JOHN CARLOS I

KING OF SPAIN

To all who present it and understand it.

Sabed: That the General Courts have approved and I come to sanction the following Law.

EXPLANATORY STATEMENT

I

This Law contains a series of tax measures to support businesses and promote savings and investment. In particular, they affect the taxation of small and medium-sized enterprises, the tax treatment of pension and life insurance schemes, the taxation of property gains and losses, and the taxation of business of our companies.

These promotion measures are necessary in the current economic situation, to ensure the stable growth of the Spanish economy and to avoid the emergence of inflationary pressures.

The achievement of this objective made it essential to implement these measures immediately, which was carried out by Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures for the stimulation of family savings and small and medium-sized enterprises. This Law has its immediate precedent in that Royal Decree-Law.

II

This Law shows a strong commitment to support small and medium-sized enterprises and innovation and business internationalization initiatives, as a way to improve their competitiveness and therefore, ensuring their survival in a rapidly changing and globalised environment.

As far as support measures are concerned for small and medium-sized enterprises, which are the real backbone of our economy and which are so important in terms of growth and innovation, it expands significantly the scope of the special corporate tax regime, which will enable a large number of companies to benefit from the tax incentives established there, and the benefit reinvestment scheme is improved business.

On the other hand, given the importance of new technologies and the willingness to support the innovative and entrepreneurial spirit of our companies, a tax incentive is established for those actions that have the aim to improve their access and presence on the Internet, as well as the development of electronic commerce or the improvement of their processes in general through the incorporation of information and communications technologies.

Similarly, through new tax incentives in Corporate Tax or by improving existing ones, staff training in the use of new technologies, as well as investments in innovation, is encouraged. technology of companies. In the same line of support for new businesses, entrepreneurs and innovators, improvements in the risk capital regime must be included as a formula for financing initiatives.

Finally, support for the scientific research, development and technological innovation activities carried out by our companies is manifested in the suppression of the limitations on the right to deduct the tax on the Value added as a result of the collection of grants for the performance of such activities.

III

With regard to the tax treatment of contributions to pension schemes, it should be remembered that the promotion of supplementary social welfare systems was one of the main aspects raised in the so-called Pact. de Toledo. In this respect, this Law introduces improvements in the tax regime of pension schemes and, consequently, of social welfare mutual societies, as follows.

First, an increase in the general limits of the reduction in the tax base by contributions to pension plans and social welfare insurance schemes, as well as those applicable in the case of unit-holders, is carried out. older age and people with disabilities. In particular, the general limits are set at 1,200,000 pesetas (7,212,15 euros) and 25 per 100 of net income from work and economic activities, which implies an increase of the absolute limit by 100,000 pesetas (601.01 euros) and on 5 percentage points. In the case of older people, the maximum contribution limit is raised by 300 000 pesetas (1,803,04 euros) and by 20 percentage points, respectively, in 2,500,000 pesetas (15.025.04 euros) and 40 per 100. Finally, in the case of people with disabilities, the absolute limit is raised by 300,000 pesetas (1,803.04 euros), being located at 2,500,000 pesetas (15,025.30 euros).

Secondly, there is an extension of the tax regime for pension schemes to those spouses who do not work outside the family household or who, in doing so, earn income of less than 1,200,000 pesetas (7,212,15 euros). This measure implies a boost to family savings and responds to an existing social demand. It should be noted that the reduction limits for pension schemes are applied on the individual income of each taxpayer, which prevents the reduction of pension schemes to the pension schemes. spouses who do not work outside the family home, despite the fact that, on many occasions, they contribute, through domestic work, to obtaining returns from the spouse. With the amendment incorporated, it is possible that the contributions made to the pension plans of the spouses who do not obtain income or whose income from the work and economic activities are less than 1,200,000 Pesetas (7,212,15 euros) may be subject to reduction in the taxable amount of the other spouse, with the maximum limit of 300,000 pesetas (1,803,04 euros) per year.

In the third place, a measure is incorporated that enables for the realization of contributions to the mutual social forecast of professional athletes with the maximum limit of financial contribution and tax reduction of 2,500,000 pesetas (EUR 15,025,30) per year, without application of the percentage limit on income from work or economic activities.

In a manner consistent with the improvements introduced in the tax system of pension schemes, the taxation of benefits arising from life insurance is improved by increasing the reducing coefficients applicable to the pension scheme. determination of the corresponding net performance.

IV

With regard to the treatment in the Income Tax of the Physical Persons of the profits and property losses, first the inclusion in the special part of the tax base of the tax of those arising from the transfer of assets acquired more than one year in advance, which means a reduction of the two-year period in force before.

The main purpose of this measure is to prevent the making of investment decisions by the citizen from being drastically conditioned by the influence of the deadline provided for in the current legislation. Indeed, the maintenance of investments for more than two years in order to achieve the expected tax on this type of income can be too long-term, and therefore its reduction contributes to greater efficiency in the investment decisions by individuals.

At the same time, in line with the tax rebate carried out by Law 40/1998, of December 9, of the Tax on the Income of Physical Persons and other Tax Rules, the tax rate applicable to these taxes is reduced. income from 20 to 18 per 100, thus equating to the minimum rate at which the general part of the tax base is taxed. The basis for this measure is twofold: on the one hand, there is no doubt that the alternative of saving to consumption is more attractive and, on the other hand, it is ensured that no taxpayer is able to see the income that is included in the (a) special tax base at a higher charge than those of the general part of the tax base.

In line with the new tax rate, the withholding rate applicable to income earned as a result of transfers or repayments of shares or units in investment institutions is reduced to 18 per 100. collective.

It is also worth noting the following measures relating to savings and investment: the regime is established in the Income Tax of the Physical Persons and in the Corporate Tax on the loan of securities, with the the purpose of facilitating the performance of these transactions on the Spanish financial markets; the taxation of the income tax on the income of natural persons derived from certain financial assets is eliminated when (a) to show on the occasion of the death of the taxpayer; it is regulated in a homogeneous in the Taxes on the Income of the Physical Persons, on Societies and on the Income of Non-Residents the treatment of the operations of reduction of capital with return of contributions to the partners and return of the premium of emission.

V

With the aim of supporting the initiatives of internationalization of our companies, the regime is modified to avoid the double international economic imposition by the business activities developed abroad to through subsidiaries or through permanent establishments located there. The application of the exemption method for these rents favours the internationalisation of Spanish companies by improving their competitive position in the international arena. However, the modification of the scheme to avoid double taxation is accompanied by anti-abuse measures which seek to prevent the relocation of business activities.

Also, a new tax incentive is established in the Corporate Tax that complements the measures aimed at encouraging the implementation of Spanish companies abroad, consisting of the tax deferral in Spain. those cases in which investments are made abroad by taking equity shares in the capital of non-resident companies which carry out business activities. In particular, the taxable person is allowed to reduce his taxable amount in the amount of the investment made, with the integration into the tax base of the subsequent tax periods of the amount deducted.

Finally, in order to facilitate the mobility of Spanish workers abroad and to simplify the tax obligations of resident and non-resident taxpayers in Spanish territory, they are adopted measures relating to the treatment of income obtained by the carrying out of work abroad, and to the payment of personal taxes in the tax periods in which a posting occurs at or from abroad.

VI

Finally, other measures of great economic and social importance are also dealt with in this Law.

First of all, with the aim of completing the reform of the Income Tax of the Physical Persons as regards the treatment of habitual housing and, taking into account the complementary nature of the The Tax on the Heritage, the exemption is established in this last tax of the habitual housing of the taxpayer, at least in so far as its tax value does not exceed 25,000,000 pesetas (150,253,03 euros).

Second, two lines of financial support are created for technology-based companies: the first, by means of loans for the financing of the taking of equity in the capital of those by financial institutions; the second, through participative loans to support business projects of such enterprises.

TITLE I

Measures relating to small and medium-sized enterprises and innovative enterprises

Article 1. Scope of application of the special scheme for companies with a reduced size in corporate tax.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and Article 122 of Law 43/1995 of 27 December of the Corporate Tax is worded as follows:

" Article 122. Scope: Business figure.

1. The tax incentives provided for in this Chapter shall apply provided that the net amount of the turnover in the previous immediate tax period is less than EUR 3 million (pesetas 499,158,000).

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 the annual accounts. consolidated, approved by Royal Decree 1815/1991 of 20 December. "

Article 2. Incentives for reinvestment in small-scale enterprises.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and Article 127 of Law 43/1995 of 27 December of the Corporate Tax is worded as follows:

" Article 127. Depreciation of property assets subject to reinvestment.

1. The elements of the immobilised material affected by economic holdings in which the reinvestment of the total amount obtained in the onerous transfer of items of the tangible fixed assets, also affected by economic holdings, materializes, made in the tax period in which the conditions of Article 122 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 21.1 of this Law.

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 3. Deduction for the promotion of the use of new technologies by small-scale enterprises.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and A new Article 33a is added to Law 43/1995 of 27 December of the Corporate Tax, with the following wording:

" Article 33a. Deduction for the promotion of information and communication technologies.

1. Institutions which comply with the requirements laid down in Article 122 of this Law shall be entitled to a deduction in the full quota of 10 per 100 of the amount of the investment and the expenditure of the period relating to the improvement of their capacity access and management of commercial transaction information over the Internet, as well as the improvement of its 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 ') Installing and deploying such systems.

4 ') Training of the company's staff for use.

b) Presence on the Internet, which will include:

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

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

3 ') Installing and deploying such systems.

4 ') Training of the company's staff for use.

c) Electronic commerce, which will include:

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

3 ') Installing and deploying such systems.

4 ') Training of the company's staff 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 ') Installing and deploying such systems.

4 ') Training of the company's staff 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 4. Deduction for personnel training expenses in the use of new technologies.

With effect on the Company Tax for the tax periods beginning from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures of A new paragraph 3 is added to Article 36 of Law 43/1995 of 27 December of the Corporate Tax, with the following wording:

A new paragraph 3 is added to Article 36 of Law 43/1995 of 27 December 1995.

" 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 of the equipment and terminals necessary to access it, with its "software" and associated peripherals, even when the use of the same 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 5. Modification of the deduction for activities of scientific research and technological innovation in the Corporate Tax.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and Article 37 of Law 43/1995 of 27 December of the Corporate Tax is worded as follows:

" Article 37. Rules common to the deductions provided for in this Chapter.

1. The deductions provided for in this Chapter shall be made 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 five years. However, the amounts corresponding to the deductions provided for in Articles 33 and 33a of this Law may be applied in the settlement of the tax periods concluded in the immediate and successive ten 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 are produced, 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 referred to in this paragraph, applied in the tax period, shall not be more than 35 per 100 of the full share of the deductions to avoid double taxation both internally and internationally and bonuses. However, the limit shall be raised to 45% where the amount of the deduction provided for in Articles 33 and 33a, 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 useful life, 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. "

Article 6. Abolition of the limitations on the right to deduct in the Value Added Tax and the Indirect General Tax Canarian, in the assumptions of perception of grants for research, development or innovation activities technology.

One. The third subparagraph of Article 104 (2) (2) of Law 37/1992 of 28 December 1992 on the value added tax shall be drawn up in the following terms

" For the purposes of the preceding paragraphs of this number 2. no account shall be taken of the following subsidies which do not include the tax base of the tax in accordance with Article 78 of the Law:

(a) Those received by the special employment centres governed by Law 13/1982 of 7 April, when they meet the requirements laid down in Article 43 (2

.

(b) Those funded from the European Agricultural Guidance and Guarantee Fund (EAGGF).

(c) Those funded under the Financial Instrument for Fisheries Guidance (FIFG).

(d) Those granted for the purpose of financing expenditure for carrying out research, development or technological innovation activities. For these purposes, they shall be regarded as such activities and costs of carrying out the same as those defined in Article 33 of Law 43/1995 of 27 December 1995 on Corporate Tax. '

Two. The fourth subparagraph of Article 37 (2) (2) of Law 20/1991 of 7 June, amending the tax aspects of the Economic and Fiscal Regime of the Canary Islands, shall be worded as follows:

" For the purposes of the preceding paragraphs of this paragraph 2. no account shall be taken of the following subsidies which do not include the tax base of the tax in accordance with Article 22 of the Law:

(a) Those received by the special employment centres governed by Law 13/1982 of 7 April, when they meet the requirements laid down in Article 43 (2

.

(b) Those aimed at enabling the supply of Community products or available on the European Union market, provided for in the programme of specific options for the remoteness and insularity of the Canary Islands.

(c) Those granted for the purpose of financing expenditure for the implementation of research, development or technological innovation activities. For these purposes, they shall be regarded as such activities and costs of carrying out the same as those defined in Article 33 of Law 43/1995 of 27 December 1995 on Corporate Tax. '

Article 7. Reduction to one year of the deadline for the bonus of income earned by companies and venture capital funds.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and Article 69 of Law 43/1995 of 27 December of the Tax on Societies is worded as follows:

" Article 69. 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, shall enjoy partial relief for the income they obtain in the transmission of shares and shares in the capital of undertakings, as referred to in Article 2.1 of that Law, in which they participate, according to the year of transmission computed from the time of the acquisition. This exemption shall be 99 per 100 from the beginning of the second year and up to the twelfth year, inclusive.

An extension of the latter period may exceptionally be permitted until the 17th year, including. Regulations shall determine the assumptions, conditions and requirements that they enable for such an extension.

With the exception of the assumption provided in the previous paragraph, the exemption will not apply in the first year and from the 12th.

2. Dividends and, in general, shares in profits received from the companies which the venture capital companies and funds promote or encourage will enjoy the deduction provided for in Article 28.2 of this Law whichever is the percentage of shares and holding time of shares/units.

3. Dividends and, in general, shares in profits received from companies and capital-risk funds shall enjoy the deduction provided for in Article 28.2 of this Law, irrespective of the percentage of the holding and the time of the holding of shares or shares. '

TITLE II

Measures relating to pension and life insurance plans

Article 8. Increase of the reduction limits in the tax base of the Income Tax of the Physical Persons by contributions to pension plans. Extension of the tax regime of pension schemes to the spouses of the recipients of income.

New wording is given to the number 4. º and two new numbers are added 5. º and 6. to Article 46 (1) of Law 40/1998, of December 9, of the Income Tax of the Physical Persons and other Tax Rules, in the following terms:

" 4. The contributions made by the participants in pension plans, including the contributions of the promoter who had been imputed to them in terms of performance of the work.

5. º The maximum set of these reductions will be the smallest of the following amounts:

(a) 25 per 100 of the sum of the net income of the work and of the economic activities received individually in the financial year.

For these purposes, income from economic activities shall be considered to be the income of the transparent companies governed by Article 75 (1) (b) and (c) of Law 43/1995 of 27 December 1995 on the tax on Companies, their partners who, in fact, exercise their activity through them as professionals, artists or sportspersons.

However, in the case of participants or mutualists over fifty-two years, the percentage above shall be 40 per 100.

b) 1,200,000 pesetas (7,212,15 euros) per year.

However, in the case of members or mutualists over fifty-two years, the above limit shall be increased by an additional 100,000 pesetas (601,01 euro) for each year of the participating or mutualist age exceeding Fifty-two, fixed at 2,500,000 pesetas (15.025.30 euros) for members or mutualists of sixty-five years or more.

6. In addition to reductions made in accordance with the above limits, taxpayers whose spouse does not obtain net income from work or economic activities, or obtain them at a value of less than 1,200,000 Pesetas (EUR 7,212,15) per year, may reduce the contributions made to pension schemes and social welfare insurance schemes for which the spouse is a member or mutualist in the general tax base, with a ceiling of 300,000 pesetas (EUR 1,803,04) per year. '

Article 9. Transfers between spouses to make contributions to pension plans in accordance with article 46.1.6. of the Law on the Income Tax of the Physical Persons.

Transmissions between spouses that occur as a result of the provisions of Article 46.1.6. of Law 40/1998 of 9 December of the Income Tax of the Physical Persons and other Tax Rules, not shall be subject to the Succession and Donation Tax up to the limit laid down in that provision.

Article 10. Lifting of the limits applicable to pension schemes and social welfare insurance schemes constituted in favour of persons with disabilities.

The amounts of 1.100,000 pesetas (6,611.13 euros) and 2,200,000 pesetas (13,222,27 euros) referred to in the additional 17th of Law 40/1998 of 9 December of the Income Tax of Persons Physical and other Tax Standards, they rise to 1,200,000 pesetas (7,212.15 euros) and 2,500,000 pesetas (15,025.30 euros), respectively.

Article 11. Lifting of the contribution limits to pension schemes.

New wording is given to Article 5 (3) of Law 8/1987, of 8 June, on the regulation of Pension Plans and Funds, which will be drawn up in the following terms:

" 3. The maximum annual contributions to the pension schemes covered by this Law, including, where appropriate, those which the promoters of such schemes impute to members, may in no case exceed 1,200,000 pesetas (7,212,15%). (euro).

However, in the case of participants over the age of fifty-two years who are not sufficiently in age, the above limit will be increased by an additional 100,000 pesetas (601,01 euros) for each year of age. of the participant in excess of fifty-two, with a total of 2,500,000 pesetas (15,025,30 euros) for participants aged 60 and five years.

The maximum limit set in this section will be applied individually to each integrated participant in the family unit. "

Article 12. Improvement of the voluntary social provision of the disabled.

Paragraph 1 of the additional seventeenth provision of Law 40/1998 of 9 December of the Income Tax of the Physical Persons and Other Tax Rules is worded as follows:

" 1. Contributions to the pension scheme may be made by both the disabled person himself or persons who have a direct or collateral relationship with the same person up to and including the third degree, as well as the spouse or those who they were in charge of them under a tutelage or a host system. In these latter cases, people with disabilities will have to be designated as beneficiaries in a unique and irrevocable way for any contingency. However, the death contingency of the disabled person may give rise to the right to benefits, orphans or those who have made contributions to the disability pension scheme in proportion to their contribution.

Such contributions shall not be subject to the Succession and Donation Tax. "

Article 13. Mutuality of professional athletes.

An additional twenty-third provision is added to Law 40/1998, of December 9, of the Income Tax of Physical Persons and other Tax Rules, with the following wording:

" Additional twenty-third disposition. Mutual social security of professional sportsmen.

One. Professional and high level sportspersons may contribute to the mutual social security provision at the fixed premium of professional athletes, with the following specialties:

1. Subjective scope. Professional sportsmen and women will be considered to be included in the scope of Royal Decree 1006/1985 of 26 June, which regulates the special employment relationship of professional sportsmen and women. High level athletes will be considered to be included in the scope of Royal Decree 1467/1997, of 19 September, on high level athletes.

The condition of a mutualist and insured person will rest, in any case, on the professional or high level athlete.

2. Contributions. They may not exceed the annual contributions of 2,500,000 pesetas (15,025,30 euros), including those which have been charged by the promoters in terms of income from the work when the latter are carried out in accordance with the provided for in the first provision of Law 8/1987 of 8 June.

No contributions shall be admitted after the end of the working life as a professional athlete or the loss of the status of a high level athlete in the terms and conditions laid down in regulation.

3. Contingencies. The contingencies that may be covered are those provided for in the pension plans in Article 8.6 of Law 8/1987 of 8 June.

4. Provision of consolidated rights. The consolidated rights of the mutualists may be made effective only in the cases provided for in Article 8 (8) of Law 8/1987 of 8 June and, in addition, after one year after the end of the working life of the athletes. professional or since the condition of high level athletes is lost.

5. Tax regime.

(a) Contributions, direct or imputed, that meet the above requirements may be reduced in the general part of the taxable base of the Income Tax of the Physical Persons, with the limit of the sum of the net income from work and economic activities received individually in the financial year and up to a maximum of 2,500,000 pesetas per year (EUR 15,025,30).

(b) The provision of the consolidated rights in cases other than those mentioned in the preceding number 4 shall determine the obligation for the taxpayer to replenish the reductions unduly made in the tax base, with the practice of supplementary statements-liquidations, which shall include interest on late payment. In turn, the amounts received by the advance provision of the consolidated duties shall be taxed as income from the capital, except where they come from insurance contracts as referred to in the first provision of the Law 8/1987, of 8 June, of regulation of Pension Plans and Funds, in which case they will be taxed as income of the work.

(c) The benefits received, as well as the perception of the consolidated rights in the assumptions provided for in the preceding number 4, shall be taxed in their entirety as income from the work.

Two. Irrespective of the special scheme provided for in the previous paragraph, professional and high level athletes, even if they have completed their working life as professional athletes or have lost the status of high level athletes, may contribute to the mutual social security of professional sportspersons.

Such contributions may be subject to reduction in the general portion of the tax base of the Income Tax of the Physical Persons in the part that is intended to cover the contingencies provided for in the article. 8.6 of Law 8/1987 of 8 June, provided that they satisfy the requirements laid down in Article 46.1 (a), (b) and (c) of this Law.

As a maximum limit for the reduction of these contributions, the one that establishes Article 46.1.5. of this Law for the contributions to pension plans and insurance contracts signed with mutual insurance funds will be applied. social. "

Article 14. Tax allocation of premiums for life insurance contracts to cover corporate pension commitments.

Article 16 (1) (e) of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" e) The contributions or contributions paid by the promoters of pension schemes, as well as the amounts paid by employers to meet the pension commitments in the terms foreseen by the The first provision of Law 8/1987, of 8 June, for the regulation of the Pension Plans and Funds, and in its implementing legislation, when the same are imputed to those persons to whom the benefits are linked. This tax allocation shall be binding in the life insurance contracts which, by way of the granting of the right of rescue or by any other formula, allow for their early provision in cases other than those provided for in the provision of pension schemes by the persons to whom the benefits are linked. For such purposes, insurance which incorporates the right to rescue for the cases of serious illness or long-term unemployment shall not be deemed to be permitted under the terms to be laid down in regulation. "

Article 15. Lifting of the reducing coefficients applicable to yields derived from life insurance contracts.

In Articles 17 (2) (c) and (d) and (d) and (c) of Law 40/1998 of 9 December 1998 on the Income Tax of the Physical Persons, the percentages of 60 per 100 and 70 per 100 are, respectively, of the 65 per 100 and 75 per 100.

Article 16. Modification of the regulation of the tax treatment of insurance contracts in which the taker assumes the risk of the investment.

Article 24 (3) of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" 3. The reductions provided for in paragraph 2 (b) of this Article shall not apply to income derived from the perceptions of life insurance contracts in which the taker assumes the risk of investment, except in such cases. contracts are in any of the following circumstances:

A) The holder is not granted the power to modify the investments affected to the policy.

B) The mathematical provisions are invested in:

(a) Shares or units of collective investment institutions, predetermined in contracts, provided that:

This is a collective investment institution adapted to Law 46/1984 of December 26, a regulator of the Collective Investment Institutions.

It is a question of collective investment institutions covered by Council Directive 85 /611/EEC of 20 December 1985.

(b) Asset sets reflected separately in the balance sheet of the insurance undertaking, provided that the following requirements are met:

The determination of the individual assets of each of the separate sets of separate assets must at all times correspond to the insurer who, for these purposes, will enjoy full freedom to choose the assets. assets subject only to default general criteria relating to the risk profile of the asset pool or to other objective circumstances.

The investment of the provisions shall be made in the assets eligible for the investment of the technical provisions, as set out in Article 50 of the Regulation on the management and supervision of private insurance, approved by Royal Decree 2486/1998 of 20 November, with the exception of real estate and real estate rights.

The investments of each asset pool must comply with the diversification and dispersion limits established, as a general rule, for insurance contracts under Law 30/1995, of 8 November, of Ordination and Supervision of Private Insurance, its Regulation, approved by Royal Decree 2486/1998 of 20 November, and other rules that are in the development of that Regulation.

However, it is understood that these requirements are met by those sets of assets which seek to develop an investment policy characterised by the reproduction of a given stock index or fixed income index some of the official secondary markets for securities of the European Union.

The taker will only have the power to choose, between the different sets of assets, in which the insurance institution must invest the mathematical provision of the insurance, but in no case can he intervene in the determination of the individual assets in which, within each separate set, such provisions are invested.

In these contracts, the policyholder or policyholder may choose from a limited number of collective investment institutions or separate sets of assets expressly designated in the contracts, in no case exceeding 10, without unique specifications may be produced for each taker or policyholder.

The conditions referred to in this paragraph must be met for the duration of the contract. "

Article 17. Fractionated payment of the Tax on Successions and Donations.

A paragraph 4 is added to Article 39 of Law 29/1987 of 18 December of the Tax on Successions and Donations, with the following wording:

" In life insurance in which the deceased is in turn the contractor or the insured in the collective insurance and whose amount is collected in the form of income, the payment of the tax shall be broken down at the request of the beneficiary in the number of years in which the pension is received, if the income is temporary, or a maximum of 15 years if it is for life, until the right of ransom is exercised.

The postponement will not require the constitution of any kind of course without any interest whatsoever.

Due to the termination of the pension, the outstanding split payments will cease to be payable, which will, however, be in case of exercise of the right to rescue.

The procedure for the application of the provisions of this paragraph will be determined. "

TITLE III

Measures relating to property gains and losses and to the treatment of savings and investment

Article 18. Reduction to one year of the deadline to integrate property gains and losses into the special part of the tax base.

Article 39 (1) of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" 1. The special part of the tax base shall consist of the positive balance resulting from the exclusive integration and compensation of the profits and losses in each tax period which are apparent on the occasion of the transfers of acquired assets or improvements made to them, more than one year in advance of the date of transmission or of the subscription rights corresponding to securities acquired at the same time. "

Article 19. Reduction of the special rates for the determination of the full state quota.

Article 53 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" Article 53. Special types of liens.

1. The special liquidable base shall be taxed at the rate of 15,30 per 100.

2. The special liquidable taxpayer base referred to in Article 9 (2) and (3) of this Act shall be taxed at the rate of 18 per 100. '

Article 20. Reduction of special rates for the determination of the autonomous full quota.

Article 63 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" Article 63. Type of special charge.

The special liquidable base will be taxed at the rate of 2.70 per 100. "

Article 21. Reduction of the percentage of withholding and payment to account applicable to income obtained as a result of the transmission or redemption of shares or units in collective investment institutions.

The percentage applicable to income obtained as a result of the transmission or redemption of shares or units in collective investment institutions, for the calculation of deductions and other payments on account of the Tax on the Income of the Physical Persons or the Tax on Societies, shall be 18 per 100.

Reglamentarily this percentage can be modified.

Article 22. Treatment in the Income Tax of the Physical Persons from the lucrative transmissions of certain financial assets.

A new paragraph 6 is added to Article 23 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules, which shall be worded as follows:

" 6. It shall be estimated that there is no return on equity in the gainful transmissions, because of the death of the taxpayer, of the assets representative of the collection and use of foreign capital referred to in paragraph 2 of this Article. this article. "

Article 23. Treatment in the Income Tax of the Physical Persons and in the Income Tax of non-residents of the distribution of the premium of shares or participations and the reduction of capital with return of contributions.

One. With effect from 1 January 2001, a new point (5) is added to Article 23 (1) (a) of Law 40/1998 of 9 December 1998 on the Income Tax of the Physical Persons and other Tax Rules, with the following wording:

" 5. The distribution of the premium for shares/units. The amount obtained shall, until its cancellation, be the value of the acquisition of the shares or units concerned and the excess which may be taxed as a return on capital. '

Two. With effect from 1 January 2001, the second subparagraph of Article 31 (3) (a) of Law 40/1998 of 9 December 1998 on the Income Tax of the Physical Persons and other Tax Rules is hereby reworded. following terms:

" Where the reduction of capital is intended to return contributions, the amount of the capital reduction or the normal market value of the goods or rights received shall bear the value of the acquisition of the securities or shares/units affected, in accordance with the rules of the previous paragraph, until its cancellation. The excess that could be taxed as the return on capital, in the same way as established for the distribution of the emission premium in Article 23 of this Law. "

Three. With effect from 1 January 2001, new wording is given to Article 23 (4) of Law 41/1998 of 9 December of the Income Tax of Non-Residents and Tax Rules, in the following terms:

" 4. The taxable amount corresponding to the capital gains shall be determined by applying the rules laid down in Section 4, Chapter I of Title II, except for Article 31 (2) and in the Title of Title II, to each property alteration occurring. VIII of Law 40/1998, of the Income Tax of the Physical Persons and other Tax Rules.

In the case of non-resident entities, where the wealth gain comes from a profit acquisition, the amount shall be the normal market value of the item purchased. "

Four. With effect from January 1, 2001, it shall not be subject to withholding or income from the Income Tax of the Physical Persons or the Income Tax of Non-Residents the yield derived from the distribution of the issuance premium actions or participations, or the reduction of capital.

Reglamentarily may be required to practice retention or entry into account in these assumptions.

Article 24. Tax regime in the Corporate Tax and in the Income Tax of the Physical Persons of certain securities loans.

In the terms that are determined to be determined, they will not result in changes in the income tax of the Physical Persons or in the Company Tax corresponding to the lender, the transactions of securities lending that meet the requirements set out in Article 36.7 of Law 24/1988 of 28 July 1988 on the Securities Market and in its development regulations.

Article 25. Exemption from habitual housing in the Heritage Tax.

1. A new number nine is added to Article 4. of Law 19/1991, of 6 June, with the following content:

" Nine. The habitual housing of the taxpayer as defined in article 55.1.3. of Law 40/1998 of 9 December of the Income Tax of the Physical Persons up to a maximum amount of 25,000,000 pesetas (150,253,03 euros). "

2. A new number three is added to Article 25 of Law 19/1991 of 6 June, with the following content:

" Three. In no case shall the debts incurred for the acquisition of exempt goods or rights be deducted. Where the exemption is partial, the proportion of the debts shall be deductible, where appropriate. "

TITLE IV

Business internationalization support measures

Article 26. Measures to avoid international double taxation on Corporate Tax.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and The company has two new articles, 20a and 20b, in Law 43/1995, of 27 December, of the Corporate Tax, with the following wording:

" Article 20a. 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 5 per 100.

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 necessary 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 Code of Trade 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 whether the object of the the income itself, the income or any other element of the income of that income.

This requirement shall be presumed to be met, unless otherwise proved, when the participating entity is resident in a country with which Spain has an agreement to avoid international double taxation, application and containing information exchange clause.

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 per 100 of the revenue from the exercise corresponds to:

(a ') Rentas that have been obtained abroad and which are not included among those income classes referred to in Article 121 (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 point (b).

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 means personal and material available to the participating 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. Insured and reinsurer, 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 the risks are carry out through the organisation of personal and material means available to the participating entity.

b ') 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 referred to in point (a); where the referred benefits and entities comply, in turn, with the requirements set out in the other points 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 referred to in point (a) of the previous paragraph shall be met on the day on which the transmission occurs. The requirements laid down in points (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 VIII of this Law, the exemption shall apply under the conditions laid down in point (d) of this Law. paragraph.

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% 100 of the market value of your 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 the participation in the non-resident entity has been assessed in accordance with the rules of the special scheme of Chapter VIII of Title VIII of this Law and the application of those rules, including in a transmission above, would have determined the non-integration of income in the tax base of this tax, the Income Tax of the Physical Persons or the Income Tax of non-residents, derived from:

a ') The transmission of the participation in a resident entity in Spanish territory.

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

c ') Non-cash input from other heritage items.

In this case, the exemption shall only apply to the income corresponding to the positive difference between the transmission 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 transparent companies.

(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 29 or 30 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 20b. 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 20a (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 29 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 12 (1) (a) of Law 41/1998 of 9 December 1998 on the Income Tax of non-residents. 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 point (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 27. Special arrangements for mergers, divisions, transfers of assets and exchange of securities.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and A new paragraph 3 is added to Article 110 of Law 43/1995 of 27 December of the Corporate Tax, with the following wording:

" 3. The income deferral scheme contained in this Chapter shall be incompatible, in accordance with the terms laid down in Article 20a 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. '

Article 28. Extension of the time limit for the calculation of deductions to avoid international double taxation.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and (a) the average company, the seven-year period referred to in Articles 29 (4) and 30 (4) of Law 43/1995 of 27 December 1995 on the Corporate Tax, becomes ten years.

Article 29. Deduction in Corporate Tax on the establishment of companies abroad.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and A new article, 20c, is added in Law 43/1995 of 27 December of the Corporate Tax, with the following wording:

" Article 20c. 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 Article 20a (1) (c) 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 5 billion pesetas (30,050,605,22 euros), without exceeding 25 per 100 of the tax base of the tax period prior to the calculation of the tax period.

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 34 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 the tax base of the company. complete 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 30. Modification of the regime of foreign securities holding entities.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and In the case of the medium-sized enterprise, Articles 129 to 132 of Law 43/1995 of 27 December of the Company Tax will be worded as follows:

" CHAPTER XIV

Foreign Securities Holding Entities ' Regime

Article 129. 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.

Transparent societies will not be able to enjoy the regime 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 130. 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 in Spanish territory, as well as the income derived from the transmission of the corresponding participation, may enjoy the exemption to avoid the international economic double taxation under the conditions and with the requirements laid down in Article 20a of this Law.

For the purposes of applying the exemption, the minimum participation requirement referred to in Article 20a (1) (a) shall be deemed to be met if the acquisition value of the holding is greater than 6%. EUR million (pesetas 998,316,000). The indirect holding of the holding of foreign securities on its subsidiaries of a second or subsequent level, for the purposes of applying the provisions of Article 20a (1) (c) (c) of this Law, shall respect the minimum percentage of 5 per 100.

Article 131. 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 28 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 the terms of Article 67 of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons 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 benefits received.

(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 point (a) shall apply. The distribution of the emission premium will have the treatment provided for in this letter 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 28 (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 20a 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 relation to the the foreign securities holding entity complies with the requirements set out in Article 20a 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 20a 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 it, as well as provide its partners with the information necessary to enable them to comply with the provisions of the preceding paragraphs.

4. The provisions of paragraph 1 (c) and point (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 132. Application of this scheme.

1. The enjoyment of the scheme shall be conditional upon compliance with the factual assumptions relating thereto, 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 108 of this Law, irrespective of the percentage of participation in the the holding of securities which such contributions confer, provided that the income derived from such securities is able to benefit from the scheme provided for in Article 20a of this Law. '

Article 31. Tax consultations in relation to the regime of foreign securities holding entities.

A new letter (h) is incorporated in Article 107 (4) of Law 230/1963 of 28 December, General Tax, with the following wording:

"(h) Interpretation and application of the regime established for foreign securities holding entities in the Company Tax Act."

Article 32. Exemption in the Income Tax of the Physical Persons for the income received for work carried out abroad.

With effect for the tax periods starting from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family and small and small and Article 7 (p) of Law 40/1998 of 9 December of the Tax on the Income of Physical Persons and other Tax Rules is read as follows:

" p) The income from work perceived by work actually done abroad, with the following requirements:

1. º such works are performed for a non-resident company in Spain or a permanent establishment based abroad.

2. º that in the territory in which the works are carried out, a tax of an identical or similar nature to that of this tax is applied and is not a country or territory that has been regulated as a paradise fiscal.

The exemption will have a maximum limit of 10,000,000 pesetas per year (60,101.21 euros). This amount may be amended.

This exemption will be incompatible, for taxpayers destined abroad, with the regime of excesses excluded from taxation provided for in Article 8.A. 3.b) of the Regulation of this Tax, approved by Real Decree 214/1999 of 5 February, whichever is the amount. The taxpayer may opt for the application of the excess regime to replace this exemption. "

Article 33. Option to pay for personal obligation in the Heritage Tax of workers posted abroad.

Article 5 (1) (a) of Law 19/1991 of 6 June of the Heritage Tax is worded as follows:

" (a) By personal obligation, natural persons who have their habitual residence on Spanish territory, requiring the tax for the whole of their net worth regardless of the place where they are located; property or the rights may be exercised.

When a resident in Spanish territory becomes resident in another country, they may choose to continue to pay for personal obligation in Spain. The option shall be exercised by the submission of the declaration by personal obligation in the first financial year in which it is no longer resident in the Spanish territory. '

Article 34. Tax regime of the Institutions of Collective Investment in Corporate Tax.

Article 71 (1) of Law 43/1995 of 27 December of the Company Tax will be worded as follows:

" 1. The collective investment institutions governed by Law 46/1984 of 26 December 1984 of the institutions of collective investment, with the exception of those subject to the general rate of charge, shall not be entitled to any deduction of the quota or the Exemption from income in the tax base to avoid international double taxation. "

TITLE V

Payments-to-Account System Measures

Article 35. Amendment of Article 83 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules.

Article 83 (1) of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons and other Tax Rules shall be worded as follows:

" 1. Deductions and income on account of income from work arising from employment or statutory and pension relationships and liabilities shall be determined by reference to the amount which would result from the application of the fees to the base of the withholding or income to account. In order to determine the percentage of withholding or income to be taken into account, the personal and family circumstances, and, where applicable, the income of the spouse and the reductions and deductions, as well as the variable remuneration, may be taken into consideration. foreseeable, in terms of the regulations being established. For these purposes, variable remuneration shall be presumed to be at least foreseeable in the previous year, unless circumstances permit an objective to be established in an objective manner.

In job yields other than previous ones, the percentage of retention or income on account may not exceed 40 per 100. "

Article 36. Quantitative limit excluding the obligation to retain for the year 2000.

1. With exclusive effects for the year 2000, no retention shall be made on the income of the work, the amount of which, as provided for in the Tax Regulation, does not exceed the annual amount corresponding to the following table:

Taxpayer situation

Number of children and other descendants
0	1	2 or more
1. Single Contributor, widowed, divorced, or separated legally	-	1.675,000	1,850,000
2. Contributor Whose Spouse does not earn rents greater than 100,000 pesetas annually	1.675,000	1,850,000	2,025,000
3. Other situations	1,250,000	1.350,000	1,450,000

For the purposes of the application of the above table, it is understood by children and other descendants that they give the right to the family minimum provided for in Article 40.3 of the Tax Law.

As for the taxpayer's situation, this may be one of the following three:

1. Single contributor, widowed, divorced or legally separated. This is the single taxpayer, widowed, divorced or legally separated with descendants, when he is entitled to the minimum number of staff referred to in Article 70.2.3. of the Tax Law for Family Units Single-parent.

2. Contributor whose spouse does not earn income exceeding 100,000 pesetas per year. The taxpayer is married, and not legally separated, whose spouse does not earn annual income exceeding 100,000 pesetas, including those exempt. If this amount is exceeded in the course of the calendar year, the rate of retention shall be regularised in the prescribed form.

3. Other situations. Includes three types of situations:

(a) The married taxpayer, and not legally separated, whose spouse obtains annual income of more than 100,000 pesetas, including those exempt.

(b) The single, widowed, divorced or legally separated taxpayer, without descendants or descendants of his or her dependants when, in the latter case, he is not entitled to the increased amounts of the minimum staff for giving circumstances of coexistence referred to in Article 70.2.3. of the Law of the Tax.

c) Taxpayers who do not manifest to be in any of the previous 1 and 2 situations.

2. The amounts provided for in the above table shall be increased by 100 000 pesetas in the case of pensions or liabilities under the Social Security and Passive Classes scheme and in 200,000 pesetas for unemployment benefits or allowances.

3. The provisions of the foregoing paragraphs shall not apply where the fixed rates of retention, in the cases referred to in Article 75 (1), (2) and (3) of the Tax Regulation, correspond to the minimum rates of withholding tax as referred to in Article 80.2 of that Regulation.

Article 37. Exclusive quantitative limit of the obligation to retain for the year 2001.

As provided for in the additional provision novena, "A quantitative limit excluding the obligation to retain for the year 2000", it shall also apply from 1 January 2001. However, the amount of the income of the spouse of the taxpayer referred to in that additional provision shall be 250,000 pesetas (1,502,53 euros) per year, including those exempted.

The amounts referred to in this additional provision may be modified.

Article 38. Payments on account in the amounts paid under judicial or administrative judgment.

One. A new paragraph 9 is added to Article 82 of Law 40/1998 of 9 December of the Income Tax on Physical Persons and other Tax Rules, with the following wording:

" 9. Where, by virtue of a judicial or administrative decision, an income subject to withholding tax or withholding tax is to be met, the payer must practise the income on the full amount which he is obliged to satisfy and must enter its amount in the Treasury, as provided for in this Article. "

Two. A new paragraph 5 is added to Article 146 of Law 43/1995 of 27 December of the Company Tax, with the following wording:

" 5. Where, by virtue of a judicial or administrative decision, an income subject to withholding tax or withholding tax is to be met, the payer must practise the income on the full amount which he is obliged to satisfy and must enter its amount in the Treasury, as provided for in this Article. "

Three. If, in the course of the year 2000, an income subject to withholding tax or income tax on the Income of the Physical Persons or the Company Tax has been satisfied, pursuant to a judicial or administrative decision, and, in accordance with that the payer would have been obliged to pay his full amount to the competent administrative or judicial body, even if the corresponding retention or entry into account has been carried out and entered, the retainer may request the Tax administration the refund of the amount paid for this concept. In this case, the income recipient will compute the income for the collected full amount and will not be able to deduct the withholding and income to account referred to in this paragraph.

Article 39. Consequences of the change of residence.

One. A new point (e) is added to Article 65 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules, in the following terms:

" (e) Where the taxpayer acquires his/her status for change of residence, withholding and income as referred to in Article 82 (8) of this Law, as well as the satisfied income of the Income Tax of non-residents and accrued during the tax period in which the change of residence occurs. "

Two. A new paragraph 8 is added to Article 82 of Law 40/1998 of 9 December of the Income Tax of Physical Persons and other Tax Rules, in the following terms:

" 8. Where the taxpayer acquires his/her status for a change of residence, they shall be considered as payment on account of the withholding tax and income on account of the Income Tax of non-residents practiced during the tax period in which the change of residence occurs. "

Three. Article 85 (1) and (2) of Law 40/1998 of 9 December 1998 on the Income Tax of Physical Persons and other Tax Rules are hereby worded as follows:

" 1. Where the sum of the withholding tax, income on account and payments of this tax, as well as the contributions of the Income Tax of non-residents referred to in Article 65 (e) of this Law, is higher than the amount of the fee resulting from the reverse charge, the tax authorities shall, where appropriate, carry out provisional liquidation within six months of the end of the period laid down 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, as the case may be, the provisional liquidation, is less than the sum of the amounts actually withheld and the payments on account of this tax, as well as of the taxes on the the Income of non-residents referred to in point (e) of Article 65 of this Law, the tax authorities shall return the excess over the said quota, without prejudice to the practice of subsequent settlements, provisional or definitive, to proceed. "

Four. A new article 39 is added to Law 41/1998, of 9 December, of the Income Tax of Non-Residents and Tax Rules, with the following wording:

" Article 39. Deduction of payments on account of the Income Tax of the Physical Persons.

When a taxpayer acquires his/her status for change of residence, they will have the consideration of withholding or income on account of this tax payments on account of the Income Tax of the Physical Persons practiced from the beginning of the year until the tax administration has been credited with the change of residence, when such payments to account correspond to income subject to this tax levied by the taxpayer. "

Additional disposition first. Effects of the loss of the consolidated reporting regime and the extinction of the group of companies.

Article 95 (1) (c) of Law 43/1995 of 27 December 1995 on Corporate Tax is worded as follows:

" (c) The companies that integrate the 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 company group's share deductions, in the proportion in which they have contributed to the training of the same.

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 Act for the outstanding deduction, counted from the following or following the one or those in which the amounts to be deducted were determined. "

Additional provision second. Financial support to technology-based companies.

1. A line of support for the capitalisation of technology-based companies will be created, the purpose of which will be the financing of the participation in the capital of companies with high technological content by financial institutions whose social object is temporary participation in the capital of non-financial undertakings. Those financial institutions shall be registered with the National Securities Market Commission and/or supervised by the Banco de España.

The support line will cover the loan formula granted by the Ministry of Science and Technology to the financial institution with a maximum of seven years ' depreciation period and a zero interest rate, and may be grant without any additional guarantees or guarantees to the project's own viability.

The financial institution shall apply this financing for the taking of equity in the capital of undertakings which commence its business or in capital increases of already existing undertakings with less than two years of operation. The amount of the loan granted by the Ministry of Science and Technology shall be limited to a maximum of 75 per 100 of the participation in the participating undertaking by the financial institutions.

The settlement of the loan shall be effected, rather than by its original amount, by its updated value depending on the value of the shares of the company involved at the time of the disinvestment by the financial institution or the the final concession period if there has not been a prior divestment, thus making it possible for the disabled to be produced.

When capital gains are in place, financial institutions shall deduct a percentage of the capital gain, which shall be determined on a regulatory basis, as a success premium.

The value of the actions to these effects will be the largest of the following:

a) The selling one.

b) The theoretical value determined by independent audit firms, at the time of disinvestment.

The conditions for the contracting and settlement of the loans and the management regulations of these loans will be regulated by Royal Decree on the proposal of the Ministry of Science and Technology.

In the aforementioned Royal Decree the criteria and procedures for granting these loans will be regulated, with the criteria of transparency and free competition prevailing, as well as the feasibility of the project.

Financial institutions will be able to obtain in the form of a commission by selection and project management up to a certain percentage of the amount of the loan granted by the Ministry of Science and Technology, which will be liquidated only once at the time of the divestment or liquidation at the end of the concession period if there has been no prior divestment.

The General Budget Law of the State shall fix the maximum amount of the operations that may be authorized in each financial year under this support line.

2. A financing line will be set up to support business projects of technology-based companies, using the participatory lending instrument governed by Article 20 of the Royal Decree-Law 7/1996 of 7 June 1996, and amended by the second provision of Law 10/1996 of 18 December 1996.

For the application of this line, the "National Innovation Company, S. A." (ENISA) shall, in the form determined by agreement, receive loans from the Ministry of Science and Technology provided for this financing line, which shall have a maximum repayment period of eight years at zero and no interest rate. need for guarantees.

The Ministry of Science and Technology will regulate, by agreement with ENISA, the conditions, criteria and procedures for granting and controlling these participative loans.

Possible failures to be generated by the application of this line will reduce the amount of the loans to ENISA at the time of settlement at the end of the concession period. In addition, the potential generated capital gains will be determined in the manner in which the updated loan value to be reintegrated by ENISA is established in the convention.

ENISA will obtain a percentage of the borrowed funds as a management fee, which will be determined in the agreement.

Annually the maximum amount of the operations that may be authorized in each financial year under this support line shall be established in the General Budget Law of the State.

3. In the year 2000, the lines set out in the preceding paragraphs shall be financed from budget applications 20.04.542E.821.18. and 20.04.542E.831.18, and in successive financial years with equivalent budgetary applications.

First transient disposition. Regime applicable to the outstanding property losses to compensate in the Income Tax of the Physical Persons, generated between one and two years.

The property losses referred to in Article 38 (b) of Law 40/1998 of 9 December of the Income Tax of the Physical Persons and other Tax Rules corresponding to the 1999 tax period they are pending compensation on 1 January 2000 and which would have been made manifest on the occasion of the transfer of acquired assets or improvements made to them, with more than one year and up to two years ' In advance of the date of transmission, they shall continue to be compensated in accordance with the provisions of the said Article 38, point (b).

Second transient disposition. Deductions to be applied from Articles 29a and 30a of the Companies Tax Act.

The deductions referred to in Articles 29a and 30a of Law 43/1995 of 27 December 1995 on Corporate Tax, which are pending after the end of the current tax period on entry into On 23 June, the Royal Decree-Law No 3/2000 of 23 June 2000 approved urgent fiscal measures to encourage family savings and small and medium-sized enterprises to be deducted from the tax periods completed after that date in the case of the conditions and requirements laid down in those Articles.

Transitional provision third. Adaptation to the new regime of foreign securities holding entities.

1. The entities which, at the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises, have been granted the scheme of the institutions of the European Union. possession of foreign securities may waive the application of the regime of Chapter XIV of Title VIII of Law 43/1995, of 27 December, of the Tax on Societies, in the terms established by this Law, by means of communication to the Ministry of Hacienda before the end of the first tax period ending after its entry into force.

2. The conversion into nominative values of the securities representing the shares in the capital of the institutions, as at the entry into force of the Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal stimulus measures to the family savings, and small and medium-sized enterprises, have been granted the status of foreign securities holding entities to be carried out within the first tax period in which the new scheme is applicable.

Transitional disposition fourth. Application of the rules on the Income Tax of the Physical Persons.

In the event of the end of the tax period provided for in Article 13 of Law 40/1998 of 9 December 1998 on the Income Tax of the Physical Persons and other Tax Rules, prior to the entry into On 23 June, the Royal Decree-Law No 3/2000, which approved urgent fiscal measures to stimulate family savings and small and medium-sized enterprises, the successors of the deceased may choose to apply in the tax declaration on the The Income of the Physical Persons, corresponding to the latter, the regulations in force on the date of accrual of the tax or that in force at 31 December 2000.

Transient disposition fifth. Abolition of the limitations on the right to deduct in the Value Added Tax and the Indirect General Tax Canarian, in the assumptions of perception of grants for research, development or innovation activities technology.

As provided for in point (d) of the third subparagraph of Article 104 (2) (a) of Law No 37/1992 of 28 December 1992 on the value added tax, and in point (c) of the fourth subparagraph of paragraph 2. Article 37 of Law 20/1991 of 7 June, amending the tax aspects of the Fiscal Economic Regime of the Canary Islands, will be applicable in respect of the amounts of the subsidies that are collected from the entry into force of this Law, even in the case of grants which had been agreed before that date.

First repeal provision. Repeal of Articles 29a and 30a of the Companies Tax Act.

With effect for the tax periods initiated from the entry into force of Royal Decree-Law 3/2000 of 23 June, approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises Articles 29a and 30a of Law 43/1995 of 27 December of the Tax on Societies are repealed.

Repeal provision second. Repeal of Royal Decree-Law 3/2000 of 23 June approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises.

The Royal Decree-Law 3/2000 of 23 June is repealed, approving urgent fiscal measures to stimulate family savings and small and medium-sized enterprises.

Final disposition first. Regulatory development.

The Government is empowered to dictate how many provisions are necessary for the development and implementation of this Law.

Final disposition second. Entry into force.

This Law shall enter into force on the day following that of its publication in the "Official Gazette of the State".

Therefore, I command all Spaniards, individuals and authorities, to keep and keep this Law.

Madrid, 13 December 2000.

JOHN CARLOS R.

The President of the Government,

JOSÉ MARÍA AZNAR LÓPEZ