following bonuses in the full quota:

(a) 85% of the share of the full share corresponding to the income derived from the lease or the transmission of dwellings that meet the requirements of the previous article.

In cases of the transmission of the dwellings, the following must be complied with:

1. º that have been leased by the institution for at least five years in the case of the dwellings referred to in paragraph 2.c) of the previous article and, at least within the period of protection laid down in the state regulations or the corresponding autonomic, in the case of the dwellings referred to in paragraph 2 (d) of the previous Article.

2. º The amount obtained is reinvested, within three years from the transmission, in other homes that meet the requirements set out in the previous article.

(b) 97% of the share of the full share corresponding to the income derived from the lease or the transfer of housing where, in addition to the requirements of the previous article, the following are met:

1. In the event that the leased or leased dwellings by the entity are not qualified as official protection or are declared protected:

That the initial annual income to be satisfied by the lessee does not exceed the result of applying four percent to the maximum legal selling price of the rented housing, calculated as set out in the regulations at any time in force on the state housing plans.

The lease agreement incorporates the purchase option as provided for in paragraphs (b) and (c) of paragraph 2 of the previous article.

2. In the event that the leased or offered dwellings on lease by the entity are classified as official protection or declared protected, the lease agreement incorporates an option to purchase agreement. as provided for in paragraph 2 (d) of the previous Article.

In cases of the transmission of the dwellings, the following must be complied with:

which have been leased by the institution for at least five years in the case of the dwellings referred to in paragraph 1. above and, at least within the time limit laid down in the applicable rules, to be able to offer for sale the dwellings to tenants, in the case of dwellings referred to in paragraph 2. above.

That the amount obtained is reinvested, within three years from the transmission, in other homes that meet the requirements set out in the previous article.

2. The rent to be paid for the lease shall be integrated for each dwelling by the full income obtained, minorated in the expenses directly related to the obtaining of said income and in the part of the general expenses that correspond proportionally to the said revenue.

3. If the entity has acquired the housing by way of transmission arising from merger, division or transfer of assets, and the income generated in that transmission would not have been integrated into the taxable amount of the transfer under the terms of the the special arrangements for such transactions, the income to be borne by a bond arising from its subsequent transmission in accordance with paragraph 1, shall be exclusively that which exceeds the market value at the date of the acquisition.

4. The allowances provided for in paragraph 1 of this Article shall be incompatible with each other for the same income and shall be applied once, where applicable, the remaining allowances covered by the rules of this tax.

5. The members of the institutions which opt for the scheme governed by this Chapter shall be entitled to deduct the deduction to avoid double taxation as laid down in Article 30 (1) of this Law for the benefit of the scheme. transfer of the units.

6. The tax arrangements provided for in this Chapter may also be applied, with the specialities provided for in this paragraph, by the entities referred to in Article 53 (1) of this Act which are leased or offered in tenancies. they have built, promoted or acquired. In these cases, the following requirements must be met:

That the number of homes leased or offered on lease by the entity is at all times equal to or greater than 10.

That the lease does not incorporate an option to purchase.

In the case of dwellings not classified as official protection or declared protected, the second and third requirements of paragraph 2 (c) of Article 53. In the case of acquired dwellings, the first requirement of paragraph (c) must be fulfilled.

That the dwellings remain leased or offered on lease for at least 15 years from the date on which they were leased or offered for the first time by the entity.

In the case of dwellings that are listed in the entity's assets before the date of the scheme, the period shall be computed from the date of the start of the tax period in which the option is communicated by the scheme.

Entities which meet the requirements of this paragraph may apply in the full quota an 85% bonus for the part of the full share corresponding to the income derived from the lease or from the the transmission of dwellings which comply with the requirements laid down in this paragraph. The application of this allowance in cases of the transmission of the dwellings shall also require compliance with the following requirements:

That the dwelling is not acquired by the tenant, his or her spouse or relatives, including the like, up to and including the third degree.

That the amount obtained is reinvested, within three years from the transmission, in other homes that meet the requirements set forth in this section.

CHAPTER IV

Capital-risk and venture capital funds and regional industrial development companies

Article 55. Capital-risk companies and funds.

1. Companies and venture capital funds, regulated in Law 1/1999 of 5 January, regulating risk capital institutions and their management companies, will be exempt in 99 percent of the income they obtain in the transfer of securities. representative of the participation in the capital or in the own funds of the undertakings referred to in Article 2.1 of that law, in which they participate, provided that the transmission takes place from the beginning of the second year of the holding from the time of acquisition and up to the 15th, inclusive.

An extension of the latter period may exceptionally be permitted until the 20th year, inclusive.

The assumptions, conditions, and requirements that you enable for such an extension will be determined.

With the exception of the assumption provided in the previous paragraph, the exemption will not apply in the first year and from the 15th.

In the event that the participating entity agrees to the listing on a regulated securities market in Council Directive 93 /22/EEC of 10 May 1993, the application of the exemption provided for in the preceding paragraphs shall be conditional on the risk capital of the company or the venture capital fund to be transferred to the capital of the investee within a period not exceeding three years, from the date on which the admission to trading of the capital was produced. the latter.

2. Companies and venture capital funds may apply the deduction provided for in Article 30.2 of this law or the exemption provided for in Article 21.1 of this law, as the source of the said income, to dividends and, in general, to the holdings in profits from the companies that promote or promote, whatever the percentage of the holding and the time held for the shares or units.

3. Dividends and, in general, the perceived profits of companies and venture capital funds will have the following treatment:

(a) They shall be entitled to the deduction provided for in Article 30.2 of this Act whatever the percentage of the holding and holding time of the shares or units when their recipient is a taxable person of that tax or a taxpayer of the Income Tax of non-residents with permanent establishment in Spain.

(b) They shall not be understood to be obtained in Spanish territory where their recipient is a natural person or a contributing entity of Non-Resident Income Tax without permanent establishment in Spain.

4. The following treatment shall be given to the positive income shown in the transmission or redemption of shares or shares representing the own funds of the companies and the venture capital funds:

(a) They shall be entitled to the deduction provided for in Article 30.5 of this Law, irrespective of the percentage of participation and the time held for the holding of shares or shares when their recipient is a taxable person of that tax or a taxpayer of the Income Tax of non-residents with permanent establishment in Spain.

(b) They shall not be construed as being obtained on Spanish territory where their recipient is a natural person or a taxpayer of the Non-Resident Income Tax without permanent establishment in Spain.

5. The provisions of paragraph (b) of paragraphs 3 and 4 above shall not apply where the income is obtained through a country or territory which is regulated as a tax haven.

Article 56. Regional industrial development companies.

1. The regional industrial development companies governed by Law 18/1982 of 26 May on the taxation of temporary associations and associations of undertakings and regional industrial development companies shall enjoy partial exemption from the tax on the the income from the transfer of shares and holdings in the capital of undertakings in which they participate in the terms laid down in paragraph 1 of the previous Article.

2. Dividends and, in general, shares in profits received from companies participating in regional industrial development companies shall enjoy the deduction provided for in Article 30.2 of this Act whichever is the same. percentage of shares and holding time of shares/units.

CHAPTER V

Collective investment institutions

Article 57. Taxation of collective investment institutions.

1. Collective investment institutions governed by the Law on Collective Investment Institutions, with the exception of those subject to the general rate of charge, shall not be entitled to any deduction of the fee or the exemption from income at the base. tax to avoid international double taxation. In no case shall the arrangements of the assets companies provided for in Articles 61 to 63 of this Law apply.

2. Where the amount of the instalments, deductions and income on account of the income exceeds the amount of the full quota, the tax administration shall, on its own initiative, return the excess.

Article 58. Taxation of the partners or members of the collective investment institutions.

1. The provisions of this Article shall apply to members or members subject to this tax or to the Income Tax of non-residents who obtain their income by permanent establishment in Spanish territory, of the institutions of collective investment referred to in the previous Article.

2. The taxable persons referred to in the preceding paragraph shall integrate the following concepts into the tax base:

(a) The income, positive or negative, obtained as a result of the transmission of the shares or units or the repayment of the shares or units.

b) Benefits distributed by the collective investment institution. These benefits will not entitle you to double taxation.

3. The scheme provided for in paragraph 2 of this Article shall apply to the members or members of collective investment institutions governed by Council Directive 85 /611/EEC of 20 December 1985, other than those provided for in the Article 60 of this law, incorporated and domiciled in a Member State of the European Union and registered in the special register of the National Securities Market Commission, for the purposes of its marketing by entities resident in Spain.

Article 59. Income accounted for by shares or units of collective investment institutions.

The amount of income accounted for or to be accounted for by the taxable person arising from the shares or units of the collective investment institutions shall be included in the taxable amount.

Article 60. Taxation of members or members of collective investment institutions incorporated in countries or territories that are regulated as tax havens.

1. The taxable persons of this tax and the Income Tax of non-residents who obtain their income by permanent establishment in Spanish territory, participating in collective investment institutions incorporated in countries or territories which are regulated as tax havens, shall integrate in the tax base the positive difference between the liquidative value of the holding on the day of the closing of the tax period and its acquisition value.

The amount integrated into the rateable value will be considered as higher acquisition value.

2. The profits distributed by the collective investment institution shall not be integrated into the tax base and shall be the value of the acquisition of the holding.

These benefits will not entitle you to double taxation.

3. The difference referred to in paragraph 1 shall be presumed to be 15% of the acquisition value of the share or share.

CHAPTER VI

Heritage Societies

Article 61. Regime of the heritage companies.

1. The following circumstances shall be taken into account in the case of property companies:

a) That more than half of your asset is constituted by securities or that more than half of your asset is not affected by economic activities.

To determine if there is an economic activity or if a patrimonial element is affected, you will be willing to pay for the Income Tax of the Physical Persons.

Both the value of the asset and the value of the assets not affected by economic activities shall be that which is deducted from the accounts, provided that it accurately reflects the true patrimonial situation of the company.

For the purposes of determining the part of the asset that is constituted by non-affected assets or assets:

1. No the following values will not be computed:

The possessed to comply with statutory and regulatory obligations.

Those incorporating credit rights born from contractual relationships established as a result of the development of economic activities.

Those held by securities companies as a result of the exercise of the constitutive activity of their object.

Those who grant, at least, five percent of the voting rights and are held for the purpose of directing and managing participation whenever, for these purposes, the corresponding media organization is available material and personal, and the investee entity is not included in this paragraph (a).

2. º No such as securities or as non-profit elements shall be computed as non-economic activities whose purchase price does not exceed the amount of the undistributed profits earned by the entity, provided that such gains come from the performance of economic activities, with the limit of the amount of profits earned both in the year itself and in the last 10 years. For this purpose, dividends arising from the securities referred to in the last subparagraph of the preceding paragraph shall be treated as income from economic activities where the income obtained by the participating entity is derived from the less than 90 percent of the economic activities.

b) That more than 50% of the share capital belongs, directly or indirectly, to 10 or fewer partners or to a family group, in the sense that it is constituted by the spouse and the other persons united by kinship, direct or collateral links, consanguine or affinity, up to the fourth grade, inclusive.

The circumstances referred to in this paragraph shall be in place for more than 90 days of the social exercise.

2. This scheme shall not apply to companies in which the whole of the partners are legal persons who, in turn, are not a property company or where a legal person governed by public law is the holder of more than 50% of the capital. Nor shall it be applied in the tax periods in which the securities representing the participation of the company were admitted to trading in one of the official secondary markets of securities provided for in Law 24/1988, of 28 July, on the Securities Market.

3. The property companies will be taxed by this tax according to the following special rules:

(a) The tax base shall be divided into two parts, the general part and the special part, and shall be quantified in accordance with the provisions of the recast of the Law on the Income Tax of the Physical Persons, excluding the Chapter III of Title II and Article 95.1.a (a), second subparagraph, and taking into account the following:

1. The determination of net income from economic activities shall be performed by the normal mode of the direct estimation method.

2. In the calculation of the amount of capital gains, it will not be applicable to the transitional provision of the consolidated text of the Law on the Income Tax of the Physical Persons.

3. The reductions laid down in Articles 21.2, 21.3, 24.2, 30 and 94.2 of the recast of the Income Tax Act of the Physical Persons shall not apply when any of the members of the company assets are taxable persons of the Corporate Tax or Income Tax of non-residents.

4. The negative tax bases of previous years will be compensated according to the rules of the Income Tax of the Physical Persons.

(b) The rate of charge shall be 40% for the general part of the tax base. The special part of the tax base will be taxed at 15 percent.

(c) The full quota may only be reduced by application of the following items:

1. º Deductions provided for natural persons in paragraphs 2, 3, 4 and 5 of Article 69 of the recast of the Income Tax Act of the Physical Persons, in accordance with the terms laid down in Article 70 of the cited law.

2. º Double Taxation Deductions set out in Articles 81 and 82 of the recast of the Income Tax Act of the Physical Persons.

3. The account payments provided for in Articles 45 and 140 of this Law.

d) In the calculation of the amount of the split payments made as provided for in Article 45 (2) of this Law, the only minorings to be carried out shall be those deriving from the deductions provided for in the paragraphs 2, 4 and 5 of Article 69 and Articles 81 and 82 of the recast of the Income Tax Act of the Physical Persons, as well as the withholding and income to account for that.

If such calculation is made by applying the provisions of Article 45 (3) of this Law, only the deduction provided for in Article 69 (4) of the recast of the Tax Law shall be taken into account. Income of the Physical Persons, as well as the deductions and income to account practiced on the income of the taxable person, and the fractional payments made corresponding to the tax period.

Article 62. Distribution of profits earned in financial years in which the regime of the ownership and transfer of shares or shares in companies which have been subject to the regime of the property companies has been applied.

1. The distribution of profits obtained in financial years in which the special scheme of the property companies has been applied, irrespective of the entity which deals with the profits made by the property companies, the time in which the allocation is made and the special tax regime applicable to the entities at that time, shall receive the following treatment:

(a) Where the recipient is a taxpayer of the Income Tax of the Physical Persons, the dividends and the benefit contributions referred to in paragraphs 1 and 2. of Article 23 (1) (a) the recast of the Law on the Income Tax of the Physical Persons, which come from tax periods during which the entity that distributes them is found in the regime of patrimonial societies, will not be integrated into the income of the tax period of such tax.

(b) Where the recipient is a taxable person of this tax or a taxpayer of the Income Tax of non-residents with permanent establishment, the perceived benefits shall in any case be integrated into the tax base and give the right to the double taxation deduction in the terms set out in Article 30 (1) and (4) of this Law.

(c) Where the recipient is a non-resident Income Tax taxpayer without permanent establishment, the received benefits shall be treated in accordance with the provisions of the text recast of the Non-Resident Income Tax Act, for these taxpayers.

2. The income obtained in the transfer of participation in companies which have reserves accruing from profits to which the regime of the property companies would have applied to them, irrespective of the entity whose shares transmit, the time at which the transmission takes place and the special tax regime applicable to the entities at that time, shall receive the following treatment:

(a) Where the transmitte is a taxpayer of the Income Tax of the Physical Persons, for the purposes of determining the profit or loss, the provisions of Article 35.1.c of the recast text shall apply. The Income Tax Law of the Physical Persons.

(b) Where the transferor is an entity subject to this tax, or a non-resident Income Tax taxpayer with permanent establishment, in no case may the deduction be applied to avoid double taxation. on internal source capital gains on the terms set out in Article 30 of this Act.

In determining these rents, the transmission value to be computed shall be at least the theoretical resulting from the last closed balance sheet, after the accounting value of the assets not affected by the value they would have the effects of the Heritage Tax, or the normal market value if it is lower.

The provisions of the first paragraph shall also apply in the cases referred to in Article 30 (3) of this Law.

(c) When the transferor is a non-resident Income Tax taxpayer without permanent establishment, it shall have the appropriate treatment in accordance with the provisions of the recast text of the Law of the Non-Resident Income Tax, for these taxpayers.

Article 63. Identification of members.

1. Property companies shall maintain or convert the representative shares of the holding in their capital into nominatives.

2. Failure to comply with this requirement will be considered a serious tax violation. The penalty will consist of a fixed pecuniary fine of EUR 3 000 for each tax period in which the non-compliance has been made, provided that no administrative burden has been achieved. If there is an administrative requirement, the penalty shall be EUR 6,000 for each tax period in which the non-compliance persists.

This infringement shall be liable to the subsidiary of the directors of the company, except those who have expressly proposed the measures necessary to comply with the provisions of the preceding paragraph, without having been accepted by the remaining administrators.

The penalty imposed in accordance with this paragraph shall be reduced in accordance with the provisions of Article 188 (3) of Law 58/2003 of 17 December, General Tax.

CHAPTER VII

Fiscal Consolidation Regime

Article 64. Definition.

1. Tax groups may opt for the tax arrangements provided for in this Chapter. In this case, the entities that are integrated into them will not be taxed on an individual basis.

2. An individual tax system shall mean the one that would correspond to each entity in the event that the tax consolidation regime does not apply.

Article 65. Taxable person.

1. The tax group shall be treated as a taxable person.

2. The dominant company will have the representation of the tax group and will be subject to compliance with the material and formal tax obligations arising from the tax consolidation regime.

3. The dominant company and the dependent companies will also be subject to the tax obligations arising from the individual taxation scheme, with the exception of the payment of the tax liability.

4. The administrative checks or investigations carried out in respect of the dominant company or any entity of the tax group, with the formal knowledge of the dominant company, shall interrupt the period of limitation of the Corporation tax that affects the tax group.

Article 66. Tax liabilities arising from the application of the tax consolidation regime.

Companies in the tax group will respond jointly and severally to the payment of the tax liability, excluding penalties.

Article 67. Definition of the tax group. Dominant company. Dependent companies.

1. Tax group shall mean the set of limited and limited liability companies for shares resident in Spanish territory formed by a dominant company and all companies that are dependent on it.

2. A dominant company shall be deemed to meet the following requirements:

(a) Having any of the legal forms set out in the previous paragraph or, failing that, having legal personality and being subject to and not exempt from the Company Tax. The permanent establishments of non-resident entities located in Spanish territory may be considered as dominant companies in respect of companies whose holdings are affected by it.

b) Having a direct or indirect participation of at least 75% of the share capital of another company or other companies on the first day of the tax period in which this tax regime applies.

c) That such participation is maintained throughout the tax period.

The requirement to maintain participation throughout the tax period shall not be required in the event of dissolution of the participating entity.

d) That is not dependent on any other resident in Spanish territory, who meets the requirements to be considered as dominant.

(e) Not subject to the special arrangements of economic, Spanish and European interest groups, and temporary unions of undertakings or of property companies.

(f) That, in the case of permanent establishments of non-resident entities in Spanish territory, those entities are not dependent on any other resident in Spanish territory who meets the requirements to be considered as a parent and resident in a country or territory with which Spain has an agreement to avoid double international taxation which contains an exchange of information clause.

3. A dependent company shall be understood to mean that the dominant company has a holding which meets the requirements set out in paragraphs (b) and (c) of the previous paragraph.

4. The entities in which one of the following circumstances concur shall not be part of the tax groups:

a) That they are exempt from this tax.

b) That at the end of the tax period they are in a position of contest, or incurs in the estate situation provided for in article 260.1.4. of the recast text of the Law of Companies, approved by the Royal Decree Legislative 1564/1989 of 22 December 1989, even if they were not in the form of public limited liability companies, unless prior to the conclusion of the financial year in which the annual accounts were approved, the latter situation would have been exceeded.

(c) Dependent companies which are subject to corporation tax at a different rate than that of the dominant company.

(d) Dependent companies whose participation is achieved through another company that does not meet the requirements established to be part of the tax group.

5. The tax group shall be extinguished when the dominant company loses that character.

Article 68. Inclusion or exclusion of companies in the tax group.

1. Companies on which a holding is acquired as defined in paragraph 2.b) of the previous Article shall be compulsorily integrated into the tax group with effect from the following tax period.

In the case of newly created companies, integration will take place from the moment of its constitution, provided that the remaining requirements are met to be part of the tax group.

2. Dependent companies that lose such a condition will be excluded from the tax group with effect from the tax period itself in which such a circumstance occurs.

Article 69. Determining the indirect domain.

1. When a company has at least 75% of its share capital in another company, and in turn, the latter is in the same situation with respect to

same situation.

to a third, and so on, to calculate the indirect participation of the first one on the other societies, will multiply, respectively, the percentages of participation in the social capital, so that the result These products must be at least 75% so that the indirectly involved society can and must be integrated into the tax group and, in addition, all intermediate companies must be integrated into the tax group.

2. If, in a fiscal group, there is a co-existence of direct and indirect participation, in order to calculate the total participation of a company in another, directly and indirectly controlled by the first, the percentages of direct participation and indirect. In order for the participating company to be able and to be integrated into the corporate tax group, that sum must be at least 75%.

3. If there is a relationship of reciprocal, circular or complex participation, the participation of at least 75% of the share capital should be tested with objective data.

Article 70. Implementation of the tax consolidation regime.

1. The tax consolidation regime shall be applied where all the companies that are required to integrate the tax group agree to do so.

2. The agreements referred to in the preceding paragraph shall be adopted by the shareholders ' meeting or equivalent body of the non-commercial form at any date of the immediate tax period preceding the date of application of the fiscal consolidation, and shall have effects when they have not been challenged or are not liable to challenge.

3. Companies which are now part of the tax group shall comply with the obligations referred to in the preceding paragraphs within a time limit which shall end on the day of the end of the first tax period in which they are to be taxed. in the tax consolidation regime.

4. The absence of the agreements referred to in paragraphs 1 and 2 of this Article shall determine the impossibility of applying the system of fiscal consolidation.

The absence of the agreements corresponding to the companies that are to be incorporated in the tax group will constitute a serious tax violation of the dominant entity. The penalty will consist of a fixed pecuniary fine of EUR 2 000 for the first tax period in which the scheme has been applied without complying with this requirement and EUR 4 000 for the second, and will not prevent the effective integration of the companies concerned, determining the impossibility of applying the system of fiscal consolidation, if within two years from the date of the end of the first tax period in which they are to be taxed in the tax consolidation scheme, the lack of agreement referred to in this article persisted.

The penalty imposed in accordance with this paragraph shall be reduced in accordance with the provisions of Article 188 (3) of Law 58/2003 of 17 December, General Tax.

5. If the option is exercised, the tax group will be bound to this scheme indefinitely during the following tax periods, as long as the requirements of Article 67 are met and as long as its application is not waived through the corresponding census declaration, which shall be exercised, where appropriate, within two months of the end of the last tax period of its application.

6. The dominant company shall communicate the agreements referred to in paragraph 1 of this Article to the tax administration prior to the commencement of the tax period in which this scheme applies.

Also, before the end of each tax period, the dominant company will communicate to the tax administration the composition of the tax group for that period, identifying the companies that have been integrated into the tax and those that have been excluded from it.

Article 71. Determination of the tax group's tax base.

1. The tax group's tax base will be determined by adding:

(a) The individual taxable bases for each and every company belonging to the tax group, without including the compensation of individual negative tax bases.

b) Deletions.

c) The additions of the eliminations practiced in previous exercises.

(d) Compensation of the tax group's negative tax bases, where the amount of the sum of the preceding paragraphs is positive, as well as the negative tax bases referred to in Article 74 (2) of the this law.

2. The eliminations and additions shall be made in accordance with the criteria set out in Royal Decree 1815/1991 of 20 December 1991 laying down the rules for the formulation of consolidated annual accounts.

3. The tax group's tax base shall not be considered to be a taxable item of the positive difference between the book value of the shares in the capital of the dependent companies which it owns, directly or indirectly, the the dominant company and the proportional share that those securities represent in relation to the own funds of those dependent companies.

The negative difference will not be considered taxable income.

The difference referred to in the previous two paragraphs is that of the date on which the dependent company or companies are included for the first time in the tax group.

Article 72. Removals.

1. For the determination of the consolidated tax base, the total elimination of results from internal transactions carried out in the tax period shall be carried out.

Internal transactions shall be understood as those made between companies in the tax group in the tax periods in which they are both a part of it and the tax consolidation regime applies.

2. Elimination of results, positive or negative, by internal transactions shall be carried out as soon as the above results are included in the individual taxable bases of the entities that are part of the tax group.

3. The dividends included in the individual taxable bases for which the internal double taxation deduction provided for in Article 30.4 of this Act has not been deducted shall not be eliminated.

Article 73. Additions.

1. The eliminated results will be incorporated into the tax group's tax base when they are performed against third parties.

2. Where a company has intervened in an internal transaction and subsequently ceases to be part of the tax group, the result removed from that transaction shall be incorporated into the tax base of the tax group for the period the rate of tax prior to that in which the separation was made.

3. The incorporation of the elimination of the value correction of the participation of the companies in the tax group when they cease to be part of the tax group and assume the right to the compensation of the negative tax base will be practiced. corresponding to the loss that determined the value correction.

The reversal of value adjustments practiced in tax periods where the investee entity was not part of the tax group shall not be incorporated.

Article 74. Compensation of negative taxable bases.

1. If, by virtue of the rules applicable to the determination of the tax base of the tax group, this is negative, the amount of the tax base may be offset against the positive tax bases of the tax group in accordance with Article 25 of the this law.

2. The negative tax bases of any company that are not yet to be compensated at the time of their integration into the tax group may be offset in the tax base of the tax group, with the limit of the individual tax base of the company itself, excluding from the tax base, to those alone effects, dividends or shares in profits as referred to in Article 30 (2) of this Act.

Article 75. Reinvestment.

1. The companies of the tax group may apply the deduction for reinvestment of extraordinary profits, which may be reinvested by the company itself which obtained the extraordinary benefit, or another belonging to the tax group. Reinvestment may be realised in an item acquired from another company in the tax group provided that the item is new.

2. The deduction for reinvestment of extraordinary profits shall not be made in the case of transfers made between entities in the tax group.

Article 76. Tax period.

1. The tax period of the tax group shall coincide with that of the dominant company.

2. Where any of the dependent companies conclude a tax period in accordance with the rules of taxation on an individual basis, that conclusion shall not determine that of the tax group.

Article 77. Full membership of the tax group.

Full share of the tax group will be understood as the amount resulting from applying the dominant company's tax rate to the tax group's tax base.

Article 78. Deductions and bonuses from the tax group's full quota.

1. The full share of the tax group shall be reduced by the amount of the deductions and allowances provided for in Chapters II, III and IV of Title VI of this Act.

The requirements laid down for the application of the above deductions and bonuses will be referred to the tax group, as well as to apply the exemption regime set out in Article 21 of this Act.

2. The deductions of any company pending application at the time of its inclusion in the tax group may be deducted in the full share of the tax group with the limit which the company has had in the individual scheme of taxation.

Article 79. Reporting obligations.

1. The parent company shall, for tax purposes, formulate the balance sheet and the consolidated profit and loss account, applying the method of global integration to all the companies that make up the tax group.

2. The consolidated annual accounts shall relate to the same closing date and period as the annual accounts of the dominant company, and the dependent companies shall close their social year on the date on which the dominant company does so.

3. The documents referred to in paragraph 1 shall be accompanied by the following information

a) Eliminations practiced in previous tax periods pending incorporation.

(b) The eliminations practiced in the tax period duly justified in their origin and value.

(c) The additions made in the tax period, equally justified in their origin and value.

(d) The differences, duly explained, which may exist between the eliminations and additions made for the purposes of determining the tax base of the tax group and those made for the purposes of the production of the documents referred to in paragraph 1.

Article 80. Causes determining the loss of the fiscal consolidation regime.

1. The tax consolidation regime will be lost for the following reasons:

(a) The concurrence in some or some of the companies belonging to the tax group of some of the circumstances that according to the provisions of the General Tax Law determine the application of the method of estimation indirect.

(b) Failure to comply with the reporting obligations referred to in paragraph 1 of the previous Article.

2. The loss of the fiscal consolidation regime will occur with the effects of the tax period in which some or some of the causes referred to in the previous paragraph are present, and the companies belonging to the tax group will be taxed by the individual regime in that period.

Article 81. Effects of the loss of the fiscal consolidation regime and the extinction of the tax group.

1. In the event of the loss of the fiscal consolidation regime or the extinction of the tax group, elimination pending incorporation, negative tax bases of the fiscal group or the loss of the fiscal consolidation regime, or deductions in the quota to be cleared, shall be taken as follows:

(a) The outstanding removals will be integrated into the tax group's tax base for the last tax period in which the tax consolidation regime is applicable.

(b) The companies that are part of the tax group in the tax period in which the loss or extinction of this scheme occurs will assume the right to compensation of the negative tax bases of the pending tax group compensate, in the proportion that they have contributed to their training.

The compensation shall be made on the basis of the positive tax bases to be determined on an individual basis of taxation in the tax periods remaining until the end of the period laid down in Article 25.1 of this Act, from the next or next to that or those on which negative taxable group bases were determined.

(c) Companies that integrate the tax group in the tax period in which the loss or extinction of this scheme occurs will assume the right to the outstanding compensation of the tax group's quota deductions, in the proportion in which they have contributed to their training.

Compensation shall be made in the full quotas to be determined in the tax periods that subtract until the completion of the period laid down in this law for the outstanding deduction, counted from the following or following: the one or those in which the amounts to be deducted were determined.

2. The companies that are part of the tax group in the tax period in which the loss or extinction of this scheme occurs, will assume the right to deduct the split payments that the tax group would have made, in the proportion in which have contributed to them.

3. The provisions of the preceding paragraphs shall apply where some or some of the companies that make up the tax group cease to belong to the tax group.

Article 82. Statement and self-validation of the tax group.

1. The dominant company will be obliged, at the time of filing the tax group's declaration, to liquidate the tax liability corresponding to the tax group and to enter it in the place, form and time limits to be determined by the Minister of Finance. The dominant company must fulfil the same obligations in respect of split payments.

2. The tax group's statement shall be submitted within the time limit for the individual tax return of the dominant company.

3. The additional declarations to be made in the event of the termination of the tax group, loss of the tax consolidation regime or separation of companies from the tax group shall be submitted within 25 calendar days of the six months after the day on which the determining causes of extinction, loss or separation occurred.

CHAPTER VIII

Special arrangements for mergers, divisions, asset contributions, and exchange of securities

Article 83. Definitions.

1. The merger consideration will have the operation by which:

(a) One or more entities transmit en bloc to another existing entity, as a consequence and at the time of its dissolution without liquidation, their respective social assets, by entrustment to their securities representative of the social capital of the other entity and, where appropriate, of a compensation in money not exceeding 10% of the nominal value or, in the absence of a nominal value, of a value equivalent to the nominal value of those securities deducted from its accounting.

(b) Two or more entities transmit en bloc to another new entity, as a consequence and at the time of its dissolution without liquidation, the totality of its social assets, by entrustment to its partners of representative values of the the social capital of the new entity and, where applicable, a compensation in money not exceeding 10% of the nominal value or, in the absence of a nominal value, of a value equivalent to the nominal value of those securities deducted from its accounts.

(c) An entity transmits, as a consequence and at the time of its dissolution without liquidation, the set of its social assets to the entity that holds the totality of the securities representative of its share capital.

2. 1. The operation by which the operation shall be split shall be considered as:

(a) An entity divides in two or more parts the totality of its social patrimony and transmits them in block to two or more existing or new entities, as a result of its dissolution without liquidation, by entrustment to its partners, in accordance with a proportional rule, of securities representative of the share capital of the institutions acquiring the contribution and, where appropriate, of a compensation in money not exceeding 10% of the nominal value or, in the absence of a value nominal value, of a value equivalent to the nominal value of those securities deducted from their accounts.

b) An entity segregates one or more parts of its social heritage that form branches of activity and transmits them as a block to one or more newly created or existing entities, receiving in return representative values of the capital of the latter, which must be attributed to its members in proportion to their respective shares, reducing the share capital and reserves in the amount necessary, and, where appropriate, a cash compensation in the terms of the paragraph previous.

(c) An entity segregates a portion of its social assets, consisting of shares in the capital of other entities that trust the majority of the share capital in these entities, and transmits it to another entity, newly created or already in return for securities representing the capital of the acquiring institution, which shall attribute to its members in proportion to their respective shares, reducing the share capital and reserves in the amount necessary and, in their case, a compensation in money under the terms of subparagraph (a) above.

2. In cases where there are two or more acquiring entities, the attribution to the partners of the entity that is spun off from securities representative of the capital of any of the acquiring entities in a different proportion to that which they have in which they are spun off will require that the assets acquired by those constitute branches of activity.

3. The transaction by which an entity contributes, without being dissolved, to another entity of new creation or already existing the whole or one or more branches of activity, shall have the consideration of non-cash contribution of branches of activity, receiving in return securities representative of the social capital of the acquiring institution.

4. A branch of activity shall mean the set of assets which are capable of constituting an autonomous economic unit determining an economic exploitation, that is to say, a set capable of operating by its own means. Debts incurred for the organisation or operation of the items that are transferred may be attributed to the acquiring company.

5. The exchange of securities representing the capital of the social capital shall be considered to be the transaction by which an entity acquires a share in the capital of another entity which allows it to obtain the majority of the voting rights in it, by means of the the allocation to the partners, in exchange for their securities, of other representative of the social capital of the first entity and, where appropriate, of a cash compensation not exceeding 10% of the nominal value or, in the absence of a nominal value, of a value equivalent to the nominal of those securities deducted from their accounts.

6. The tax arrangements provided for in this Chapter shall also apply to transactions involving taxable persons of that tax which do not have the legal form of a commercial company, provided that they produce results equivalent to those of the derivatives of the operations referred to in the preceding paragraphs.

Article 84. System of income derived from the transmission.

1. The following income derived from the operations referred to in the previous Article shall not be included in the taxable amount:

(a) Those that are evidenced as a result of transmissions made by entities resident in Spanish territory of goods and rights in the situated.

When the acquiring institution resides abroad, the income derived from the transfer of those items which are affected to a permanent establishment situated in the territory shall be excluded from the taxable base.

The transfer of these items outside the Spanish territory shall determine the integration into the taxable base of the permanent establishment, in the tax period in which the permanent establishment takes place, of the difference between the value market and the value referred to in the following article, which has been minorted, where applicable, in the amount of the write-downs and other value adjustments that are contably reflected in the tax deductible.

(b) Those which are revealed as a result of transmissions by entities resident in Spanish territory, of permanent establishments situated in the territory of non-Union States European in favour of entities resident in Spanish territory.

(c) Those that are evidenced as a result of transmissions by non-resident entities on Spanish territory, of permanent establishments in the situated.

When the acquiring institution resides abroad, the income derived from the transfer of those items which are affected to a permanent establishment situated in the territory shall be excluded from the taxable base.

The transfer of these elements outside the Spanish territory shall determine the integration into the taxable base of the permanent establishment, in the year in which the permanent establishment takes place, of the difference between the normal value of the market and the value referred to in the following article, which has been minorted, where applicable, in the amount of the write-downs and other value adjustments that are contably reflected in the tax deductible.

(d) Those which are shown as a result of transmissions made by entities resident on Spanish territory, of permanent establishments situated in the territory of the Member States of the European Union, in In the case of an institution which is resident in the Member States, it is one of the forms listed in the Annex to Directive 90 /434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of actions, and are subject to and not exempt from any of the taxes referred to in Article 3.

The income derived from the transactions referred to in paragraphs (a), (b) and (c) above shall not be excluded from the tax base where the acquiring institution is exempted by this tax or subject to the allocation scheme. rents.

The income derived from the transactions referred to in this paragraph shall be excluded from the tax base even if the acquiring institution enjoys the application of a special tax rate or tax rate. Where the acquiring institution enjoys the application of a tax rate or a special tax system other than that of the transfer, as a result of its different legal form, the income derived from the transfer of assets Existing assets at the time of the operation, carried out after the operation, shall be understood to be generated in a linear manner, unless otherwise proved during the entire period of tenure of the transmitted element. The part of such income generated up to the time of the operation shall be taxed by applying the rate of charge and the tax system which would have been paid to the transferring entity.

2. The arrangements laid down in the preceding paragraph may be waived by means of the integration into the taxable base of the income derived from the transfer of all or part of the assets.

3. In any event, the income derived from vessels or aircraft or from movable property affected by their exploitation shall be integrated into the taxable base, which shall be made manifest in the international maritime and air navigation entities where the acquiring entity is not resident in Spanish territory.

Article 85. Tax assessment of purchased goods.

1. Goods and rights acquired through transmissions resulting from the operations to which the scheme provided for in the previous Article has been applied shall be valued for the same value as they had in the institution. the date of acquisition of the transmitting entity shall also be maintained for the purposes of applying the provisions of Article 15.10 of this Law.

Such securities shall be corrected in the amount of the income that has actually been taxed at the time of the transaction.

2. In cases where the scheme provided for in the previous Article is not applicable, the agreed value shall be taken between the parties with the limit of the normal market value.

Article 86. Tax valuation of shares or shares received in consideration of the contribution.

The shares or shares received as a result of a contribution from branches of activity shall be valued for tax purposes by the accounting value of the autonomous economic unit, corrected in the amount of the income which is have integrated into the tax base of the transferring company on the occasion of the transaction.

Article 87. Tax regime for the exchange of securities.

1. Income from the income tax or income tax which is evidenced on the occasion of the exchange of securities shall not be included in the taxable amount of the income tax, provided that they meet the following requirements:

(a) That the trading partners of securities are resident in Spanish territory or in that of a Member State of the European Union or in that of any other State provided that, in the latter case, the securities received are representative of the social capital of an entity resident in Spain.

(b) the entity that acquires the securities is resident in Spanish territory or falls within the scope of Directive 90 /434/EEC.

2. The securities received by the entity performing the exchange of securities shall be valued for the value they held in the assets of the members making the contribution, according to the rules of this tax or the Income Tax of the Physical Persons, except that their normal market value is lower, in which case they shall be valued by the latter.

In cases where the income generated in the partners is not subject to taxation in Spanish territory, the agreed value shall be taken between the parties with the limit of the normal market value.

3. The securities received by the partners shall be valued for tax purposes for the value of the delivered, determined in accordance with the rules of this tax or the Income Tax of the Physical Persons, as applicable. This assessment shall be increased or decreased by the amount of the additional compensation in money delivered or received.

The values received will retain the date of purchase of the delivered.

4. In the event that the partner loses the quality of resident in Spanish territory, it will be integrated into the tax base of the Income Tax of the Physical Persons or of this tax of the tax period in which this circumstance occurs, the the difference between the normal market value of the shares/units and the value referred to in the previous paragraph, corrected, where applicable, in the amount of the value losses that have been fiscally deductible.

The share of the tax liability corresponding to that income may be deferred by entering together with the statement corresponding to the tax period in which the securities are transmitted, provided that the taxable person guarantee the payment of that.

5. Income obtained in transactions involving entities domiciled or established in qualified countries or territories shall be integrated into the tax base of the Income Tax of the Physical Persons or of this tax. regulated as tax havens or obtained through them.

6. Securities exchange transactions which do not comply with the requirements laid down in paragraph 1 of this Article shall not benefit from the scheme provided for in this Chapter.

Article 88. Taxation of partners in merger, absorption and total or partial division operations.

1. The income which is shown on the occasion of the allocation of the securities of the acquiring institution to the partners of the transferring entity shall not be included in the taxable amount, provided that they are resident in Spanish territory or in the territory of a Member State. Member State of the European Union or in that of any other State provided that, in the latter case, the securities are representative of the share capital of an entity resident in Spanish territory.

2. The securities received under merger, absorption and division, total or partial, are valued for tax purposes by the value of the delivered, determined in accordance with the rules of this tax or the Income Tax. Physical Persons, as appropriate. This valuation shall be increased or reduced by the amount of the additional compensation in money delivered or received. The values received will retain the date of purchase of the delivered.

3. In the event that the partner loses the quality of resident in Spanish territory, it will be integrated into the tax base of the Income Tax of the Physical Persons or of this tax of the tax period in which this circumstance occurs, the the difference between the normal market value of the shares/units and the value referred to in the previous paragraph, corrected, where applicable, in the amount of the value losses that have been fiscally deductible.

The share of the tax liability corresponding to that income may be deferred by entering together with the statement corresponding to the tax period in which the securities are transmitted, provided that the taxable person guarantee the payment of that.

4. Income obtained in transactions involving entities domiciled or established in qualified countries or territories shall be integrated into the tax base of the Income Tax of the Physical Persons or of this tax. regulated as tax havens or obtained through them.

Article 89. Shares in the capital of the transferring entity and the acquiring institution.

1. Where the acquiring institution participates in the capital of the transferring entity in at least five per cent, the positive income arising from the cancellation of the holding shall not be included in the taxable amount of that entity, provided that it corresponds with reserves of the transmitting entity, nor the negative income that is evidenced by the same cause.

In this case, the deduction will not be applied to avoid double taxation of dividends in respect of the reserves referred to in the previous paragraph.

2. Where the amount of the participation is lower than the amount referred to in the preceding paragraph, the amount of the difference between the normal market value of the assets received shall be determined by the amount of the difference between the amount of the participation. attributable to the holding and the accounting value of this.

3. The assets acquired shall be valued for tax purposes in accordance with Article 85 of this Law.

However, where the acquiring institution participates in the capital of the transferring entity, by at least five per cent, the amount of the difference between the acquisition price of the holding and its theoretical value imputed to the goods and rights acquired, in accordance with the criteria laid down in Royal Decree 1815/1991 of 20 December 1991, approving the rules for the formulation of consolidated annual accounts, and the part of that the difference that would not have been charged will be tax deductible from the tax base, with the annual limit maximum of twenty-one part of its amount, provided that the following requirements are met:

(a) that the participation has not been acquired from persons or entities not resident in Spanish territory or to natural persons resident in Spanish territory, or to a related entity when the latter, in turn, acquired the participation to those persons or entities.

The requirement provided for in this paragraph (a) shall be deemed to be fulfilled:

1. The Treaty of a participation acquired from persons or entities not resident in Spanish territory or to an entity linked to the acquiring entity which, in turn, acquired the participation of the aforementioned persons or entities, where the amount of the difference referred to in the preceding paragraph has been taxed in Spain through any transmission of the participation.

The deduction of the indicated difference shall also be deducted where the taxable person proves that an amount equivalent to that amount has actually been taxed in another Member State of the European Union, for the benefit obtained by the transfer of the participation, bearing a charge equivalent to that which would have resulted from the application of this tax, provided that the transfer does not reside in a country or territory which is regulated as a tax haven.

2. The Treaty of a participation acquired from natural persons resident in Spanish territory or to a related entity where the latter, in turn, acquired the participation of the said natural persons, when it is proved that the wealth gain obtained by such natural persons has been integrated into the tax base of the Income Tax of the Physical Persons.

(b) The acquiring institution of the holding is not in respect of the entity that transmitted it in any of the cases provided for in Article 42 of the Trade Code. For these purposes, it is understood that the cases of Article 42 of the Code of Commerce are those referred to in Section 1 of Chapter I of the rules for the formulation of consolidated annual accounts, approved by Royal Decree 1815/1991, 20 December.

The requirement provided for in this subparagraph (b) shall not apply with respect to the purchase price of the share satisfied by the transmitting entity or entity when, in turn, it has acquired from persons or entities not related residents in Spanish territory.

Where the requirements (a) and (b) above are met, the valuation resulting from the part imputed to the assets of the fixed assets shall have tax effects, being deductible from the tax base, in the case of goods amortisation, the accounting amortisation of that part of the charge, as provided for in Article 11.

Where the requirement (a) is met, but the above paragraph (b) is not met, the envelopes for the depreciation of the difference between the acquisition price of the holding and its theoretical value shall be deductible if they are proven to respond to irreversible depreciation.

4. Where the transferring entity participates in the capital of the acquiring institution, the income to be shown on the occasion of the transfer of the holding shall not be integrated into the taxable amount of that entity even if the entity has exercised the power of resignation provided for in Article 84 (2) of this Law.

Article 90. Subrogation in tax rights and obligations.

1. Where the transactions referred to in Article 83 determine a succession to a universal title, the entity acquiring the rights and the tax obligations of the transmitting entity shall be transmitted to the acquiring institution.

The acquiring entity shall assume the fulfilment of the necessary requirements to continue in the enjoyment of tax benefits or to consolidate those enjoyed by the transmitting entity.

2. Where the succession is not a universal succession, the transfer shall take place only in respect of the tax rights and obligations relating to the goods and rights transmitted.

The acquiring entity shall assume compliance with the requirements arising from the tax incentives of the transmitting entity, as soon as they are related to the goods and rights transmitted.

3. The negative tax bases to be cleared in the transferring entity may be offset by the acquiring institution.

Where the acquiring institution participates in the capital of the transferring entity, or both are part of a group of companies referred to in Article 42 of the Trade Code, the negative taxable amount liable to compensation shall be reduced by the amount of the positive difference between the value of the members ' contributions, made by any title, corresponding to that holding or to the shares held by the group's entities on the transmitting entity, and its book value.

In no case shall the negative tax bases corresponding to losses incurred by the transmitting entity that have motivated the depreciation of the acquiring institution's participation in the capital of the capital be compensated. (a) the transfer entity, or the depreciation of the holding of another entity in the latter where all of them are part of a group of companies referred to in Article 42 of the Trade Code.

4. The subrogations shall comprise exclusively the rights and obligations arising under the Spanish laws.

Article 91. Imputation of rents.

The income of the activities carried out by the entities extinguished because of the operations referred to in Article 83 of this Law shall be charged in accordance with the provisions of the commercial rules.

Article 92. Losses of permanent establishments.

When a permanent establishment is transmitted and the arrangements provided for in Article 84 (1) (d) of this law are applied, the taxable base of the transmitting entities resident in Spanish territory is increase in the amount of excess losses on the benefits charged by the permanent establishment in the previous 10 years.

Article 93. Accounting obligations.

1. The acquiring institution shall include in the annual report the information which is then cited, unless the transmitting entity has exercised the power referred to in Article 84.2 of this law in which case the information is to be completed only indicated in paragraph (d):

(a) Exercise in which the transmitting entity acquired the transmitted assets that are eligible for redemption.

b) Last balance closed by the transmitting entity.

(c) The relationship of acquired goods which have been incorporated in the books of accounts for a value other than that for which they were included in the accounts of the entity transmitting prior to the conduct of the transaction, both securities as well as the amortisation funds and provisions set out in the books of the two entities.

(d) Relation of tax benefits enjoyed by the transmitting entity, in respect of which the institution is required to assume compliance with certain requirements in accordance with Article 90 (1) and (2) this law.

For the purposes set out in this paragraph, the transmitting entity shall be obliged to report such data to the acquiring institution.

2. Legal entities shall mention in the annual report the following data:

a) The accounting value of the delivered values.

b) The value for which the received values were counted.

3. The particulars set out in the preceding paragraphs shall be made as long as the assets or assets acquired or the requirements arising from the tax incentives enjoyed by the Member State are kept in the inventory. transmitting entity.

The acquiring institution may choose, with reference to the second and subsequent annual reports, to include the mere indication that these particulars are shown in the first annual report approved after the operation, which must be kept while the circumstance referred to in the preceding paragraph is present.

4. Failure to comply with the obligations set out in the preceding paragraphs shall be considered as a serious tax infringement. The penalty will consist of a fixed pecuniary fine of 200 euros for each item omitted, in each of the first four years in which the information is not included, and of 1,000 euros for each data omitted, in each of the following years, with the limit of the five percent of the value by which the acquiring institution has reflected the assets and rights transmitted in its accounts.

The penalty imposed in accordance with this paragraph shall be reduced in accordance with the provisions of Article 188 (3) of Law 58/2003 of 17 December, General Tax.

Article 94. Non-cash contributions.

1. The scheme provided for in this Chapter shall apply, to the option of the taxable person of this tax or of the taxpayer of the Income Tax of the Physical Persons, to the non-cash contributions in which the following contributions are made requirements:

(a) That the entity receiving the contribution is resident in Spanish territory or carries out activities in the Spanish territory by means of a permanent establishment to which the assets are affected.

b) That once the contribution, the taxable person contributing to this tax or the taxpayer of the Income Tax of the Physical Persons, is involved, participate in the own funds of the entity that receives the contribution in, less, five percent.

(c) That, in the case of a contribution of shares or social contributions by taxpayers of the Income Tax of the Physical Persons, they shall be fulfilled in addition to the requirements set out in paragraphs (a) and (b), following:

1. º that the entity whose social capital is representative is resident in Spanish territory and that the entity does not apply the special regime of economic interest groups, Spanish or European, and temporary unions of companies or of property companies, provided for in this law.

2. º That represent a participation of at least five percent of the entity's own funds.

3. º That are held uninterruptedly by the contributor during the year before the date of the public document in which the contribution is formalized.

(d) That, in the case of contributions of assets other than those referred to in paragraph (c) by taxpayers of the Income Tax of the Physical Persons, those elements are affected by economic activities whose accounting is carried out in accordance with the provisions of the Trade Code.

2. The scheme provided for in this Chapter shall also apply to contributions from branches of activity by the taxpayers of the Income Tax of the Physical Persons, provided that they bear their accounts in accordance with the Code. Trade.

3. The assets transferred may not be valued for tax purposes by a value higher than their normal market value.

Article 95. Rules to avoid double taxation.

1. For the purposes of avoiding double taxation which may arise by application of the valuation rules provided for in Articles 86, 87.2 and 94 of this Law, the following rules shall apply:

(a) The profits distributed from the income attributable to the assets shall be entitled to the deduction to avoid the double taxation of dividends as referred to in Article 30.2 of this Law, is the percentage of the partner's participation and its seniority. The same criterion shall apply in respect of the deduction to avoid the double taxation of capital gains as referred to in Article 30.5 of this Law for the income generated in the transmission of the participation.

(b) Benefits distributed from income attributable to the assets contributed shall be entitled to the exemption or deduction to avoid the international double taxation of dividends whatever the degree of partner's participation.

The depreciation of the share arising from the distribution of the profits referred to in the preceding paragraph shall not be fiscally deductible, unless the amount of such profits has been taxed in Spain through of the transmission of the participation.

2. Where the acquiring institution has not been able to avoid double taxation by application of the rules laid down in the preceding paragraph, the institution shall, at the time of its termination, make the necessary adjustments. (a) to the contrary to those which it has practised pursuant to the rules of assessment laid down in Articles 86, 87.2 and 94 of this Law. The acquiring institution may practise such adjustments as a sign contrary to its extinction, provided that it proves that its participation has been transmitted by the partners and the amount of the amount which has been integrated into the base assessment of these on the occasion of such transmission.

Article 96. Implementation of the tax regime.

1. The application of the scheme set out in this Chapter will require that it be opted for according to the following rules:

(a) In merger or division operations, the option shall be included in the draft and in the social agreements for the merger or division of the transmitting and acquiring entities that have their tax residence in Spain.

Dealing with operations to which the regime established in Article 84 of this Law applies and in which neither the transferring entity nor the acquirer has its tax residence in Spain, the option shall be exercised by the acquiring entity and must be in public deed in which the transmission is documented.

(b) In non-cash contributions the option shall be exercised by the acquiring institution and shall be entered in the relevant social agreement or, failing that, in the public deed in which the appropriate act or contract is documented.

In the case of transactions in which the acquiring institution does not have its tax residence or permanent establishment in Spain, the option shall be exercised by the transferring entity.

(c) In securities exchange transactions, the option shall be exercised by the acquiring institution and shall be entered in the relevant social agreement or, failing that, in the public deed in which the appropriate act or contract is documented. The option shall be exercised by the social body competent to promote the operation in the public bids for the acquisition of shares, and shall be included in the explanatory prospectus.

Dealing with transactions in which neither the acquiring entity of the securities nor the participating entity whose securities are redeemed are resident in Spain, the partner that transmits those securities must demonstrate that the entity Directive 90 /434/EEC has been applied to it.

In any case, the option must be communicated to the Ministry of Finance in the form and deadlines that are regulated.

2. The scheme set out in this Chapter shall not apply where the main objective of the operation is fraud or tax evasion. In particular, the scheme shall not apply where the operation is not carried out for valid economic reasons, such as the restructuring or rationalisation of the activities of the entities involved in the operation, but with the sole purpose of to achieve a tax advantage.

In the terms provided for in Articles 88 and 89 of Law 58/2003 of 17 December, General Tax, the interested parties may ask the tax authorities for consultations on the application and compliance with this requirement. in specific operations, the defence of which shall be binding on the application of the special scheme of this Chapter in this and any other taxes.

3. The income deferral scheme contained in this Chapter shall be incompatible, in accordance with the terms laid down in Article 21 of this Law, with the application of the exemptions provided for in the income from the transmission of holdings in non-resident entities on Spanish territory.

CHAPTER IX

Mining Tax Regime

Article 97. Mining entities: freedom of amortisation.

1. Entities carrying out exploration, research and exploitation activities or the benefit of mineral deposits and other geological resources classified in Section C) (1) of Article 3 of Law 22/1973 of 21 July of Mines, or in Section D), established by Law 54/1980 of 5 November, amending the Law of Mines, as well as those which are regulated in general between those included in Sections A) and B) of the said Article, may enjoy, in relationship to their investments in mining assets and to the amounts paid in respect of the area, free of amortisation for 10 years from the beginning of the first tax period on the basis of which the result of the operation is integrated.

2. The activities referred to in the preceding paragraph shall not be considered as the mere provision of services for the performance or development of such activities.

Article 98. Exhaustion factor: scope and modes.

1. They may reduce the taxable amount, in the amount of the amounts allocated, as a factor of exhaustion, to the taxable persons who make use of one or more of the mines under Law 22/1973 of 21 July of the following resources:

(a) Those included in Section C) of Article 3 of Law 22/1973, of 21 July, of Mines, and in Section D) created by Law 54/1980 of 5 November, amending the Law of Mines.

(b) Those obtained from deposits of non-natural origin belonging to Section B of that Article, provided that the products recovered or processed are classified in Section C) or in Section D) by Law 54/1980 of 5 November amending the Law of Mines.

2. The exhaustion factor shall not exceed 30% of the tax base portion corresponding to the use of the leverage referred to in the previous paragraph.

3. Institutions carrying out the use of one or more of the mineral raw materials declared as priorities in the National Supply Plan may choose, in the activity relating to these resources, why the exhaustion factor is up to 15% of the value of the minerals sold, also being considered to be consumed by the same companies for further processing or processing. In this case, the allocation for the exhaustion factor may not exceed the taxable amount corresponding to the processing, processing, marketing and sale of the substances obtained from the use of the said substances and the products incorporating such substances and other products derived therefrom.

4. In the event that several natural or legal persons have been associated with the conduct of mining activities without becoming an independent legal personality, each unit-holder may allocate, on a pro rata basis, their participation. in the common activity, the corresponding amount as a factor of exhaustion with the obligations laid down in the following Articles.

Article 99. Exhaustion factor: investment.

The amounts which have reduced the tax base as a factor for exhaustion can only be invested in expenditure, work and fixed assets directly related to the mining activities which are then indicate:

a) Exploration and research of new mineral deposits and other geological resources.

b) Research to improve the recovery or quality of the products obtained.

(c) Subscription or acquisition of securities representing the share capital of companies engaged exclusively in the activities referred to in paragraphs (a), (b) and (d) of this Article, as well as the exploitation of deposits Mineral and other geological resources classified in Section C of Article 3 of Law 22/1973, of 21 July, of Mines, and in Section D), created by Law 54/1980 of 5 November, amending the Law of Mines, as regards minerals radioactive, geothermal resources, bituminous rocks and any other mineral deposits or resources The Government agrees to include in this section, provided that in both cases the securities are kept uninterruptedly in the equity of the entity for a period of 10 years.

In the event that the companies from which the shares or units were subscribed, after the subscription, perform activities other than those mentioned, the taxable person must carry out the liquidation to which he/she is refers to Article 101.1 of this law, or to reinvest the amount corresponding to that subscription, in other investments that meet the requirements. If the new reinvestment is made in respect of the values referred to in the first subparagraph, they shall be maintained for the period remaining to complete the 10-year period.

d) Research to obtain a better understanding of the reserve of the field in operation.

e) Laboratories and research teams applicable to the mining activities of the company.

(f) Actuations included in the restoration plans provided for in Royal Decree 2994/1982 of 15 October on the restoration of natural spaces affected by extractive activities.

Article 100. Exhaustion factor: requirements.

1. The amount to be reduced by the exhaustion factor in each tax period shall be reversed within 10 years from the date of its conclusion.

2. Investment shall be deemed to have been made when the expenditure or work referred to in the previous article or the fixed assets has been incurred.

3. In each tax period, the institution's reserve accounts shall be increased by the amount that reduced the tax base by way of exhaustion factor.

4. The taxable person shall collect in the memory of the 10 years following that in which the corresponding reduction was made the amount of the latter, the investments made from the latter and the amortisation made, as well as any reduction in the reserve accounts which were increased as a result of the provisions of the previous paragraph and the fate of the former. These facts may be checked during the same period.

5. Reserves constituted in accordance with paragraph 3 may only be freely available, in so far as investments are amortised, or after 10 years after the date of the signing of the corresponding reserves. actions or participations financed from such funds.

6. Investments financed by application of the exhaustion factor shall not be eligible for the deductions provided for in Chapter IV of Title VI.

Article 101. Exhaustion factor: non-compliance with requirements.

1. After the period of 10 years without having invested or having inadequately invested the corresponding amount, it shall be integrated into the tax base of the tax period ending the expiry of that period or of the financial year in which the (a) the inadequate provision should be made, the corresponding interest on late payment should be settled from the date of the end of the period of voluntary payment of the debt corresponding to the tax period in which the payment was made; correlative reduction.

2. In the case of liquidation of the institution, the amount to be applied to the exhaustion factor shall be integrated into the tax base in the form and with the effects provided for in the previous paragraph.

3. In the same way, the cases of the transfer or the total or partial disposal of the mining operation and those of merger or transformation of entities shall be carried out, unless the resulting entity, which continues the mining activity, assumes compliance with the requirements necessary to consolidate the benefit enjoyed by the transmitting or transformed entity, on the same terms as it was in the previous entity.

CHAPTER X

Tax regime for the investigation and exploitation of hydrocarbons

Article 102. Exploration, research and exploitation of hydrocarbons: depletion factor.

Companies whose social object is exclusively the exploration, investigation and exploitation of deposits and underground storage of natural, liquid or gaseous hydrocarbons, existing in the Spanish territory and in the subsoil of the territorial sea and of the seabed which are under the sovereignty of the Kingdom of Spain, in the terms of Law 34/1998 of 7 October 1998, of the Hydrocarbons Sector, and with a complementary nature, those of transport, storage, purification and sale of the extracted products, will be entitled to a reduction in their taxable base, as a factor of exhaustion, which may be, at the choice of the entity, any of the following two:

(a) 25 percent of the amount of consideration for the sale of hydrocarbons and the provision of storage services, with the limit of 50 percent of the tax base prior to this reduction.

b) 40 percent of the amount of the tax base prior to this reduction.

Article 103. Exhaustion factor: requirements.

1. The quantities which have reduced the tax base by way of exhaustion must be invested by the concessionaire in the activities of exploration, research and exploitation of deposits or underground storage of hydrocarbons. to develop in the Spanish territory and in the subsoil of the territorial sea and the seabed that are under the sovereignty of the Kingdom of Spain, as well as in the abandonment of fields and in the dismantling of marine platforms, within 10 years from the conclusion of the tax period in which the tax base is reduced in concept of exhaustion. The same consideration shall be given to the exploration, research and exploitation activities carried out in the four years preceding the first tax period in which the tax base is reduced as a result of exhaustion.

For these purposes, preliminary studies of geological, geophysical or seismic nature, as well as all costs incurred in the area of a permit for exploration or research, shall be understood by exploration or research. as exploration surveys, as well as evaluation and development surveys, if they are negative, the costs of works for access and preparation of the land and the location of such surveys.

Also considered as exploration or research expenses are those carried out in a concession and which relate to work for the location and drilling of a structure capable of containing or storing hydrocarbons, other than the which contains the deposit which resulted in the granting of the holding. Abandonment of fields and the dismantling of offshore platforms shall mean the work necessary to dismantle the terrestrial production facilities or the offshore platforms, leaving the ground or the marine space free and expeditious. occupied in the form set by the grant decree.

For these purposes, it is understood by investments in exploitation that are carried out in the area of a concession of exploitation, such as the design, drilling and construction of the wells, the operating facilities, and any other investment, tangible or intangible, which is necessary in order to be able to carry out the tasks of exploration, provided that they do not correspond to investments made by the concessionaire in the exploration or research activities referred to above. previously.

To be included as exploitation, for these purposes, the assessment and development surveys that are positive.

2. In each tax period, the reserve accounts of the institution shall be increased by the amount that reduced the tax base by way of exhaustion.

3. Only reserves set up pursuant to the previous paragraph may be freely available, in so far as the assets financed by those funds are amortised.

4. The taxable person shall collect in the memory of the 10 years following that in which the corresponding reduction was made the amount of the latter, the investments made from the latter and the amortisation made, as well as any decrease in the reserve accounts which were increased as a result of the provisions of paragraph 2 and the destination of the reserve.

These facts may be subject to verification during the same period, for which the taxable person must provide the accounting and the appropriate documentary supports which demonstrate compliance with the requirements of the exhaustion factor.

5. Investments financed by application of the exhaustion factor shall not be eligible for the deductions provided for in Chapter IV of Title VI

Article 104. Exhaustion factor: non-compliance with requirements.

1. After the period of 10 years without having invested or having inadequately invested the corresponding amount, it shall be integrated into the tax base of the tax period ending the expiry of that period or of the financial year in which the (a) the inadequate provision should be made, the corresponding interest on late payment should be settled from the date of the end of the period of voluntary payment of the debt corresponding to the tax period in which the payment was made; correlative reduction.

2. In the case of the liquidation of the entity or the change of its social object, the amount outstanding for the application of the exhaustion factor shall be integrated into the tax base in the form and with the effects provided for in the preceding paragraph.

3. In the same way, the cases of transfer or full or partial disposal, merger or transformation of the entity shall be carried out, unless the resulting entity continues to have as a social object, exclusively, that established in the article 102 of this law and assume the fulfilment of the necessary requirements to consolidate the benefit enjoyed by the transmitting or transformed entity, in the same terms as it was in the previous entity.

Article 105. Shared ownership.

In the event that a number of companies have the shared ownership of a research permit or an operating concession, each of the participating entities shall be assigned revenue, expenditure, income derived from the transfer of assets and investments, which are attributable to them, in accordance with their degree of participation.

Article 106. Depreciation of intangible investments and research expenditure. Compensation of negative taxable bases.

1. Intangible assets and expenses of a research nature carried out in existing permits and concessions, expired or extinguished, shall be considered as intangible assets, from the time of their realization, and may be amortised with an annual fee 50 percent maximum. This concept will include geological, geophysical and seismic work, and land access and preparation works as well as exploration, evaluation and development surveys, and well-fitting operations. conservation of fields.

There will be no maximum repayment period for intangible assets and research expenditure.

2. The tangible assets of the asset may be amortised, in accordance with the "production unit" criterion, in accordance with a plan accepted by the Administration under the terms of paragraph (d) of Article 11 (1) of this Act.

3. The entities referred to in Article 102 of this Act shall compensate for the negative tax bases by means of the procedure of reducing the taxable bases for the following financial years at a maximum annual amount of 50% of each of the following financial years. those.

This negative tax base compensation procedure replaces the one set out in Article 25 of this law.

CHAPTER XI

International tax transparency

Article 107. Inclusion in the tax base of certain positive income obtained by non-resident entities.

1. Taxable persons shall include in their taxable base the positive income obtained by a non-resident entity on Spanish territory, as soon as such income belongs to one of the classes provided for in paragraph 2 and the circumstances are fulfilled. following:

(a) That alone or jointly with persons or entities linked within the meaning of Article 16 of this law have a share of 50% or more in the capital, own funds, results or voting rights of the non-resident entity in Spanish territory, on the date of the closure of the latter's social year.

The participation of the non-resident related entities in Spanish territory shall be computed by the amount of indirect participation determined by the persons or entities related to the territory resident in the territory of Spain.

The amount of positive income to be included shall be determined in proportion to the participation in the results and, failing that, in proportion to the share in the capital, own funds or voting rights.

b) That the amount satisfied by the non-resident entity in Spanish territory, attributable to one of the classes of income provided for in paragraph 2 by reason of a charge of a nature identical or similar to that tax, is lower 75 percent of the one that would have been reciprocated according to the rules of that.

2. Only the positive income from each of the following sources shall be included in the tax base:

(a) Entitlement to rustic and urban real estate or real rights falling upon them, unless they are affected by a business activity in accordance with Articles 25 and 27 of the recast of the Law of the Tax on the Income of Physical Persons, or ceded in use to non-resident entities, belonging to the same group of companies of the holder, within the meaning of Article 42 of the Code of Commerce.

b) Participation in own funds of any kind of entity and transfer to third parties of own capital, in the terms provided for in Article 23.1 and 2 of the recast text of the Income Tax Act Physical.

Not included in this subparagraph shall be the positive income from the following financial assets:

1. The Tained to comply with statutory and regulatory obligations arising from the exercise of business activities.

2. º Those incorporating credit rights born from contractual relationships established as a result of the development of business activities.

3. The held as a result of the exercise of intermediation activities in official stock markets.

4. THOSE HELD BY CREDIT INSTITUTIONS AND INSURERS AS A RESULT OF THE EXERCISE OF THEIR ACTIVITIES, WITHOUT PREJUDICE TO THE PROVISIONS OF PARAGRAPH (c).

The positive income derived from the transfer to third parties of own capital shall be understood as arising from the carrying out of the credit and financial activities referred to in paragraph (c), where the transferor and the transferee belong to the a group of companies within the meaning of Article 42 of the Trade Code and the revenue of the transferee shall, at least 85 per cent, carry out the business activities.

(c) Credit, financial, insurance and service provision activities, except those directly related to export activities, carried out, directly or indirectly, with persons or entities resident in Spanish territory and related within the meaning of Article 16, as soon as they determine tax deductible expenses in such resident entities.

No positive income shall be included when more than 50 percent of the income derived from credit, financial, insurance or service delivery activities, except those directly related to activities of the 'export', carried out by the non-resident entity, comes from operations carried out with persons or entities not related within the meaning of Article 16.

d) Transmission of the goods and rights referred to in paragraphs (a) and (b) that generates income.

The income provided for in paragraphs (a), (b) and (d) above, obtained by the non-resident entity, shall not be included as soon as it comes from or is derived from entities in which it participates, directly or indirectly, in more than five per percent, when the following two requirements are met:

1. º That the non-resident entity directs and manages the units, through the corresponding organization of material and personal means.

2. That the income of the entities from which the income is obtained shall be at least 85 percent of the business activities.

For these purposes, the income provided for in paragraphs (a), (b) and (d) which originated in entities that meet the requirement of the previous paragraph 2 and are derived from the exercise of business activities shall be understood as participated directly or indirectly by more than five percent by the non-resident entity.

3. The income provided for in paragraphs (a), (b) and (d) of the preceding paragraph shall not be included where the sum of their amounts is less than 15 per cent of the total income or four per cent of the total income of the non-resident entity.

The limits set out in the preceding paragraph may relate to the income or income obtained by the whole of the non-resident entities in Spanish territory belonging to a group of companies within the meaning of the Article 42 of the Trade Code.

In no case will an amount exceed the total income of the non-resident entity.

4. The income referred to in paragraph 2 of this Article shall not be included, where it corresponds to the tax expense of non-deductible entities resident in Spain.

5. The inclusion of entities resident in Spanish territory as referred to in subparagraph (a) of paragraph 1 shall be required to participate directly in the non-resident entity or indirectly through another or other non-resident entities. In the latter case the amount of the positive income shall be that corresponding to the indirect participation.

6. The inclusion shall be made in the tax period comprising the day on which the non-resident entity in Spanish territory has concluded its social exercise which, for these purposes, cannot be understood as a duration exceeding 12 months, unless the subject (a) to be included in the tax period which includes the day on which the accounts for that financial year are approved, provided that no more than six months after the date of its entry into force are approved; conclusion.

The option will be stated in the first tax return in which it has to take effect and must be maintained for three years.

7. The amount of the positive income to be included in the tax base shall be calculated in accordance with the principles and criteria laid down in this law and in the other provisions relating to this tax for the determination of the tax base. Total income shall mean the amount of the tax base resulting from the application of these same criteria and principles.

For these purposes, the exchange rate in force at the close of the social exercise of the non-resident entity in Spanish territory shall be used.

8. Dividends or shares in profits in the part corresponding to the positive income that has been included in the tax base shall not be included in the tax base. The same treatment will apply to dividends on account.

In the case of distribution of reserves, the designation contained in the social agreement shall be considered, the last amounts paid to those reserves being applied.

A single positive income may only be included for one time, whatever the form and entity in which it manifests.

9. The following concepts will be included in the full quota:

(a) Taxes or taxes of a nature identical or similar to this tax, effectively satisfied, in the part corresponding to the positive income included in the tax base.

They will be considered as effectively satisfied taxes, those paid by the non-resident entity as well as their participating companies, provided that they have the percentage of participation established in the Article 32.2 of this Act.

(b) The tax or levy actually paid abroad by reason of the distribution of dividends or shares in profits is in accordance with an agreement to avoid double taxation or in accordance with the domestic legislation of the country or territory concerned, in the part corresponding to the positive income previously included in the tax base.

Where the participation in the non-resident entity is indirect through another or other non-resident entities, the tax or charge of the same or similar nature shall be deducted from this tax effectively satisfied by the that or those in the part corresponding to the positive income previously included in the tax base.

These deductions will be practiced even if the taxes correspond to tax periods other than the one in which the inclusion was made.

In no case will the satisfied taxes be deducted in countries or territories that are regulated as tax havens.

The sum of the deductions in paragraphs (a) and (b) may not exceed the full quota that in Spain is payable for the positive income included in the tax base.

10. In order to calculate the income derived from the direct or indirect transmission of the holding, the acquisition value shall be increased by the amount of the positive income which, without effective distribution, would have been included in the taxable amount of the partners as income from their shares or units in the period of time between their acquisition and transmission.

In the case of companies which, according to the provisions of this law, should be regarded as assets, the value of transmission to be computed shall be at least the theoretical resulting from the last closed balance sheet, after the replacement of the the accounting value of assets for the value they would have for the purposes of the Heritage Tax or for the normal market value if this is lower.

11. The taxable persons to whom the provisions of this Article are applicable shall present together with the declaration by this tax the following data relating to the non-resident entity in Spanish territory:

a) Social name or reason and place of the registered office.

b) Relationship of administrators.

c) Balance and profit and loss account.

(d) Amount of positive income to be included in the tax base.

e) Justification of the satisfied tax on the positive income to be included in the tax base.

12. Where the participating entity resides in a country or territory qualified as a tax haven, it shall be presumed that:

(a) The circumstance provided for in paragraph 1 (b) is fulfilled.

(b) The income obtained by the participating entity comes from the sources of income referred to in paragraph 2.

c) The income obtained by the participating entity is 15 percent of the acquisition value of the holding.

The presumptions contained in the preceding paragraphs will be proof to the contrary.

The assumptions contained in the preceding paragraphs shall not apply when the participating entity consolidates its accounts, in accordance with Article 42 of the Trade Code, with some or some of the entities forced to include.

13. The provisions of this Article shall be without prejudice to the provisions of Articles 3 and 7.2 of this Law.

14. For the purposes of this Article, the group of companies referred to in Article 42 of the Trade Code shall be understood to be that provided for in Sections 1 and 2 of the first chapter of the rules for the formulation of the annual accounts. Consolidated accounts approved by Royal Decree 1815/1991 of 20 December 1991.

15. This Article shall not apply where the non-resident entity in Spanish territory is resident in another Member State of the European Union, except where it resides in a territory which is regulated as a tax haven.

CHAPTER XII

Tax Incentives for Small-Dimension Companies

Article 108. Scope: Business figure.

1. The tax incentives provided for in this Chapter shall apply provided that the net amount of the turnover in the preceding immediate tax period is less than EUR 6 million.

2. Where the entity is newly established, the amount of the turnover shall relate to the first tax period in which the activity actually takes place. If the previous immediate tax period has been shorter than the year, or the activity has been carried out for a period also lower, the net amount of the turnover shall be raised per year.

3. Where the institution is part of a group of companies within the meaning of Article 42 of the Trade Code, the net amount of the business figure shall relate to the set of entities belonging to that group. This criterion shall also apply where a natural person alone or in conjunction with other natural persons joined by direct or collateral, consanguine or affinity links, to the second degree inclusive, find in relation to other entities of which they are partners in any of the cases referred to in Article 42 of the Trade Code.

For the purposes of this paragraph, the cases in Article 42 of the Trade Code shall be understood to be those referred to in Section 1 of Chapter I of the rules for the formulation of consolidated annual accounts, approved by Royal Decree 1815/1991 of 20 December.

Article 109. Freedom of amortisation.

1. The elements of the fixed new material, made available to the taxable person in the tax period in which the conditions of the preceding article are fulfilled, may be freely amortised provided that, during the 24 months following the date of the start of the tax period on which the purchased goods become operational, the total average template of the company is increased from the average of the previous 12 months, and that increase is maintained for an additional period of 24 months.

The amount of the investment that may benefit from the redemption regime will be the amount of EUR 90,151.82 to be multiplied by the reported increase calculated with two decimal places.

For the calculation of the total average company template and its increase will be taken by the employed persons, in the terms that the labor legislation has, taking into account the day contracted in relation to the working day complete.

The freedom of redemption shall be applicable from the entry into operation of the items eligible for it.

2. The scheme provided for in the preceding paragraph shall also apply to the elements entrusted under a contract for the execution of works subscribed to in the tax period, provided that they are made available within 12 months of the their conclusion.

3. The provisions of the two preceding paragraphs shall also apply to the elements of the fixed assets constructed by the undertaking itself.

4. The freedom to write off will be incompatible with the following tax benefits:

(a) The bonus for export activities, in respect of the items in which the profits are invested.

(b) Reinvestment of extraordinary profits, the reinvestment exemption and the deduction for reinvestment of extraordinary profits, in respect of the items in which the amount of the transmission is reinvested.

5. In the event of the transfer of items which have been granted free of charge, only the income obtained by difference between the transmission value and its book value, once corrected in the amount, may be eligible for the reinvestment exemption. of currency depreciation.

6. In the event that the obligation to increase or maintain the template is breached, the full quota which has been allocated to the amount deducted in excess of the corresponding interest on arrears shall be entered into the template.

The entry of the full quota and the interest on late payment shall be made in conjunction with the self-settlement for the tax period in which one or another obligation has been breached.

7. The provisions of this Article shall also apply to the elements of the fixed assets new subject to a leasing contract, provided that the option to purchase is exercised.

Article 110. Freedom of amortization for low-value investments.

The elements of the fixed new material will be made available to the taxable person in the tax period in which the conditions of Article 108 of this Law are met, the unit value of which does not exceed EUR 601,01, to be freely amortised, up to the limit of 12,020,24 euros referred to in the tax period.

Article 111. Depreciation of fixed new material and intangible fixed assets.

1. The elements of the new material, as well as the elements of the intangible fixed assets, made available to the taxable person in the tax period in which the conditions of Article 108 of the law are fulfilled, may be amortised in the ratio of the coefficient to be multiplied by 1,5 the maximum linear depreciation coefficient provided for in the officially approved depreciation tables.

2. The scheme provided for in the preceding paragraph shall also apply to the elements entrusted under a contract for the execution of works subscribed to in the tax period, provided that they are made available within 12 months of the their conclusion.

3. The provisions of the two preceding paragraphs shall also apply to the elements of tangible or intangible fixed assets constructed or produced by the undertaking itself.

4. The amortisation scheme provided for in this Article shall be compatible with any tax benefit which may be carried out by reason of the assets subject to it.

5. The elements of the intangible fixed assets referred to in Article 11 (4) and (5) of this Act, provided that the conditions laid down therein are met, acquired in the tax period in which the conditions of the Article 108 of this law may be amortised by 150% of the depreciation resulting from the application of those paragraphs.

6. The deduction of the excess of the amortised amount resulting from the provisions of this Article in respect of the depreciation actually given shall not be conditional upon its accounting imputation to the profit and loss account.

Article 112. Allocation for possible insolvencies of debtors.

1. In the tax period in which the conditions of Article 108 are met, an allocation for the risk coverage arising out of possible insolvencies up to the 1% limit on existing debtors to be deducted shall be deductible. conclusion of the tax period.

2. Debtors in respect of which the provision for insolvencies laid down in Article 12 (2) of this Law has been provided and those other whose allocations are not deductible as provided for in that Article shall not be included among the debtors referred to in the previous paragraph.

3. The balance of the provision provided in accordance with paragraph 1 shall not exceed the limit referred to in that paragraph.

4. The appropriations for the coverage of the risk arising from the possible insolvencies of the debtors, carried out in the tax periods in which the conditions of Article 108 of this Law no longer apply, shall not be deductible until the amount of the balance of the provision referred to in paragraph 1.

Article 113. Depreciation of property assets subject to reinvestment.

1. The elements of the immobilised material affected by economic holdings in which the reinvestment of the amount obtained in the onerous transmission of items of the material immobilised, also affected by economic holdings, is materialised; made in the tax period in which the conditions of Article 108 of this Law are met, may be amortised on the basis of the coefficient resulting from multiplying by 3 the maximum linear depreciation coefficient provided for in the Officially approved depreciation. Reinvestment must be made within the time limit referred to in Article 42 (4) of this Act.

2. Where the amount invested is higher or lower than the amount obtained in the transmission, the amortisation referred to in the preceding paragraph shall apply only to the amount of such transmission that is the subject of reinvestment.

3. The deduction of the excess amount of depreciation resulting from the provisions of this Article in respect of the depreciation actually given shall not be conditional upon its accounting imputation on the profit and loss account.

Article 114. Type of lien.

Entities that meet the forecasts provided for in Article 108 of this Act shall be taxed on the basis of the following scale, except if, in accordance with Article 28 of this Act, they are to be taxed at a different rate than the general:

a) For the taxable amount between 0 and 90,151,81 euros, at the rate of 30 percent.

b) For the remaining taxable amount, at the rate of 35 percent.

When the tax period is shorter than the year, the proportion of the tax base that will be taxed at the rate of 30% will be that resulting from the application to EUR 90,151,81 of the proportion in which the number of days is found of the tax period between 365 days, or the taxable amount of the tax period when it is lower.

CHAPTER XIII

Fiscal regime for certain finance lease contracts

Article 115. Leasing contracts.

1. The provisions of this Article shall apply to the leasing contracts referred to in paragraph 1 of the seventh additional provision of Law 26/1988 of 29 July on the discipline and intervention of credit institutions.

2. The contracts referred to in the preceding paragraph shall be of a minimum duration of two years when they are for the purpose of movable property and of 10 years when they are for the purpose of immovable property or industrial establishments. However, in order to avoid abusive practices, other minimum periods of time may be laid down according to the characteristics of the various goods which may constitute their object.

3. The leasing fees shall be expressed in the respective contracts by differentiating the part corresponding to the recovery of the cost of the good by the leasing entity, excluding the value of the purchase option and the charge This is without prejudice to the application of the indirect tax applicable to it.

4. The annual amount of the part of the leasing fees corresponding to the recovery of the cost of the good must remain the same or be increased throughout the contractual period.

5. It shall in any event have the consideration of fiscally deductible expenditure on the financial burden to the leasing entity.

6. The same consideration shall be given to the part of the financial leasing fees paid in respect of the recovery of the cost of the good, except where the contract is for land, solar and other non-depreciable assets. In the event that such a condition exists only in part of the object of the transaction, only the proportion corresponding to the items eligible for depreciation may be deducted, which must be expressed in a differentiated manner in the respective contract.

The amount of the amount deductible in accordance with the provisions of the preceding paragraph may not exceed the result of applying to the cost of the good the double of the linear depreciation coefficient according to depreciation tables officially approved corresponding to the said good. The excess will be deductible in the successive tax periods, respecting the same limit. For the calculation of the above limit, account shall be taken of the time when the goods are put into operation.

Dealing with the taxable persons referred to in Chapter XII of Title VII, the doubling of the linear depreciation coefficient shall be taken according to officially approved amortisation tables multiplied by 1,5.

7. The deduction of the amounts referred to in the preceding paragraph shall not be conditional upon their accounting imputation on the profit and loss account.

8. The leasing entities shall write down the cost of each and every asset purchased for their financial lease, deducted the value entered in each contract for the exercise of the purchase option, within the period of validity of the contract. stipulated for the respective contract.

9. The provisions of Article 11.3 of this Law shall not apply to leasing contracts covered by this Article.

10. The elements of the fixed new material which are the subject of a leasing contract may be subject to the tax incentive provided for in paragraph 2 of the third final provision in the terms provided for in the corresponding State General Budget Law.

11. The Ministry of Finance may determine, in accordance with the procedure laid down in the Rules of Procedure, the temporary time referred to in paragraph 6, taking into account the specificities of the period of employment or the construction of the good, as to the singularities of their economic use, provided that such determination does not affect the calculation of the tax base arising from the actual use of the good, nor the income derived from its transmission to be determined according to the rules of the general scheme of excise duty or special arrangements provided for in Chapter VIII of the Title VII of this law.

CHAPTER XIV

Foreign Securities Holding Entities ' Regime

Article 116. Foreign securities holding entities.

1. Institutions whose social object includes the management and administration of securities representative of the own funds of non-resident entities on Spanish territory may be eligible under the scheme provided for in this Chapter. corresponding organization of material and personal means.

The securities or shares representative of the holding in the capital of the holding of foreign securities shall be nominative.

Entities subject to the special schemes of economic, Spanish and European interest groups and temporary unions of companies or of heritage companies shall not be eligible for the scheme of this Chapter.

2. The option for the regime of foreign securities holding entities shall be communicated to the Ministry of Finance. The scheme shall apply to the tax period ending after that communication and to the subsequent subsequent tax period before the Ministry of Finance is notified of the waiver of the scheme.

The requirements of the communication and the content of the information to be supplied with it may be established.

Article 117. Income derived from the holding of securities representing the own funds of non-resident entities on Spanish territory.

dividends or shares in profits of non-resident entities on Spanish territory, as well as the income from the transfer of the corresponding share, may enjoy the exemption to avoid double taxation. international economic taxation under the conditions and with the requirements laid down in Article 21 of this Act.

For the purposes of applying the exemption, the minimum participation requirement referred to in Article 21 (1) (a) shall be deemed to be met if the acquisition value of the holding exceeds 6%. EUR million. The indirect participation of the holding of foreign securities on its subsidiaries of a second or a later level, for the purposes of applying the provisions of Article 21.1.c) .2. of this law, shall respect the minimum percentage of five per cent. (a) unless such subsidiaries meet the circumstances referred to in Article 42 of the Trade Code to be part of the same group of companies with the foreign entity directly involved and formulate accounting statements consolidated.

Article 118. Profit distribution. Transmission of participation.

1. The benefits distributed from the exempt income referred to in the previous article shall be treated as follows:

(a) When the recipient is an entity subject to this tax, the perceived benefits shall entitle the deduction by double taxation of dividends in the terms set out in Article 30 of this Act.

b) When the recipient is a taxpayer of the Income Tax of the Physical Persons, the distributed benefit shall not entitle the deduction for double taxation of dividends, but the deduction may be applied for double international taxation in accordance with the terms of Article 82 of the recast of the Income Tax Act, in respect of taxes paid abroad by the securities holding entity and which correspond to the exempt income which has contributed to the formation of the perceived benefits.

(c) When the recipient is a non-resident entity or natural person in Spanish territory, the distributed benefit shall not be understood as obtained on Spanish territory.

In the case of a permanent establishment situated on Spanish territory, the provisions of paragraph (a) shall apply. The distribution of the emission premium will have the treatment provided for in this paragraph for profit distribution. For these purposes, the first distributed profit shall be deemed to be from exempt income.

2. The income obtained in the transfer of the holding in the securities holding entity or in the case of separation of the partner or liquidation of the entity shall be treated as follows:

(a) When the recipient is an entity subject to this tax or a permanent establishment located in Spanish territory, and meets the requirement of participation in the foreign securities holding entity established in the Article 30 (5) of this law may apply the internal double taxation deduction in accordance with the terms laid down in that Article. In the same case, it may apply the exemption provided for in Article 21 of this Act to that part of the income obtained which corresponds to differences in value attributable to the shares in non-resident entities in respect of which the foreign securities holding entity complies with the requirements set out in Article 21 for the exemption of foreign source income.

(b) Where the recipient is an entity or a natural person not resident in Spanish territory, the income corresponding to the reserves with the exempt income to which the recipient is not resident shall not be understood to be obtained in Spanish territory. refers to Article 21 or to differences in value attributable to holdings in non-resident entities that meet the requirements referred to in that Article for the exemption of foreign source income.

3. The securities holding entity shall mention in the memory the amount of the exempt income and the taxes paid abroad corresponding to them, as well as to provide its partners with the information necessary to enable them to comply with the provided for in the preceding paragraphs.

4. The provisions of paragraph 1 (c) and subparagraph (b) of paragraph 2 of this Article shall not apply where the recipient of the income resides in a country or territory which is regulated as a tax haven.

Article 119. Application of this scheme.

1. The enjoyment of the scheme shall be conditional upon compliance with the factual assumptions relating to it, which shall be tested by the taxable person at the request of the tax administration.

2. The non-cash contributions of the securities representing the own funds of non-resident entities in Spanish territory shall be subject to the arrangements provided for in Article 94 of this Law, whichever is the percentage of participation in the the securities holding entity that such contributions confer, provided that the income derived from such securities is eligible for the scheme set out in Article 21 of this Act.

CHAPTER XV

Partially Exempt Entities Scheme

Article 120. Scope of application.

This scheme shall apply to the entities referred to in Article 9 (3) of this Act.

Article 121. Exempt income.

1. The following income obtained by the entities referred to in the previous Article shall be exempt:

(a) Those that come from the performance of activities that constitute their social object or specific purpose.

For the purposes of the application of this regime to the Entity of Public Law Ports of the State and to the Harbour Authorities will be considered not to come from the realization of economic exploitations the tax and those from the exercise of the sanctioning power and the administrative activity carried out by the Harbour Authorities, as well as those from the activity of coordination and efficiency control of the harbour system conducted by the Ente Público Ports of the State.

(b) Derivatives of acquisitions and transfers for a profit, provided that some and other are obtained or performed in compliance with their specific object or purpose.

(c) Those which are shown in the onerous transmission of goods affected by the specific purpose or purpose when the total product obtained is intended for new investments related to that object or specific purpose.

The new investments must be made within the period from the year before the date of the delivery or making available to the assets element and the three years after and to remain in the assets of the for seven years, except that the life of the institution in accordance with the method of depreciation, of those permitted under Article 11.1 of this Law, which is applied is lower.

If the investment is not made within the time limit, the part of the full share corresponding to the income obtained will be entered, in addition to the interest on the delay, together with the quota corresponding to the period the tax on which he won.

The transmission of such items before the end of the term of office shall determine the integration into the taxable amount of the non-taxed part of the income, unless the amount obtained is the subject of a new reinvestment.

2. The exemption referred to in the preceding paragraph shall not cover income from economic holdings, income derived from the assets, or income obtained from transmissions other than those mentioned in it.

3. The income of an economic holding shall be regarded as income of all those who, in the case of personal and capital work together, or of only one of these factors, assume that the taxable person is to be employed by the means of production and human resources or of one of them for the purpose of intervening in the production or distribution of goods or services.

Article 122. Determination of the tax base.

1. The tax base shall be determined by applying the rules laid down in Title IV of this Law.

2. They shall not have the consideration of fiscally deductible expenses, in addition to those laid down in Article 14 of this Act, the following:

(a) Expenses attributable exclusively to exempt income. Expenditure in part attributable to non-exempt income shall be deductible in the percentage representing the income earned in the exercise of non-exempt economic holdings in respect of the total income of the institution.

(b) the amounts which are the result of the application of the results and, in particular, those which are intended to support the exempt activities referred to in paragraph 1 (a) of the previous Article.

CHAPTER XVI

Communities scheme of common hand neighborhood mountain holders

Article 123. Regime of communities with common hand-held neighborhood mounts.

1. The taxable base for the communities holding common hand-side neighbourhood mounts shall be reduced by the amount of the profit for the financial year applied to:

(a) Investments for the conservation, improvement, protection, access and services intended for the social use to which the mount is intended.

b) Financing of infrastructure and public services, of social interest.

The application of the benefit to the indicated purposes must be carried out in the tax period itself or in the following three. If the investment is not made within the time limit, the part of the full quota corresponding to the profits not actually applied to the investments described, together with the interest for late payment, shall be entered in conjunction with the quota for the tax period in which that period expired.

The tax administration, in the verification of the destination of the investments indicated, may request the necessary reports from the competent regional and local administrations.

2. The common hand-holding communities shall be taxed at the rate provided for in Article 28 (2) of this Act.

3. Communities holding common hand-held neighbourhood shall not be required to make a declaration for this tax in those tax periods in which they do not obtain any income under this tax, or incur any expenditure, or make such payments. investments referred to in paragraph 1.

4. The members or members of the communities who hold common hand-held neighborhood mountains shall integrate into the base of the Income Tax of the Physical Persons the amounts that are effectively distributed to them by the community. Such income shall be treated as intended for the benefit of an institution in accordance with Article 23 (1) of the recast of the Income Tax Act of the Physical Persons and shall apply to them. percentages corresponding to the entities in Article 28.2 of this Act.

CHAPTER XVII

Shipping entities ' regime based on tonnage

Article 124. Scope of application.

1. The special arrangements provided for in this Chapter may be covered by the entities registered in one of the registers of shipping companies referred to in Law 27/1992 of 24 November 1992, of Ports of the State and of the Merchant Navy, whose activity includes the operation of own or leased vessels.

2. Vessels whose exploitation makes it possible to apply the scheme must meet the following requirements:

a) Be strategically and commercially managed from Spain or from the rest of the European Union.

For these purposes, it is understood by strategic and commercial management, the assumption by the owner of the ship or by the tenant, of the control and risk of the activity of sea navigation or of works in the sea.

(b) To be vessels suitable for offshore navigation and to be exclusively intended for one of the following activities:

Transportation of goods.

Passenger transport.

Rescue, towing and other services necessarily provided on the high seas.

3. Vessels intended for fishing, sport, dredging and recreational activities shall not be eligible for the benefit of this scheme.

Article 125. Determination of the tax base by the objective estimation method.

1. Entities covered by this scheme shall determine the taxable amount which corresponds to the holding or ownership of the vessels meeting the requirements of the previous Article, applying to the net registration tonnes of each of the such vessels the following scale:

	Record Tons	Daily Amount per 100 tonnes - Euros
0 and up to 1,000
1,001 and up to 10,000
10.001 and up to 25,000
From 25.001	0.20

For the application of the scale, the days of the tax period on which the vessels are at the disposal of the taxable person shall be taken, excluding days where they are not operational as a result of ordinary repairs or extraordinary.

The application of this scheme shall cover the whole of the applicant's vessels which comply with the requirements of the applicant, and the vessels that are acquired or arrived after the authorisation, provided that they comply with those requirements. requirements, being eligible for the vessels taken in chartering, provided that the sum of their net tonnage does not exceed 75% of the total fleet of the entity or, where applicable, of the tax group subject to the scheme. In the case of entities that are taxed in the tax consolidation regime, the application shall be related to all entities in the tax group that comply with the requirements of Article 124.

2. The positive or negative income which, if any, becomes apparent as a result of the transmission of a vessel affected this scheme, shall be considered as an integrated basis in the tax base calculated in accordance with the previous paragraph.

Notwithstanding the provisions of the preceding paragraph, in the case of vessels whose ownership was already held when this special scheme was granted, or of used vessels acquired after its implementation, the next mode:

In the first financial year in which the scheme is applied, or where the vessels used have been acquired, an unavailable reserve shall be provided for an amount equal to the positive difference between the normal value of the the market and the net accounting value of each of the vessels affected by this rule, or the difference shall be specified separately for each of the vessels and for all the financial years in which the vessel's ownership is maintained; the memory of their annual accounts. In the case of vessels acquired through an operation to which the special scheme of Chapter VIII of Title VII of this Law has been applied, the net book value shall be determined on the basis of the acquisition value for which it appears in the accounting of the transmitting entity.

Failure to comply with the obligation to make the reservation or the obligation to mention in the memory will constitute a serious tax violation, with a penalty of five per cent of the financial penalty. amount of the said difference.

The penalty imposed in accordance with this paragraph shall be reduced in accordance with the provisions of Article 188 (3) of Law 58/2003 of 17 December, General Tax.

The amount of the said positive reserve, together with the positive difference on the date of the transfer between the tax and accounting amortisation of the vessel, will be added to the tax base referred to in the first of this Article when the said transmission has occurred. The same shall apply if the vessel is transmitted, directly or indirectly, on the occasion of an operation to which the special scheme of Chapter VIII of Title VII of this Law applies.

3. The taxable amount determined in accordance with paragraph 1 of this Article shall not be compensated by negative tax bases resulting from the other activities of the shipping entity, or from the current or previous financial year, or with the taxable bases to be compensated at the time of application of this scheme.

4. The determination of the part of the taxable amount corresponding to the other activities of the taxable person shall be determined by applying the general scheme of the tax, taking into account only the income from them.

This part of the taxable amount shall be made up of all revenue which does not come exclusively from the holding or ownership of the vessels under this scheme, for the costs directly related to the acquisition of These, as well as for the part of the general administrative expenses that are proportional to the amount of business generated by these activities.

For the purposes of compliance with this scheme, the entity must have the necessary accounting records in order to be able to determine the direct or indirect revenue and expenditure for each of the vessels covered by the scheme. this, as well as the assets involved in their operation.

Article 126. Type of levy and fee.

1. In any event, the general rate of charge provided for in the first paragraph of Article 28 of this Law shall apply.

2. The part of the full quota attributable to the part of the taxable amount determined in accordance with Article 125 (1) shall not be reduced by the application of any deduction or bonus.

Furthermore, the acquisition of ships that are affected by this regime shall not entail the application of any tax incentive or deduction.

The full share of the taxable amount that comes from the rest of the tax base cannot be reduced by the application of deductions generated by the acquisition of the ships referred to prior to their affectation to the regulated regime in this chapter.

Article 127. Split payments.

The taxable persons who are engaged in this scheme will have to make instalments in accordance with the modality laid down in Article 45 (3) of this law on the taxable amount calculated on the basis of the rules laid down in Article 125 and applying the percentage referred to in Article 126, without taking into account any deduction of the share of the share of the taxable amount determined in accordance with the provisions of Article 126 (1) 125.

Article 128. Application of the scheme.

1. The tax regime provided for in this Chapter shall apply as follows:

(a) Your application shall be subject to authorization by the Ministry of Finance upon request of the taxable person. This authorisation shall be granted for a period of 10 years from the date of the authorisation, and may be extended for additional periods of another 10 years.

(b) The application shall specify the tax period from which it is to take effect and shall be submitted at least three months before the start of the period.

(c) The application shall be settled within the maximum period of three months, after which it may be deemed to be dismissed.

For the granting of the scheme, the Ministry of Finance will take into account the existence of an effective contribution to the objectives of the Community's maritime transport policy, especially as regards the technological level (a) of vessels ensuring safety in the navigation and prevention of pollution of the environment and the maintenance of Community employment both on board and in ancillary tasks to maritime transport. For this purpose, it may obtain prior information from the competent bodies.

(d) Failure to comply with the conditions of the scheme or the waiver of its application shall prevent a further application from being made until a minimum of five years has elapsed.

e) The tax administration may verify the correct application of the scheme and the concurrency in each exercise of the requirements required for its application.

2. Failure to comply with the requirements laid down in this scheme shall entail the cessation of the effects of the authorization concerned and the loss of all the tax benefits derived therefrom, and shall, together with the the tax period in which the non-compliance occurred, the full amounts corresponding to the amounts which would have been due to be paid under the general scheme of this tax, in the whole of the financial years to which it was application of the authorisation, without prejudice to the interests of delay, surcharges and penalties which, in its Case, result.

3. The application of the tax regime provided for in this Chapter shall be incompatible with the application of the fifth additional provision of this law for the same vessel.

CHAPTER XVIII

System of sports entities

Article 129. Arrangements for sports entities.

1. The increase in assets which can be made manifest as a result of the professional team's attachment to a newly created Sports Company will not be integrated into the tax base of the Company Tax. is fully in line with the rules laid down in Law 10/1990 of 15 October of the Sport and the Royal Decrees 1084/1991 of 5 July, and 1251/1999 of 16 July 1999 on Anonymous Sports Companies.

2. The Sports Anonymous Company shall calculate, for tax purposes, the increases and decreases in the assets, as well as the write-downs corresponding to the goods and rights which are the subject of the subscription, on the same values and on the same conditions which would have been applicable to the sports club attached to the professional team.

3. The Sports Anonymous Company shall be subrogated in the rights, obligations and responsibilities of a tax nature of which the sports club was held by the professional team for the purpose of the assets and liabilities assigned to it. compliance with the necessary burdens and requirements to continue in the enjoyment of the tax benefits or to consolidate the enjoyed by the sports club that the professional team attached.

In no case shall the right to loss compensation be understood.

TITLE VIII

Tax Management

CHAPTER I

The Entity Index

Article 130. Index of entities.

1. Each Delegation of the State Tax Administration Agency shall include an index of entities in which they shall be registered as having their registered office within their territorial scope, except for the entities referred to in Article 9.

2. The procedures for high, enrollment and low in the index of entities will be established.

Article 131. Low in the entity index.

1. The State Tax Administration Agency shall, after hearing the parties concerned, make a provisional discharge in the following cases:

(a) When the tax debts of the entity to the public treasury of the State are declared failed in accordance with the provisions of the General Tax Collection Regulation.

b) When the entity has not filed the declaration for this tax for three consecutive tax periods.

2. The interim discharge agreement shall be notified to the relevant public register, which shall extend the open sheet to the institution concerned a marginal note in which it shall be stated that no such statement may be made. registration as to that concern without presentation of certification of high in the index of entities.

3. The interim low agreement does not exempt the affected entity from any of the tax obligations that may be incumbent upon it.

Article 132. Obligation of collaboration.

The holders of the public records shall forward monthly to the State Agency of Tax Administration of their tax domicile a relationship of the entities whose constitution, establishment, modification or extinction have registered during the previous month.

CHAPTER II

Accounting obligations. Goods and rights not accounted for. Voluntary revaluations

Article 133. Accounting obligations. Powers of the Tax Administration.

1. The taxable persons of this tax shall keep their accounts in accordance with the provisions of the Trade Code or with the provisions of the rules for which they are governed.

In any event, the taxable persons referred to in Chapter XV of Title VII of this Law shall keep their accounts in such a way as to permit the identification of income and expenditure relating to income and economic holdings. exempt.

2. The tax authorities may carry out the verification and investigation by examination of the accounts, books, correspondence, documentation and jus relating to the business of the taxable person, including the accounting and magnetic files and supports. The tax authorities may directly analyse the documentation and the other elements referred to in the preceding paragraph, and may take note of their agents from the accounting notes which are estimated to be accurate and obtain copies of them. charge, including on magnetic media, of any of the data or documents referred to in this paragraph.

3. The dominant entities of the companies ' groups in Article 42 of the Code of Commerce shall be obliged, at the request of the Inspectorate of the Taxation in the course of the verification procedure, to provide the account of losses and earnings and the balance sheet of the entities belonging to the group that are not resident in Spanish territory. They shall also provide supporting documents and other records relating to such accounting documentation where they may be relevant to this tax.

Article 134. Goods and rights not accounted for or not declared: presumption of obtaining income.

1. It shall be presumed that they have been acquired from non-declared income the assets of which ownership is the responsibility of the taxable person and are not recorded in their books of accounts.

The presumption will also proceed in the case of partial concealment of the acquisition value.

2. It shall be presumed that the assets not recorded in accounting are the property of the taxable person when he holds the holding.

3. The amount of the non-declared income shall be presumed to be the value of the acquisition of the goods or rights not recorded in books of accounts, which are mined in the amount of the actual debts incurred to finance such acquisition, accounts. In no case shall the net amount be negative.

The amount of the acquisition value shall be proved through the supporting documents of the acquisition or, if not possible, by applying the valuation rules set out in the General Tax Act.

4. The existence of undeclared income shall be presumed where the non-existent debts have been recorded in the accounts of the taxable person.

5. The amount of the income resulting from the assumptions contained in the preceding paragraphs shall be charged to the oldest tax period of the non-prescribed, except that the taxable person proves that it corresponds to another or another.

6. The value of the assets referred to in paragraph 1, as soon as it has been incorporated into the tax base, shall be valid for all tax purposes.

Article 135. Voluntary accounting revaluations.

1. Taxable persons who have made accounting revaluations the amount of which has not been included in the tax base shall mention in the accounts the amount of those items, the items concerned and the period or periods of tax in which they are practiced.

The above mentioned particulars must be made in each and every one of the memories corresponding to the exercises in which the revalorized elements are found in the assets of the taxable person.

2. A gross tax breach shall be a breach of the obligation laid down in the previous paragraph.

Such an infringement shall be punishable, for a single time, by a proportional pecuniary fine of five per cent of the amount of the revaluation, the payment of which shall not determine that the amount is incorporated, for tax purposes, at the value of the of the patrimonial element to be revalued.

The penalty imposed in accordance with this paragraph shall be reduced in accordance with the provisions of Article 188 (3) of Law 58/2003 of 17 December, General Tax.

CHAPTER III

Statement, Autoliquidation and Interim Settlement

Article 136. Statements.

1. Taxable persons shall be required to present and subscribe to a declaration for this tax at the place and the form to be determined by the Minister of Finance.

The declaration shall be filed within 25 calendar days following the six months after the end of the tax period.

If, at the beginning of the indicated period, the Minister of Finance has not determined how to present the declaration of that tax period, the declaration will be filed within 25 calendar days of the date of the filing. the entry into force of the rule determining that form of presentation. However, in such cases the taxable person may choose to make the declaration within the time limit referred to in the preceding paragraph in accordance with the formal requirements laid down for the tax period declaration. precedent.

2. The exempt taxable persons referred to in Article 9 of this Law shall not be required to declare.

3. The taxable persons referred to in Chapter XV of Title VII of this Law shall be required to declare all their income, exempt and not exempt.

However, those taxable persons shall not be required to make a statement when they meet the following requirements:

a) That your total income does not exceed 100,000 euros per year.

(b) That the revenue for non-exempt income subject to retention does not exceed EUR 2 000 per year.

c) That all non-exempt income that they obtain is subject to retention.

Article 137. Self-validation and income of the tax liability.

1. The taxable persons shall, at the time of filing their declaration, determine the corresponding debt and enter it in the place and in the form determined by the Minister of Finance.

2. The payment of the tax liability may be made by the delivery of goods belonging to the Spanish Historical Heritage that are registered in the General Inventory of movable property or in the General Register of goods of cultural interest, according to the provisions of Article 73 of Law 16/1985 of 25 June of the Spanish Historical Heritage.

3. The right to enjoy exemptions, deductions or any tax incentive in the tax base or in the full quota shall be conditional upon the fulfilment of the requirements laid down in the applicable regulations.

Unless otherwise specified, when after the application of the exemption, deduction or tax incentive occurs the loss of the right to enjoy it, the taxable person must enter together with the fee for the tax period in which the non-compliance with the requirements or conditions is due to the full quota or amount deducted corresponding to the exemption, deduction or incentive applied in previous periods, in addition to the interest of delay.

Article 138. Provisional settlement.

The tax management bodies may be able to turn the provisional settlement as appropriate in accordance with the provisions of Articles 133 and 139 of Law 58/2003 of 17 December, General Tax, without prejudice to the subsequent checking and investigation that the Tax Inspectorate can carry out.

CHAPTER IV

Return of trade

Article 139. Return of trade.

1. Where the sum of the withholding tax and the revenue from the instalments is greater than the amount of the quota resulting from the reverse charge, the tax authorities shall, where appropriate, carry out provisional liquidation within the limits of the amount of the six months following the end of the time limit set for the submission of the declaration.

When the declaration has been filed out of time, the six months referred to in the preceding paragraph shall be computed from the date of its filing.

2. Where the quota resulting from the reverse charge or, where appropriate, the provisional liquidation is less than the sum of the amounts actually withheld, revenue to be paid and payments broken down, the tax administration shall return the (a) the excess over the said quota, without prejudice to the practice of subsequent provisional or final liquidations, which may be carried out.

3. If the provisional liquidation has not been carried out within the period laid down in paragraph 1 above, the tax administration shall, without prejudice to the practice, give the excess over the quota resulting from the reverse of its own motion. of any subsequent provisional or final settlement which may result.

4. After the period laid down in paragraph 1 of this Article without the payment of the refund due to the tax authorities having been ordered, the amount due shall be applied to the amount of the interest for late payment. refers to Article 26.6 of Law 58/2003 of 17 December 2003, General Tax, from the day following the end of that period and up to the date of order of payment, without the need for the taxable person to claim it.

5. The procedure and the form of payment for the performance of the return of trade referred to in this Article shall be determined.

CHAPTER V

Obligation to retain and enter into account.
Obligations in relation to the tax domicile

Article 140. Withholding and income on account.

1. Institutions, including communities of property and owners, who satisfy or pay income under this tax, shall be obliged to retain or to make income on account, as a payment on account, of the amount to be applied the rates of retention referred to in paragraph 6 of this Article to the statutory withholding tax, and to enter the amount in the Treasury in the cases and forms to be established.

They will also be required to retain and enter individual entrepreneurs and professionals with respect to the income they satisfy or pay in the exercise of their business or professional activities, as well as natural, legal and other non-resident entities in Spanish territory which operate on it by permanent establishment.

You shall also be required to hold or take into account the designated representative in accordance with the provisions of Article 86.1 and the additional 17th of Law 30/1995 of 8 November of ordination and supervision of private insurance, acting on behalf of the insurance undertaking operating under the freedom to provide services, in relation to operations carried out in Spain.

2. The subject obliged to retain must submit within the time-limits, form and places to be laid down in the rules of procedure a declaration of the quantities withheld or negative declaration where the practice of such quantities has not been produced. It shall also present an annual summary of retentions with the content to be determined regulatively.

The corresponding declaration models will be approved by the Minister of Finance.

3. The subject obliged to retain shall be obliged to issue, under the conditions laid down in regulation, certification of the withholding tax or other payments made to the accounts.

4. The assumptions in which there will be no retention shall be laid down. In particular, no retention shall be performed on:

(a) The income obtained by the entities referred to in Article 9.1 of this Law.

(b) dividends or shares in profits distributed by economic, Spanish and European interest groups, and by temporary unions of undertakings which correspond to partners which are to bear the allocation of the base taxable persons and who come from tax periods during which the institution has been taxed in accordance with the special rules of Chapter II of Title VII of this Law.

(c) dividends or interests in profit and interest between companies that are part of a group that is taxed in the corporate group scheme.

(d) The dividends or holdings in profits referred to in Article 30 (2) of this Act.

e) The income from the change of assets in which the provisions of life insurance are invested in which the taker assumes the risk of the investment.

5. Where, by virtue of a judicial or administrative decision, an income subject to withholding or withholding tax is to be satisfied, the payer must practise it on the full amount which he must satisfy and must enter his/her amount in the Treasury, as provided for in this Article.

6. The percentage of retention or income on account will be as follows:

a) With a general character, 15 percent.

In the case of income from the lease or sub-lease of urban buildings located in Ceuta, Melilla or its premises, obtained by entities domiciled in or operating in those territories, establishment or branch, this percentage being divided by two.

(b) In the case of income from the transfer of the right to the exploitation of the image or the consent or authorisation for its use, 20%.

Reglamentarily the retention and entry-to-account percentages provided for in this paragraph may be modified.

Article 141. Rules on retention, transmission and formal obligations relating to financial assets and other transferable securities.

1. In the case of transfers or repayments of shares or units representing the capital or assets of the collective investment institutions, they shall be required to carry out withholding tax, in cases and in the form of such taxes. to be established, the managing, managing, depository, marketing or other entities in charge of the operations referred to above, as well as the representative appointed in accordance with the provisions of Article 55.7; and the second provision of Law 35/2003, of 4 November, of institutions of collective investment, acting on behalf of the manager operating under the freedom to provide services.

The obligation to make payments on account of the transfer of shares and units of collective investment institutions may be established, with the limit of 20 percent of the income obtained in the Such transmissions.

2. For the purposes of the obligation to retain on the implied returns of capital, account of this tax, this withholding shall be made by the following persons or entities:

(a) In the returns obtained in the transmission or redemption of the financial assets on which the obligation to retain was established, the holding shall be the issuing institution or the institutions. financial management of the operation.

(b) In returns obtained in transmissions relating to transactions that are not documented in securities, as well as in the transmissions entrusted to a financial institution, the retainer shall be the Bank, Caja or entity acting by Account of the transmittent.

(c) In cases not listed in the preceding paragraphs, the intervention of the public purse shall be compulsory for the relevant retention.

3. In order to transfer or obtain the repayment of securities or assets with implied returns to be withheld, their prior acquisition shall be credited with the intervention of the financial institutions or financial institutions. mentioned in the previous section, as well as the price at which the operation was performed.

The issuer or financial institutions in charge of the transaction which, in accordance with the preceding paragraph, are not required to repay the holder of the title or asset, shall constitute such a deposit at the disposal of the judicial authority.

4. The public authorities involved in the issuance, subscription, transmission, exchange, conversion, cancellation and redemption of public effects, securities or any other securities and financial assets, as well as in transactions relating to (a) the right to communicate such transactions to the tax authorities by submitting a nominal relationship of the interveners with an indication of their domicile and the number of tax identification, class and number of the public effects, securities, securities and assets, as well as the price and date of the transaction, the time limits and in accordance with the model determined by the Minister of Finance.

The same obligation shall be on credit institutions and financial institutions, securities companies and agencies, other financial intermediaries and any natural or legal person who is engaged in habituality. to the intermediation and placement of public effects, securities or any other securities of financial assets, indices, futures and options on them; including documents by means of account, in respect of transactions involving, directly or indirectly, the acquisition or placement of resources through any class of values or effects.

The management companies of collective investment institutions shall also be subject to this reporting obligation in respect of shares and units in such institutions.

The reporting obligations set out in this paragraph shall be understood to be fulfilled in respect of the transactions subject to the withholding tax referred to in this paragraph, with the presentation of the recipients ' ratio, adjusted to the official model. of the corresponding annual withholding summary.

5. The issuing of certificates, certificates or documents representing the acquisition of precious metals or precious objects, philatelic value stamps or pieces of numismatic value, by natural persons or by natural persons, shall be communicated to the tax authorities. legal entities that are used to promote investment in such securities.

6. The provisions of paragraphs 2 and 3 above shall be applicable in relation to the obligation to retain or to enter into account to be established in a regulated manner with respect to the transmission of financial assets for explicit performance.

Article 142. Obligations of taxable persons in relation to the tax domicile.

1. Taxable persons shall be required to bring to the attention of the State Administration of Tax Administration the change of their tax domicile.

2. The State Tax Administration Agency may promote the change of the tax domicile, after hearing the person concerned, in the form that is regulated.

CHAPTER VI

Powers of Administration to determine the tax base

Article 143. Powers of the Administration to determine the tax base.

For the purposes of determining the tax base, the tax administration shall apply the rules referred to in Article 10.3 of this Law.

TITLE IX

Jurisdictional Order

Article 144. Competent jurisdiction.

The judicial-administrative jurisdiction, prior to exhaustion of the economic-administrative path, will be the only competent authority to settle disputes in fact and law that arise between the tax administration and the taxable persons in relation to any of the matters referred to in this law.

Additional disposition first. Restrictions on the double taxation of dividends.

They shall not be entitled to the deduction provided for in Article 30 of this Act:

(a) The profits distributed from the reserves constituted with the results corresponding to the increases in the assets referred to in Article 3 (1) of Law 15/1992, of 5 June, on measures urgent for the progressive adaptation of the oil sector to the Community framework.

(b) dividends distributed from profits corresponding to subsidised income in accordance with the provisions of Article 2 of Law 22/1993 of 29 December 1993 on the adoption of tax measures, of reform of the legal system of public service and of protection by unemployment, and of income from companies benefiting from the allowance provided for in Article 19 of the Law of 15 November 1993, and in the additional provision (a) of Law No 19/1994 of 6 July 1994 or of companies to which the exemption provided for in the Forales 5/1993, of 24 June, of Vizcaya, 11/1993, of 26 June, of Guipuzcoa, and 18/1993, of 5 July, of Alava.

In case of distribution of reserves, the designation contained in the social agreement will be considered, the first amounts paid to those reserves being applied.

Additional provision second. References to Law No 29/1991 of 16 December 1991 adapting certain concepts of taxation to the directives and regulations of the European Communities contained in various provisions. Regime of the Tax on the Increase of the Value of Urban Nature's Land in certain operations.

1. The references provided for in Article 1 (b) of Law No 37/1992 of 28 December 1992 on value added tax to the operations of Article 1 and to the definition of a branch of activity in Article 2 (4) of Law No 29/1991 of 16 May 1991, (a) December, in accordance with the provisions of the Directive and Regulations of the European Communities, provided that the operations are entitled to the tax system governed by Title I of that Law, special arrangements for mergers, divisions, contributions from branches of activity and exchange of defined securities in Article 83 of this Law.

2. The references to the definitions of merger and division in Article 2 (1), (2) and (3) of Law No 29/1991 of 16 December 1991, paragraphs 1, 2 and 3 of the Law on the Tax on Proprietary Transmissions and Documented Legal Acts September, subject to certain concepts of taxation, to the directives and regulations of the European Communities, shall be construed as references to Article 83 (1), (2), (3) and (5) and Article 94 of this Law and references to the special arrangements Title I of Law No 29/1991 of 16 December 1991 shall be construed as references to Chapter VIII of Title VII of this law.

3. The Tax on the Increase in the Value of Urban Nature's Land shall not be payable on the occasion of transfers of land of an urban nature resulting from operations to which the special rules laid down in Chapter 1 apply. VIII of Title VII of this Law, with the exception of those relating to land which is provided under the provisions of Article 94 of this Law when they are not integrated into an activity branch.

In the subsequent transmission of the above grounds it is understood that the number of years along which the increase in value has been revealed has not been interrupted due to the transmission resulting from the operations provided for in Chapter VIII of Title VII.

It will not be applicable to the provisions of Article 9.2 of Law 39/1988 of 28 December, regulating local farms.

Additional provision third. Grants from the Community's agricultural and fisheries policy and public aid.

1. Positive income which is evidenced as a result of:

shall not be integrated into the tax base of the Corporate Tax.

(a) The perception of the following Community agricultural policy aid:

1. The definitive abandonment of vineyard cultivation.

2. Prima at the start of apple plantations.

3. Prima at the start of plataneras.

4. The definitive abandonment of milk production.

5. The definitive abandonment of the cultivation of pears, peaches and nectarines.

6. Grubbing of pears, peaches and nectarines.

(b) The perception of the following Community fisheries policy aid: for the permanent cessation of the fishing activity of a vessel and for its transmission for the formation of joint ventures in third countries, as for the definitive abandonment of the fishing activity.

(c) The collection of public aid to repair the destruction, fire, flood or collapse of property assets affected by the exercise of economic activities.

(d) The perception of aid to the abandonment of road transport activity satisfied by the Ministry of Public Works to carriers meeting the requirements laid down in the regulatory framework for the granting of such aid.

e) The perception of public compensation, due to the compulsory slaughter of the livestock population, in the framework of actions aimed at the eradication of epidemics or diseases.

This provision will only affect animals intended for reproduction.

2. In order to calculate the income which will not be included in the tax base, account shall be taken of both the amount of aid received and the property losses which, where appropriate, are incurred in the elements affected by the activities. Where the amount of such aid is less than that of the losses incurred in the abovementioned elements, the negative difference may be incorporated in the tax base. Where there are no losses, only the amount of the aid shall be excluded.

Additional provision fourth. Tax regime for the transmissions of assets made in compliance with provisions with the law and the rules of defence of competition.

The transmissions of the assets referred to in Article 42 of this Law that are carried out in compliance with obligations established by provisions with the rank of law, published as of 1 January 2002, or by Agreements between the European Commission or the Council of Ministers adopted from the same date, in application of the rules of defence of competition in business concentration processes, will have the following treatment in the tax on Companies:

(a) The positive income that is obtained shall not be integrated into the tax base, if the amount obtained in the transmission is reinvested under the conditions set out in Article 42 of this Act.

(b) This positive income shall be integrated, without any reduction or exemption, in the taxable amount of the period in which it is transmitted, or for any other reason, on the balance sheet, the goods and the right to which the reinvestment.

(c) The assets in which the reinvestment materializes shall be valued, for the exclusive purposes of calculating the positive income, for the same value as the goods and rights transmitted. In the case of partial reinvestment, this value shall be increased by the amount of the income in the tax base.

(d) The taxable person may submit consultations on the interpretation and application of this provision, the answer of which shall be binding on the tax administration, as provided for in the Articles 88 and 89 of Law 58/2003, of 17 December, General Tax.

Additional provision fifth. Tax incentives for the renewal of the merchant fleet.

1. Vessels, vessels and naval vessels, which meet the following requirements, may be rapidly amortised:

(a) In the case of new vessels, vessels or naval vessels which are made available to the acquirer between 1 January 1999 and 31 December 2003 or which have been commissioned under a contract (a) the construction of a building within that period, provided that it is made available to the acquirer before 31 December 2006, or in the case of used vessels acquired after 1 January 1999 which have been the subject of improvements, the amount of which is greater than 25% of their purchase value and which are made before 31 December December 2003.

(b) the ship, vessel or ship is to be entered in the first, second or fifth lists of Article 4.1 of Royal Decree 1027/1989 of 28 July on the flag, registration and registration of ships.

(c) The acquiring taxable person shall exploit the vessel, vessel or ship by means of his or her own activity, or by leasing it to the bare hull, provided that, in the latter case, the leasing entity is a Spanish or European grouping of economic interest and the following requirements are met:

1. º that the tenant is a natural or legal person who has as usual activity the exploitation of ships, vessels or naval artifacts and that affects the element to such activity.

2. º That at least 75 percent of the tax advantage obtained is transferred by the lessor to the user.

For these purposes, the tax advantage will be assessed in the update, at the rate determined by the Ministry of Finance, of the differences in tax revenues that would occur with and without the application of this scheme.

3. The partners of the leasing entity shall maintain participation in the leasing entity for at least two thirds of the term of the lease.

4. º that the purchase price of the ship, vessel or naval device, the interest rate of the financing used and the amount of the rent, are the normal market between independent parties.

5. No that there is no linkage between the asset seller and the tenant of the asset.

6. º That at least 20 percent of the resources needed to finance the acquisition of the ship, vessel or naval device comes from the pool's own funds.

d) To be requested and obtain the concession of the benefit of the Ministry of Finance prior to the construction or improvement of the element. For the granting of the benefit, the Ministry of Finance shall take account, from the point of view of the general interest, that the project has a significant economic and social interest, in particular in the field of employment. To this end, the prior report of the Ministries of Science and Technology and of Promotion, in the case of new or used elements, shall be necessary; the application must be resolved within the maximum period of 3 months, after which the Understood to be rejected.

2. Depreciation shall be performed in accordance with the following rules:

(a) The annual tax deductible deductible shall be as limited as 35 percent of the purchase price of the vessel or the value of the improvement.

(b) Depreciation may be made prior to the entry of the vessel, vessel or ship, under operating conditions or at the start of the improvement, with the limit of the amounts paid.

(c) Deduction of amounts exceeding the amount of effective depreciation shall not be conditional upon the accounting imputation to the profit and loss account. These amounts will increase the tax base on the occasion of the depreciation or transmission of the item enjoyed by the item.

3. Vessels, vessels or naval vessels acquired under the leasing arrangements may, alternatively, benefit from the special depreciation provided for in this rule or to the provisions of Article 115 of this Act.

4. If the requirements are subsequently met, the taxable person shall lose the benefit of the accelerated depreciation and shall enter the amount of the fees for the financial years during which he has enjoyed this tax incentive, together with the penalties, surcharges and interest for late payment.

Additional provision sixth. Impact of the reserve for investments in the Canary Islands in the calculation of the instalments.

For the purposes of Article 45 (3) of this Law, the amount of the reserve for investments in the Canary Islands, as provided for in Article 27 of Law 19/1994 of 6 July 1994, may be reduced from the taxable amount. Amendment of the Canary Islands ' Economic and Fiscal Regime, which is expected to be carried out, in proportion to each of the three, nine or 11 first months of the tax period and with the ceiling of 90% of the tax base of each of them.

If the amount of the reserve that is actually provided is less than 20% of the amount of the reduction in the tax base made to calculate the amount of each of the instalments raised per year, the institution shall be required to regularise such payments on the basis of the difference between the initial forecast and the actual allocation, without prejudice to the liquidation of interest and surcharges which, where appropriate, result.

Additional provision seventh. Depreciation coefficients applicable to the acquisitions of assets made between 1 January 2003 and 31 December 2004.

For acquisitions of new assets made between 1 January 2003 and 31 December 2004, the maximum linear amortisation ratios set out in the official tables of depreciation coefficients are They will be replaced, in all mentions to them, by the result of multiplying those by 1.1. The new coefficient shall be applicable during the lifetime of the new assets acquired in the period referred to above.

First transient disposition. Regularisation of extra-accounting adjustments.

The non-accounting, positive and negative adjustments, practiced to determine the tax bases of the Company Tax corresponding to tax periods initiated prior to the entry into force of the Law 43/1995, of 27 December, shall be taken into account for the purposes of determining the taxable bases corresponding to the tax periods in which this law applies, in accordance with the provisions laid down in the regulated.

In no case shall it be permissible for the same income not to be taken into consideration or twice for the purposes of determining the tax base for the Company Tax.

Second transient disposition. Tax regime for the investigation and exploitation of hydrocarbons and for the promotion of mining.

1. The provisions laid down in this law for the activities of research and exploitation of hydrocarbons shall apply to entities with research permits and operating concessions which continue to be governed by Law 21/1974, of 27 June, a legal regime for the investigation and exploitation of hydrocarbons.

2. The assets which, at the entry into force of Law 43/1995 of 27 December 1995, were being depreciated in accordance with the maximum depreciation coefficients set out in Article 47 (B) of Royal Decree No 2362/1976 of 30 July 1976, The Regulation of 27 June 1974 on the Law on the Investigation and Exploitation of Hydrocarbons may be amortized by applying the aforementioned coefficients, and must be fully amortized within the maximum period of 20 years. from that date of entry into force.

3. The negative taxable bases which were pending compensation under the special scheme of Chapter X of Title VIII of Law 43/1995 of 27 December 1995 in the first tax period started on 1 January 1999 will be compensated in the form set out in Article 106 of this Act.

4. Taxable persons who, before 31 December 2000, have the right to apply the "Tax Regime for the Investigation and Exploitation of Hydrocarbons" set out in Chapter X of Title VIII of Law 43/1995 of 27 December 1995, may choose to continue to apply such a scheme, in its wording in force on 31 December 2002, during the tax periods ending until 31 December 2005.

Outstanding investment balances, to the date of the start of the first tax period beginning on or after 1 January 2003, or 1 January 2006, to have opted for the application of the scheme in accordance with the provisions of the Previous paragraph, of the envelopes to the exhaustion factor made under the Law 21/1974, of 27 June, of a legal regime for the exploration, investigation and exploitation of hydrocarbons, and of Chapter X of Title VIII of the Law 43/1995, of December 27, shall apply in the form set out in Article 103 of this Law.

The period referred to in Article 103 of this Law shall not apply where the quantities are intended for the abandonment of fields or the dismantling of offshore platforms provided that they correspond to existing holdings of the The entry into force of Law 53/2002 of 30 December.

5. The outstanding amounts of investment of the envelopes to the exhaustion factor made under Law 6/1977, of 4 January, of the promotion of mining, prior to the entry into force of Law 43/1995, of 27 December, must be invested under the conditions and with the requirements laid down in its law, for the purpose of consolidating the deduction on its day.

Transitional provision third. Reinvestment of extraordinary benefits.

1. The increases in assets charged in tax periods governed by Law 61/1978 of 27 December of the Tax on Societies, which are covered by the reinvestment exemption provided for in Article 15.8 thereof, shall be governed by the provisions laid down therein. even if the reinvestment takes place after the entry into force of Law 43/1995 of 27 December of the Company Tax.

2. The income received from the reinvestment exemption provided for in Article 127 of Law 43/1995 of 27 December 1995, according to its original wording, shall be governed by that established, even if the reinvestment takes place in tax periods. started from 1 January 1999.

3. The income received from the reinvestment of extraordinary profits provided for in Article 21 of Law 43/1995 of 27 December 1995, in accordance with its wording until 1 January 2002, shall be governed by the provisions laid down in Article 21 of Law No 43/1995. development, even if reinvestment and other requirements occur during tax periods started on or after 1 January 2002.

4. By way of derogation from the preceding paragraph, if the reinvestment is effected in a tax period initiated from 1 January 2002, the taxable person may apply the deduction referred to in Article 42 of this Law, provided that the the entire deferred income is integrated into the tax base of that tax period.

5. The taxable persons who, in the first tax period starting from 1 January 2002, had outstanding income to be included in the tax base as a result of the reinvestment of extraordinary profits provided for in the Article 21 of Law 43/1995 of 27 December 1995, in accordance with its wording until 1 January 2002, may include in the taxable amount of the first declaration by this tax which is submitted as from 1 January 2002, in whole or in part, income, also applying the deduction provided for in Article 42 of this Act for such integrated income the tax base.

Transitional disposition fourth. Tax benefits of reconversion and reindustrialisation.

The taxable persons affected by the Reconversion Royal Decrees will enjoy the tax benefits established by Law 27/1984 of 26 July, of reconversion and reindustrialisation, in the terms that are previews.

Transient disposition fifth. Tax benefits of Law 12/1988, of 25 May, Law 5/1990 of 29 June, and Law 30/1990 of 27 December.

The entities referred to in Articles 2 and 16 and the additional provision of Law 12/1988, of 25 May, of tax benefits relating to the Universal Exhibition of Seville 1992 and to the Memorial Acts of the V Centennial of the Discovery of America and the Olympic Games of Barcelona 1992, as well as those referred to in the fifth additional provision of Law 5/1990, of 29 June, on measures in budgetary, financial and tax matters, and the fourth additional provision of Law 30/1990 of 27 December 1990 on relative tax benefits a Madrid European Capital of Culture 1992, shall retain the tax regime laid down in those rules for the period necessary for its complete liquidation.

The entity referred to in Article 2 of Law 30/1990, of 27 December 1990, shall retain the tax regime established in it for the period necessary for its liquidation in accordance with the provisions of its provision. final second.

Transitional disposition sixth. Leasing.

They shall be governed until their full compliance with the rules laid down in the seventh additional provision of Law 26/1988 of 29 July 1988 on the discipline and intervention of credit institutions, lease agreements (a) financial aid concluded prior to the entry into force of Law 43/1995 of 27 December on goods for which the delivery of the goods to the user had also been carried out prior to its entry into force, or on immovable property whose the delivery takes place within two years after that date of entry into force.

Transitional disposition seventh. Trade funds, trade marks, transfer rights and other intangible assets acquired prior to the entry into force of Law 43/1995 of 27 December of the Company Tax. Effects of the difference between the acquisition price of the holding and its theoretical value in the transactions carried out by the special scheme of mergers, divisions, asset contributions and exchange of securities.

1. Article 11 (4) and (5) of this Law shall apply in respect of the value of the acquisition of trade funds, trade marks, transfer rights and other items of intangible fixed assets acquired prior to entry. in force of Law 43/1995 of 27 December 1995, which would not have been deducted for the purposes of determining the tax base, even if they were contachably depreciated.

2. The second paragraph of Article 89.3 of this Law also applies to the operations covered by Article 10 of Law No 29/1991 of 16 December 1991 on the adequacy of certain concepts of taxation to directives and regulations. regulations of the European Communities, even if the depreciation had been incurred for accounting purposes.

3. The valuation resulting from the imputation to the assets of the fixed assets corresponding to the difference between the purchase price of the holding and its theoretical value, as referred to in Article 89 (3) of this Law, shall have effect (a) tax for those transactions which have been registered as from 1 January 2002.

The difference between the acquisition price of the holding and its theoretical value as referred to in Article 89 (3) of this law that is not attributable to the acquired goods and rights, derived from transactions registered before 1 January 2002 which were deductible according to the wording of Article 103 of Law 43/1995 of 27 December, then in force, they will continue to be deductible with the maximum annual limit of twenty-one part of their amount.

4. In no case shall the amortisation of the trade funds arising in operations covered by Law 76/1980 of 26 December on the Tax Regime of Companies ' Mergers be considered as deductible expenditure, except that the amount of the (a) trade funds have been integrated into the tax base and the corresponding quota would not have been subsidised.

Transient disposition octave. Deductions to be applied in Corporate Tax.

1. The amounts to be deducted in respect of the tax benefits provided for in Article 26 of Law 61/1978 of 27 December 1978 on Corporate Tax, in Law 12/1988 of 25 May 1990, Law No 30/1990 of 27 June 1990, In December, in Law 31/1992 of 26 November 1992, and in the seventh provision of Law 39/1992 of 29 December 1992, they will be applied in the settlements corresponding to the tax periods starting from the entry into force of the this law, under the conditions and requirements laid down in those laws.

If the taxable person, in accordance with the provisions of Article 218.3 of Royal Decree 2631/1982 of 15 October 1982, approving the Companies Tax Regulation, has chosen to apply the deduction by investments in new tangible fixed assets in the tax periods in which the payments are made, the deduction will be applied in the settlements of the tax periods starting from the entry into force of Law 43/1995, of 27 of December, in which the said payments are made, under the conditions and conditions laid down in that rule.

The deductions referred to in the preceding paragraphs shall be deducted in compliance with the limit on the liquid quota provided for in the relevant laws and in the corresponding General Budget Laws of the State.

For these purposes, the resulting liquid quota is the result of minoring the full quota in the deductions and allowances provided for in Chapters II and III of Title VI of this Law.

Deductions from different modalities or tax periods of Article 26 of Law 61/1978 of 27 December, except for the creation of employment, may not exceed a joint limit of 35 percent. percent of the liquid quota.

The deductions referred to in the preceding paragraphs shall be applied once the deductions and allowances set out in Chapters II and III of Title VI of this Law are made and then deductions laid down in Chapter IV of Title VI, the limit of which shall be calculated independently of the limit laid down in the preceding paragraph.

2. The deductions referred to in Articles 29a and 30a of Law 43/1995 of 27 December 1995, pending the completion of the current tax period on the entry into force of the Royal Decree Law 3/2000 of 23 June, by If urgent fiscal measures are adopted to encourage the saving of fami liar and small and medium-sized enterprises, they shall be deducted in the tax periods completed after that date under the conditions and conditions laid down in those provisions. items.

3. The deductions provided for in Chapter IV of Title VI of Law 43/1995 of 27 December 1995, which are to be applied at the beginning of the first tax period starting from 25 June 2000, may be offset by the deadline and with the the requirements laid down in the wording of Article 37 of that law in force in that tax period, from the end of the tax period in which such deductions were established.

The deductions provided for in Chapter IV of Title VI of Law 43/1995 of 27 December 1995, to be applied at the beginning of the first tax period beginning on 1 January 2002, may be offset within the period and with the requirements set out in Article 44 of this Act, counting from the end of the tax period in which such deductions were credited.

transient disposition ninth. Negative taxable bases to be offset in the Company Tax.

The negative tax bases to be cleared at the beginning of the first tax period beginning on 1 January 2002 may be offset within the period and with the conditions laid down in paragraph 1. Article 25 of this Law, counted from the end of the tax period in which these negative taxable bases were determined.

Transient disposition tenth. Balances of the provision for insolvencies covered by Article 82 of Royal Decree 2631/1982 of 15 October 1982.

The taxable persons who, at the entry into force of Law 43/1995, of 27 December, had constituted a fund for the provision of insolvencies by means of the system governed by Article 82 (6) of Royal Decree 2631/1982, On 15 October, the Regulation on Societies shall apply its balance to cover the appropriations for doubtful recovery existing at that date and the excess, if any, to those which are subsequently produced up to the total extinction. In the meantime, the appropriations for the coverage of the said appropriations shall not be deductible.

Transient disposition eleventh. Transitional arrangements for financial operations benefits.

The concessionary companies of toll motorways which have recognised profits in this tax on 1 January 1979 for financing and refinancing operations in the light of their specific legislation and of the In the case of the third paragraph of Article 3 (2) of Law 61/1978 of 27 December 1978 and its implementing rules, it shall retain that right acquired in its present terms. Also, the taxable persons who at the date of entry into force of Law 43/1995, of December 27, enjoyed the bonus to which they refer: article 25.c) of Law 61/1978, of December 27; article 1 of the Royal Decree Law 5/1980, May 29 May, on the basis of the interest to be provided by local authorities, autonomous communities and the State, on the basis of certain loans or borrowings, on the interest to be provided by local authorities, Articles 6.5 and 20 of Law 12/1988 of 25 May 1988 on tax benefits relating to the Universal Exposition Seville 1992, to the events commemorating the 5th anniversary of the discovery of America and the Olympic Games of Barcelona 1992 and Article 6.5.ode of Law 30/1990, of 27 December, of tax rates relating to Madrid European Capital of the Culture 1992, under resolution agreed by the Ministry of Economy and Finance, will continue to apply it in the terms set out in the respective rules.

Transient Disposition twelfth. Tax value of the units of collective investment institutions.

For the purposes of calculating the excess of the liquidative value referred to in Article 60 of this Law, the value of the acquisition shall be taken as the value of the acquisition on the first day of the first tax period to which it has been application of Law 43/1995 of 27 December 1995 in respect of the shares and shares held by the taxable person. The difference between that value and the effective acquisition value shall not be taken as the acquisition value for the purposes of determining the income derived from the transmission or redemption of the shares or units.

Dividends and participations in profits distributed by the collective investment institutions that derive from profits made prior to the entry into force of Law 43/1995 of 27 December, will be integrated in the taxable base of the members or members thereof. For these purposes, the first distributed reserves shall be understood to have been endowed with the first benefits gained.

transient disposition thirteenth. Update accounts.

1. As from the entry into force of Law 43/1995, of 27 December, the balances of the accounts "Update Budget Law for 1979", "Update on foreign assets, Budget Law for 1980" and "Update Budget Law" For 1983 ", they shall be transferred to the legal reserve and the remainder, if any, to reserves of free disposal.

2. The rules on the depreciation of the updated items shall continue to apply until the end of their lifetime.

Transitional disposition fourteenth. Transitional arrangements for the intensification of competition.

The provision in the fourth additional provision of this law will be applicable to the transfers of assets which, having been effected under the provisions of Royal Decree Law 6/2000 of 23 June, of urgent measures of Strengthening of competition in markets for goods and services, agreement of the Council of Ministers in application of the rules of defence of competition or processes of business concentration or decisions of the European Union of the same subject, have been closed to the entry into force of Law 24/2001 of 27 December, or with the same protection shall be carried out from 1 January 2002.

15th transient disposition. Transparent companies.

1. The positive tax bases of transparent companies corresponding to the tax periods in which the scheme has been applied, as well as the other concepts which are not yet to be imputed from those tax periods, are shall be charged in accordance with the regulatory rules of the tax transparency regime in force in such periods.

2. In the transfer of shares and shares in the capital of companies which have been considered transparent in previous tax periods, the acquisition value shall be increased by the amount of the social benefits obtained. in those periods which, without effective distribution, would have been charged to the partners as income from their shares or units in the period of time between their acquisition and transfer.

3. Dividends and participations in profits of those companies which come from tax periods during which the company which distributes them is subject to the tax transparency regime, will not be taxed in the Income Tax. of the Physical Persons and the Tax on Societies. The amount of these dividends or shares in profits shall not be included in the value of the shares or shares of the partners to whom they were charged.

Dealing with the partners who acquired the shares or units after the imputation, the acquisition value of those shares shall be reduced.

4. They shall not be subject to withholding or income from dividends or shares in profits as referred to in paragraph 3 above.

5. The negative tax bases which are to be compensated by the transparent companies which are taxed by the special arrangements for the company's assets may be compensated, within the time limit of the transparent company, and in the the conditions laid down in Article 23 of Law 43/1995 of 27 December 1995, with the general or special part of the positive tax base of the equity company, at the option of the latter.

6. Deductions to avoid double taxation laid down in Chapter II of Title VI of Law 43/1995 of 27 December 1995, pending deduction of quota insufficiency, may be deducted within the time limits laid down in that legislation.

Transient disposition sixteenth. Dissolution and liquidation of transparent companies.

1. They may agree to be wound up and wound up, subject to the tax arrangements provided for in this provision, to the companies in which the following circumstances apply:

(a) That they would have had the consideration of transparent companies, in accordance with Article 75 (1) of Law 43/1995 of 27 December 1995, in the last tax period ended before 1 January 2003, or meet the requirements for such consideration to this date and, in both cases, keep it until the date on which they agree to be dissolved.

b) That during the year 2003 they will validly adopt the settlement agreement with liquidation and carry out after the agreement, within six months after that period, all necessary legal acts or business, as the business rules, until the registration of the company in liquidation.

2. The dissolution with liquidation of such companies shall have the following tax regime:

(a) Exemption from the Tax on Proprietary Transmissions and Legal Acts Documented, Concept "Societarian Operations", taxable "dissolution of companies", Article 19.1.1. of the recast of the tax, approved by Royal Legislative Decree 1/1993 of 24 September.

(b) The Tax on the Increase in the Value of the Land of Urban Nature shall not be payable on the occasion of the awards to the members of buildings of an urban nature. In the subsequent transmission of the aforementioned buildings, it will be understood that these were acquired on the date that they were acquired by the company that is extinct.

(c) For the purposes of the Company Tax which is dissolved, no income shall be earned on the occasion of the attribution of property or rights to the members, natural or legal persons, residing in Spanish territory.

(d) For the purposes of the Income Tax of the Physical Persons, the Corporate Tax or the Income Tax of non-residents of the society's partners that dissolves:

1. The acquisition value and, where applicable, the ownership of the shares or shares in the capital of the company which is dissolved shall be increased by the amount of the debts awarded and shall be reduced in the amount of the claims and money or sign representing it.

2. º If the result of the operations described in the preceding paragraph is negative, the result shall be deemed to be income or property gain, depending on whether the partner is a legal or natural person, respectively.

In this case, each of the remaining asset items awarded other than the credits, money, or sign representing it, will be considered to have a zero acquisition value.

3. º If the result of the operations described in paragraph 1. above is zero or positive, no income or loss or property gain shall be deemed to exist.

When that result is zero, each of the remaining asset items awarded other than the credits, money, or sign that represents it, will have a zero acquisition value.

If the result is positive, the acquisition value of each of the remaining assets awarded other than the credits, money or sign representing it, will be the result of distributing the positive result. between them on the basis of the net book value resulting from the final settlement balance of the extinguishing company.

4. The elements awarded to the partner, other than the credits, money or sign representing it, shall be considered acquired by the member on the date of its acquisition by the company, without, in the calculation of the amount of the profits The provisions of the transitional provision of the recast text of the Income Tax Law of the Physical Persons are applicable.

3. During the tax periods ending until the end of the dissolution process with liquidation within the time limits referred to in paragraph 1 (b) of this transitional provision, it shall continue to apply both to the companies transparent as for its partners, the rules in force at 31 December 2002.

In the tax periods that are concluded after the end of the term, the regime of the property companies or the general scheme, as appropriate, shall apply.

transient disposition seventeenth. Transitional deduction scheme to avoid double taxation of dividends in corporate tax.

In the case of dividends and participations in profits from securities representative of capital or equity, acquired before the entry into force of Royal Decree Law 8/1996 of 7 June, they will not be application of the restrictions on deduction to avoid the double taxation of dividends contained in Article 30 (4) of this Law.

In this case, the restrictions contained in Article 28 of Law 43/1995, of 27 December, in its original wording, prior to the entry into force of Royal Decree Law 8/1996 of 7 June, will apply.

18th transient disposition. Application of Article 115 (11) of this Act to assets whose construction period has been completed before 31 December 2002.

The temporary time determined by the Ministry of Finance, as referred to in Article 115 (11) of the Law, may be matched with that of the putting into operation, in the case of assets whose period the construction has been completed before 31 December 2002 and the application to the Ministry of Finance has been submitted before that date.

Final disposition first. Entities covered by Law 49/2002, of 23 December, of the tax regime of non-profit entities and of tax incentives for patronage.

The entities that meet the characteristics and meet the requirements of Title II of Law 49/2002 of 23 December of the tax regime of non-profit entities and of tax incentives for patronage, they will have the tax regime in place.

Final disposition second. Entities covered by Law 20/1990 of 19 December on the Tax Regime of Cooperatives.

1. Cooperatives will be taxed in accordance with the provisions of Law 20/1990 of 19 December on the Tax Regime of Cooperatives.

2. The groups of cooperative societies may be taxed on a consolidated basis in accordance with the provisions of Royal Decree 1345/1992 of 6 November 1992 laying down rules for the adaptation of the provisions governing the taxation on the consolidated profit to the groups of cooperative societies.

Final disposition third. Ratings to the State General Budget Law.

1. The General Budget Law of the State may:

a) Modify the lien types.

b) Modify the quantitative limits and fixed percentages.

c) Modify the exemptions.

(d) to introduce and amend the precise rules in order to comply with the obligations arising from the Treaty on European Union and from the Treaty of European Union.

e) Modify the procedural and management aspects of the tribute.

f) Modify the submission deadlines for declarations.

g) Set the coefficients to apply the provisions of article 15.10 of this law.

2. The General Budget Law of the State shall establish the relevant tax incentives in relation to this tax, where appropriate for the implementation of economic policy. In particular, the investment will be stimulated by means of deductions in the full quota based on the acquisition of new material assets.

Final disposition fourth. Regulatory enablement.

The Government is empowered to dictate how many provisions are necessary for the development and implementation of this law.