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

1

Background and Causes of Corporate Tax Reform

The Company Tax meets the objective of taxing the profits earned by legal entities. In this sense, the Corporate Tax is a supplement to the Income Tax of the Physical Persons in the framework of an income tax system. In addition, it serves as a withholding tax on the income of capital obtained by foreign investors through companies owned by its residents on Spanish territory.

Both objectives, which respond to the constitutional principles of sufficiency and justice set out in Article 31 of the Constitution, are a constant in the Corporate Tax. This Law does not alter these objectives and, therefore, the structure of the Company Tax which it contains does not imply a radical transformation of that tax.

The reasons for the corporate tax reform also do not put into question its current structure, although they do determine changes of some importance. These causes are as follows:

First. The partial reform of the commercial law, carried out by Law 19/1989, of July 25.

Second. The reform of the Income Tax of the Physical Persons, carried out by Law 18/1991, of June 6.

Third. The opening of our economy to the cross-border flows of capital.

Fourth. The dispersion of regulations currently under the Corporate Tax.

Fifth. -The evolution of the axes of the axes of the tax on the corporate tax.

With regard to the first cause, it should be noted that the object of the Company Tax is the income obtained by the legal entities, and that this magnitude is determined, for the vast majority of the taxable persons of the Corporation tax, by virtue of the accounting algorithm regulated by the principles and norms established in the Code of Commerce, the Law of Companies and the General Accounting Plan, basically.

Determining the tax base of the Company Tax from the accounting result, corrected by the legally classified exceptions, is one of the primary objectives of the Corporate Tax reform, the achievement of which will benefit the legal certainty of the taxpayer.

With regard to the second case, it should be noted that the Corporate Tax, in a tax system which seeks to tax the income in an extensive manner and for one time, constitutes a precedent for the tax on the Income of the Physical Persons. In fact, the Corporate Tax implies under this conception, which decidedly incorporates the Law, a withholding tax in respect of the income of capital obtained by natural persons through their participation in legal entities. In this sense, being subject to the Income Tax of the Physical Persons the totality of the income of the capital, the intimate relationship between the two tax figures and, therefore, the modification of the one of them necessarily has to have an impact on the other.

The method of eliminating the double taxation of dividends contained in Law 42/1994, of December 30, of Fiscal, Administrative and Social Order Measures, highlights the relationship previously mentioned, by embracing definitively the conception of the Tax on Companies as taxation of the income of capital applied to the performance of business activities that operates as a withholding tax on the source and with character of tax on account of the tax on the Income of the Physical Persons.

As far as the third case is concerned, it should be noted that the previously existing Corporate Tax was conceived on a closed economy, thus our economy is open to movements. International capital. This is probably the case with greater intensity in demand for a reform of the Corporate Tax, which, in large part, has been anticipated under the measures contained in Law 42/1994 of 30 December 1994 on Tax Measures. Administrative and Social Order, through the modification of the deduction for international double taxation and the incorporation, both in the Income Tax of the Physical Persons and in the Tax on Societies, of the so-called international tax transparency, the aim of which is to subject persons or entities to taxation resident in Spain the passive income obtained through non-resident entities enjoying a privileged tax regime.

As far as the fourth case is concerned, it must be recalled that, prior to this Law, a set of special schemes for the Corporate Tax, some of them, as the relative, were co-existed with the general scheme. to fiscal consolidation, whose regulation was prior to the Law 61/1978, of the Corporation Tax, which determined an important regulatory dispersion and certain interpretative insecurities.

The incorporation into a single legal text of the set of the special regimes within the Corporate Tax, exception made from the references to the cooperative societies and to certain non-profit entities due to its special characteristics, it is also one of the goals of the reform of the Tax on Societies that has fulfilled satisfaction in this Law.

With regard to the evolution of the axes of the axes, the financial and the tax systems of our environment, it is important to point out the preponderance of the theoretical working and the normative modifications justification in the principle of neutrality.

finally, the construction of a tax structure that reaches greater degrees of neutrality is an objective of the utmost importance that, in itself, would justify the legislative impulse aimed at the reform of the tax on Companies.

2

Principles of Reform

The establishment of guiding principles of corporate tax reform has been an essential element in the reform task, which was reflected in the report for the Corporate Tax Reform. This document and the debates on the proposals contained therein made a decisive contribution to the configuration of the content of the bill. The amendments, reports and debates in the legislative procedure have taken these principles as a reference point on a number of occasions, in such a way that the rules of this Law respond, in no small measure, to the "

The principles mentioned are: neutrality, transparency, systematization, international coordination and competitiveness.

The principle of neutrality requires that the application of the tax does not alter the economic performance of taxable persons, except that such alteration tends to overcome inefficient market balances. It is well understood that the principle of neutrality meets the economic objective of effectiveness in the allocation of economic resources. However, although of an economic nature, it links perfectly with the constitutional principles of generality and equality, here that according to the axis of this Law.

Measures such as the elimination of double taxation of dividends, the approach between the tax base and the accounting result, the selective nature of tax incentives and their justification based on balances In the case of market inefficient and the indifference of the tax rate to the application of profit, the principle of neutrality is, among other things, the principle of neutrality.

The principle of transparency requires that tax rules be intelligible and that a certain tax liability be derived from their application. This principle is apparent from the more general legal certainty, and in it they are inspired, inter alia, by the insertion of the special tax regimes into this Law and the possibility of making prior agreements on the price of transfer. Some norms, however, reflect the complex reality on which the Corporate Tax is projected, although its perfect understanding will be facilitated, in many cases, by the rules of accounting nature referring to this reality.

The principle of systematization demands that there be the most appropriate coordination between the Income Tax of the Physical Persons and the Tax on Societies. The method of deduction for double taxation of dividends is the most relevant measure in order to achieve such coordination from the functional point of view.

The principle of international coordination requires that the basic tendencies of the tax systems of our environment be taken into consideration. This principle is based on the internationalisation of our economy. Measures such as the non-taxation of inter-company dividends on the basis of a certain level of participation, the replacement of the reinvestment exemption by a reinvestment deferral system applicable to a wide range of assets, as the raising of the time limit for compensation for losses, are consequences of that principle.

The principle of competitiveness calls for the Corporation Tax to contribute and be consistent with the set of economic policy measures aimed at promoting competitiveness. The deduction for the performance of vocational training expenditure, the freedom of depreciation in relation to research and development activities, the deduction in the share corresponding to those activities, as well as the incentives to The internationalisation of enterprises as a result of an increase in exports is a response to that principle.

3

Major aspects of the reform

In relation to the taxable fact, the most important aspect is to abandon the classification of income as set out in Article 3 of Law 61/1978. The synthetic character of the Corporate Tax determines that such classification, unlike the Income Tax of the Physical Persons, only has relevance in very particular aspects, such as the obligation to retain and the real obligation to contribute.

The abandonment of income categories (income from economic holdings, capital yields and increases and decreases in wealth) determines a notable simplification of the tax and facilitates its most perfect It is in line with commercial rules of an accounting nature.

Please note that, except for Law 61/1978 of 27 December of the Company Tax, the previous legal texts regulating the Company Tax-recast text of 22 September 1922 and recast text of 23 December 1967-did not contain the classification of income previously mentioned.

As far as the taxable person is concerned, two are the news worthy of mention. On the one hand, the elimination of the minimum taxation and the granting to the partially exempt entities of the double taxation of dividends, and of the other, the taxation of the transparent companies which are subject to the tax on Companies without prejudice to the imputation to the partners of the positive tax base and the other elements to settle the quota, at the same time as the quota entered by the transparent company has the consideration of payment on account in relationship to the tax that taxes the partners.

As far as the tax base is concerned, the point to be highlighted is that it will be determined, in the direct estimation scheme, by correcting the accounting result set in accordance with the rules laid down in the Code. (a) in the other laws relating to that determination and in the provisions implementing them by means of the specific adjustments provided for.

The replacement of the current system of exemption by reinvestment of the proceeds obtained in the transmission of elements of the immobilized material affected to business activities by a system of deferred tax on such earnings over a period of seven years or during the period of amortisation of the goods in which the reinvestment materializes, at the choice of the taxable person. This system shall apply not only to the elements of the tangible fixed assets but also to the intangible fixed assets as well as to the assets of the fixed assets under certain circumstances.

In relation to the capital gains tax, it must be stated that this Law contains the relevant rules to exclude from the taxable base the purely monetary income obtained in the transfer of assets. of the fixed assets, taking into account the composition of the sources of financing of the company.

As for the type of tax, this Law does not offer any relevant news. The proportional and nonchalant structure of the application of the result continues, at the same time as the rate of 26 per 100 currently applicable to credit unions, mutual guarantee societies and mutual insurance companies, which will pass to be taxed at 25 per 100, a rate applicable in general to non-profit and equivalent entities.

With regard to the international double taxation deduction, this Law incorporates the changes that were made to this matter by Law 42/1994 of 30 December 1994 on Fiscal Measures, Administrative and of Social Order, incorporating certain mandates that aim to extend the possibilities of deduction. The deduction of international legal double taxation shall be calculated in relation to income from the same country, except as regards those derived from permanent establishments, and shall also be subject to tax consideration. paid abroad, in relation to international economic double taxation, paid by the entities participating in the company that distributes the dividend and by which, in turn, they are participated by those entities. A foreign tax which has not been deducted for insufficient full quota may be carried over to the following seven years.

In relation to tax incentives, this Law only regulates those which aim to promote the realization of certain activities: research and development, foreign investment oriented towards the realization of of exports, goods of cultural interest and vocational training. The general fiscal incentives related to the economic policy are not included in the article, but with respect to the same, it establishes the appropriate and concrete enablement in favor of the State General Budget Law.

As far as the special schemes are concerned, the main aspect of the reform is that they are covered by this Law, in contrast to the current situation in which the entire practice of the schemes was regulated in special laws. However, in respect of cooperatives and entities that comply with the requirements of Law 30/1994 of 24 November, of Foundations and of Tax Incentives for Private Participation in Activities of General Interest, the Law only provides for the maintenance of the validity of those rules, due, in essence, to the special features of the abovementioned entities. Likewise, the non-repeal of Law 19/1994, of June 6, of Amendment of the Economic and Fiscal Regime of the Canary Islands, which fully maintains its validity, is foreseen.

The incorporation of a set of tax incentives in favour of small-scale companies, the continuity of the leasing regime, in the terms provided for in the provision, should also be highlighted. Additional seventh of Law 26/1988 of 29 July 1988 on Discipline and Intervention of Credit Institutions, with respect to the deductible amounts according to the useful life of the object of the contract and the exemption for dividends and capital gains of foreign sources in favour of securities holding companies foreigners.

Finally, with regard to the real obligation to contribute and in relation to the personal elements, it is worth noting the notable lightening of the obligation to appoint a representative, which is limited, in addition to the assumptions in which there is a permanent establishment in Spain, in cases where certain expenses are deductible, as well as in cases where, due to the complexity of the taxpayer's operation, this is required by the Administration.

With respect to the determination of the tax base of the income obtained through permanent establishment, for those assumptions in which the operations of the permanent establishment do not close the business cycle, priority to be given to the system for determining the base, on the basis of revenue which would have been obtained from independent parties, against the system for determining the tax base, according to a percentage of expenditure incurred, a system which, However, it is preserved in a subsidiary way. This Law maintains the simplified system of calculation of the tax for those permanent establishments that carry out isolated or short-lived operations.

In terms of income obtained without permanent establishment mediation, the main innovations are focused on the types of tax; namely:

-Suppression of the reduced rate for the amounts satisfied in terms of consideration of the services of support to the management by Spanish subsidiaries to their foreign matrices, passing to tax to the general type.

-Suppression of the charge on the part of general expenses of the central house imputable to the permanent establishment.

-Establishment of a levy rate of 1,5 per 100, in the case of income from reinsurance operations.

-Establishment of a charge rate of 4 per 100 for maritime or air navigation entities.

In the case of the Special Gravamen on Property of Non-Resident Entities, the exemption of the tax, by means of identification of the holders, to the societies resident in countries with which Spain has The agreement is a double taxation agreement with information exchange clauses, provided that the holders are resident in Spain or in a country that has a convention of these characteristics with our country.

TITLE I

Nature and scope of the Tax

Article 1. Nature.

1. Corporation Tax is a direct and personal tribute to the income of companies and other legal entities in accordance with the rules of this Law.

2. The tax charge for taxable persons not resident in Spanish territory shall be made in accordance with the rules governing the actual obligation to contribute contained in Title VII of this Law.

Article 2. Spatial application scope.

1. The Company Tax will be applied 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 the Community Foral de Navarra.

Article 3. Treaties and conventions.

The provisions of the foregoing Article shall be without prejudice to the provisions of international treaties and conventions which have become part of the internal order.

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 tax transparency system, the taxable person shall be charged with the taxable amount of the positive tax bases of the entities subject to this 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 society, whether or not they have legal personality, heretics, communities of property and other entities referred to in Article 33 of the General Tax Law, shall be attributed to the members, heirs, (a) the common rules or covenants applicable in each case and, if they do not involve the tax authorities in a feisty manner, shall be attributed by equal parties.

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 corporation tax.

TITLE III

The taxable person

Article 7. Taxable persons.

1. They shall be taxable persons:

(a) Legal persons, except civil societies.

b) The investment funds, regulated in Law 46/1984, of December 26, regulatory of the Collective Investment Institutions.

c) The temporary unions of companies, regulated in Law 18/1982, of 26 May, on the Tax Regime of the Groups and Temporary Unions of Companies and the Societies of Regional Industrial Development.

d) Capital-risk funds, regulated in Royal Decree-Law 1/1986 of 14 March, of Urgent Administrative, Financial, Fiscal and Labor Measures.

e) Pension funds, regulated in Law 8/1987, of 8 June, of Pension Plans and Funds.

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 Companies and Real Estate Investment Funds and on Mortgage Securitisation Funds.

(h) The asset-securitisation funds referred to in the additional provision, fifth, 2, of Law 3/1994, of 14 April, on the adaptation of the Spanish legislation on credit to the Second Coordination Directive Banking and other changes relating to the financial system.

2. The taxable persons of this tax shall be designated abbreviated and indistinctly by the names of companies or entities throughout this Law.

Article 8. Taxable persons under a personal obligation to contribute.

1. They shall be subject to a personal obligation to contribute to the entities that have their residence in Spanish territory.

2. Taxable persons under a personal obligation to contribute 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 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 understood to have its headquarters of effective management in Spanish territory when in the radiating the direction and control of the whole of its activities.

4. The tax domicile of taxable persons resident in Spanish territory shall be that of their registered office, provided that the administrative management and management of their businesses are effectively centralised in the latter. In another case, it shall be treated to the place where such management or management is carried out.

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.

They will be exempt from the Tax:

(a) The State, the Autonomous Communities and the Local Entities.

b) the autonomous bodies of the administrative State and the autonomous bodies and autonomous entities of the same character as the Autonomous Communities and the Local Entities.

c) the autonomous bodies of the State of commercial, industrial, financial or analogous nature and the autonomous bodies and autonomous entities of the same character as the Autonomous Communities and the Local Entities.

(d) The Banco de España and the Deposit Insurance Funds.

e) Public entities entrusted with the management of Social Security.

(f) The public authorities of Article 6.5 of the recast text of the General Budget Law, adopted by Royal Decree No 1091/1988 of 23 September 1988 and the public authorities of the same kind as the Communities Autonomous and Local Entities.

g) The Institute of Spain and the Royal Academies Officers integrated in the same and the institutions of the Autonomous Communities with their own official language that have similar purposes to those of the Royal Spanish Academy.

TITLE IV

The tax base

Article 10. Concept and determination of the tax base.

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

2. The taxable amount shall be determined by the direct estimation scheme and, in the alternative, by the indirect estimate, in accordance with the provisions of the General Tax Law.

3. In the direct estimation scheme, the taxable amount shall be calculated by 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, the other laws relating to that determination and the provisions which are laid down in the development of those rules.

Article 11. Value adjustments: write-downs.

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 out in 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:

a ') 1.5, if the item has a amortization period of less than five years.

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

c ') 2.5, if the item has a amortization period equal to or greater than eight years.

The constant percentage cannot be less than 11 per 100.

Buildings, furniture and goods shall not be eligible for depreciation by means of 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) Be adjusted to a plan formulated by the taxable person and accepted by the tax administration.

e) The taxable person justifies its amount.

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

2. They may be freely amortised:

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

(b) Mining assets under the terms of Article 111.

(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 ten years, in the part of the buildings concerned with 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 tangible or intangible fixed assets of entities that have the qualification of priority associative holdings in accordance with the provisions of Law 19/1995, of 4 July, of 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 depreciation quotas 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 transfer.

When the property has been the subject of prior transfer by the transferee to the transferor, the transferee shall continue to redeem it 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 cases provided for in the preceding paragraph.

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

(a) That the goodwill has become apparent 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 laid down in this letter shall not apply to the purchase price of the goodwill paid by the person or entity transmitted when it is acquired by persons or entities not related.

The appropriations for amortisation of the goodwill which does not meet the requirements set out in (a) and (b) above shall be deductible if they are proved to be in response to an irreversible depreciation of the fund.

5. Where the requirements laid down in points (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 ten 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 points (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 said assets.

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

1. The allocations for the coverage of the reduction in the value of the editorial, phonographic and audiovisual funds of the entities carrying out the corresponding production activity will be deductible after two years since the the market for the respective productions. Before the expiry of that period, they may also be deductible if the depreciation is to be proved.

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

(a) The period of one year after the expiration of the obligation has elapsed.

(b) The debtor is declared bankrupt, a creditor contest, a suspension of payments or an incourse in a removal and waiting procedure, or similar situations.

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

(d) that the obligations have been claimed judicially or are the subject of a judicial dispute or arbitration procedure for which the solution 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:

(a) Those owed or secured by entities governed by public law.

(b) Those established by credit institutions or mutual guarantee companies.

(c) Guaranteed by real rights, domain reservation pact and right of retention, except in cases of loss or loss of warranty.

(d) Guaranteed by an insurance or credit insurance contract.

e) Those that have been the subject 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 therein. This same criterion shall apply to shares in the capital of the group's companies or associated in the terms of the commercial law.

To determine the difference referred to in the preceding paragraph, the securities shall be taken at the end of the financial year provided that they are collected on the balance sheets issued 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, or those concerning securities representing the social 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.

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 outstanding payments or payments of which the amount is not definitively established.

(b) The envelopes for the recovery of the reverse asset, taking into account the reversion conditions set out in the concession, without prejudice to the depreciation of the items that are susceptible to it, in such a way the balance of the reversal fund 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 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 must be submitted.

(d) The allocations for the coverage of extraordinary repairs of assets other than those provided for in the preceding point and of the expenditure for the 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 the resolution of the plans to be formulated will be established.

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 allocation to the provision for premiums or fees to be charged will be incompatible, for the same balances, with the allocation 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 per 100.

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 fund of technical provisions.

As provided for in this letter, it will also apply to the societies of reaffimientas in terms 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 shall also apply to the envelopes for the coverage of ancillary expenses for sales returns.

New establishment entities may also deduct the amounts referred to in the first subparagraph by fixing the percentage referred to in the first subparagraph in respect of the expenses and sales made during the periods taxes that you have passed.

3. The contributions of the promoters of pension schemes regulated in Law 8/1987 of 8 June, of Plans and Pension Funds, will be deductible. These contributions shall be charged to each participant in the relevant party.

Contributions for the coverage of similar contingencies to that of pension plans shall also be deductible, provided that the following requirements are met:

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

b) 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 shall not have the consideration of tax deductible expenses: (a) Those representing a remuneration of own funds.

(b) Derivatives of the accounting of corporate tax. They shall not be considered as revenue from such accounting.

(c) Criminal and administrative fines and penalties, the award surcharge and the fee for filing of claims-settlement and self-settlement.

d) The losses of the game.

e) Donations and liberalities.

This letter shall not be understood to include public relations expenses with customers or suppliers or those which, in accordance with the uses and customs, are carried out in respect of the staff of the undertaking or those carried out for the purposes of to promote, directly or indirectly, the sale of goods and the provision of services, or those relating to revenue.

(f) The envelopes to provisions or internal funds for the coverage of identical or similar contingencies to which they are the subject of Law 8/1987, of 8 June, 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 expenditure incurred is in response to an actual transaction or transaction.

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

2. 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 companies.

(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 production cost.

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 the same, reduction of capital with return of contributions, distribution of the premium of emission and distribution of benefits.

(d) Transmitted under merger, absorption and total or partial division.

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 used to determine this value.

3. In the cases referred to in points (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 cases referred to in points (e) and (f), the entity shall, in the tax base, integrate the difference between the normal market value of the items purchased and the book value of the delivered items.

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 shareholders ' tax base.

The same rule applies in the case of distribution of the share premium or equity 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 tax base of the members.

7. In the merger, total or partial absorption or division, the difference between the normal market value of 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. In the transfer of shares and other shares in the capital of transparent companies, the acquisition value shall be increased by the amount of the social benefits which, without effective distribution, would have been charged to the partners as income from its shares or units in the period of time between its acquisition and transfer.

In the case of companies of mere holding of goods, the value of transmission to be computed shall be at least the theoretical resulting from the last approved balance sheet, after the value of the book's book value has been replaced by the value that they would have a property tax or a normal market value if they were lower.

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

11. For the purposes of integrating into the taxable base the positive income obtained in the transfer of assets of the fixed assets, material or intangible, the amount of the depreciation shall be deducted, up to the limit of those positive income money produced since 1 January 1983, calculated in accordance with the following rules:

(a) The purchase price or cost of production of the transferred assets and the accumulated depreciation relating to them shall be multiplied by the coefficients set out in the relevant Law of General Budget of the State.

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

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

a ') In the numerator: own funds.

b ') In the denominator: the total liability minus the credit and treasury.

The determining measures of the coefficient shall be those during the time of tenure of the patrimonial element transmitted or in the five financial years

prior to the date of the transfer; if this latter period is less, at the choice of the taxable person.

This letter shall not apply when the coefficient is greater than 0,4.

Article 16. Valuation rules: linked transactions.

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 transactions 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 for the assessment of the normal market value shall be laid down.

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

a) A society and its partners.

b) A society and its directors or administrators.

c) A society and the spouses, ascendants or descendants of the partners, advisors 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 the Directive.

(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 thereof.

(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 thereof.

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 of that Regulation.

(h) A company and another company which is the first indirectly involved in at least 25 per 100 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% 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 tax on the regime of the groups of cooperative societies.

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 shall be equal to or greater than 5 per 100 or 1 per 100 if these are 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 the first chapter of the rules for the formulation of accounts Consolidated annual accounts, approved by Royal Decree 1815/1991 of 20 December 1991.

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:

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

b ') Price of resale of goods and services established by the buyer of goods, minorated on the margin normally obtained by the buyer in comparable transactions with persons or independent entities or on 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 to transform the 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, in which the project or projects to be carried out are identified, and which grants the right to use the results thereof.

(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 for the 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 the performance of such transactions. This proposal will be based on the normal market value.

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

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

In the event of significant variation of the economic circumstances existing 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 end of the resolution.

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

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.

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 that moves its residence away from it, 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 shall apply to those assets as provided for in Article 99.

(b) Those that are affected by a permanent establishment located in Spanish territory that ceases its 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 paid for by applying the normal market value or a deferral of such taxation.

3. The amounts actually paid by the persons required to retain shall be deemed to be, in any event, deducted from the amount of the withholding tax, except in the case of legally established remuneration.

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 the same shall, in its tax base, integrate the difference between that value and the value of the 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) In the case of non-depreciable assets, 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) In the case of services, in the tax period in which they are received, except that their amount is to be incorporated into a financial asset in the case of which it is due in the preceding letters.

Article 19. Temporary imputation. Accounting registration of income and expenses.

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 determined to be determined.

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 tax period to be imposed in accordance with the provisions of 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 the temporary imputation rules provided for in the preceding paragraphs.

4. In the case of transactions in instalments or with deferred price, the income shall be deemed to have been obtained proportionally as the corresponding charges are made, except that the entity 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 expiry 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 Law 8/1987 of 8 June of Plans and Pension Funds shall be imputable in the tax period in which they are pay the benefits. 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 the same.

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.

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 Ratio 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. When a convention is mediated to avoid double taxation and on condition of reciprocity, taxable persons may submit to the tax administration, in the terms of Article 16.6 of this Law, a proposal for the application of a other than the one set out in paragraph 1. The proposal will be based on the indebtedness that the taxable person would have been able to obtain under normal market conditions of persons or entities not related.

Article 21. Reinvestment of extraordinary profits.

1. The income obtained, once corrected in the amount of monetary depreciation, shall not be included in the taxable amount for the consideration of the transfer of assets of the fixed assets, material or intangible assets, and of securities representing the participation in the capital or in own funds of all kinds of entities which give a share of not less than 5% of the share capital of the institutions and which have been held for at least one year in advance, provided that the amount of the aforementioned transmissions is reinvested in any of the heritage elements before within the period from the year preceding the date of delivery or making available of the assets and the three subsequent years.

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

2. The tax administration may approve special reinvestment plans where specific circumstances warrant it.

The procedure for the approval of the plans to be formulated will be established.

3. The amount of the non-integrated income in the tax base shall be added to the same by equal shares in the tax periods completed within seven years of the end of the tax period in which the period referred to in paragraph 1 has expired, or, in the case of depreciable goods, in the tax periods during which the assets in which the reinvestment materializes, at the choice of the taxable person, are amortised.

4. The assets subject to reinvestment must remain in the assets of the taxable person, except for justified losses, until the seven-year period referred to in the preceding paragraph is met, except that their life is in accordance with the the method of depreciation of those admitted in Article 11.1, which applies, is lower. The transfer of such items before the end of the said period shall determine the integration into the taxable amount of the part of the income pending integration, except that the amount obtained is the subject of reinvestment in the terms laid down in paragraph 1.

5. If the reinvestment is not carried out within the time limit, the part of the full share corresponding to the income obtained, in addition to the interest for late payment, shall be entered in conjunction with the corresponding share of the tax period in which beat that.

Article 22. Benefit-social work of the Savings Banks.

1. The amounts paid by the Savings Banks for their results in the financing of social-welfare works, in accordance with the rules governing them, will be tax deductible.

2. The amounts allocated to the benefit-social work of the savings banks shall be at least 50 per 100, in the same financial year to which the allocation corresponds, or in the immediate following, to the carrying out 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 implementation of future allocations.

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

Article 23. Compensation of negative taxable bases.

1. The negative tax bases may be offset against the positive income of the tax periods concluded in the immediate and successive seven 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 has been acquired by a person or entity or by a set of related persons or entities, after the conclusion of the of the tax period to which the negative tax base corresponds.

(b) The persons or entities referred to in the preceding subparagraph shall have had a shareholding of less than 25 per 100 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 on the basis of which the tax base is positive.

TITLE V

Tax period and tax accrual

Article 24. 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 becomes extinct.

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

3. The tax period shall not exceed 12 months.

Article 25. Accrual of tax.

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 26. The rate of taxation.

1. The general rate of charge for taxable persons under a personal obligation to contribute shall be 35 per 100.

2. They will be taxed at the rate of 25 per 100:

(a) General insurance mutuals, social security institutions 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 Regime of Reciprocal Guarantee Societies, registered 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 foundations, establishments, institutions and non-profit associations which do not meet the requirements for the enjoyment of the tax regime laid down in Law 30/1994, of 24 November, of Foundations and Incentives Prosecutors for Private Participation in Activities of General Interest.

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

g) Unions, federations and confederations of cooperatives.

3. They shall be taxed at 20 per 100 the cooperative societies fiscally protected, except as regards the extracooperative results, which shall be taxed at the general rate.

4. The entities that meet the requirements to enjoy the tax regime established in Law 30/1994, of November 24, of Foundations and of Tax Incentives for Private Participation in Activities of General Interest will be taxed at 10 per 100. They will be taxed at the rate of 7 per 100 the real estate investment companies and the real estate investment funds regulated by Law 46/1984 of December 26, of the Collective Investment Institutions, which with the character of investment institutions Non-financial collective investment is the sole purpose of investing in buildings of an urban nature for leasing purposes, and in addition housing accounts for at least 50 per 100 of the total assets.

The application of the tax rate provided for in this paragraph shall require that the immovable property which makes up the asset of the collective investment institutions referred to in the preceding subparagraph shall not be used until they have been four years after its acquisition, except that, on an exceptional basis, the National Securities Market Commission is expressly authorized to do so.

6. They will be taxed at the rate of 1 per 100:

(a) The investment companies would be regulated by Law 46/1984 of 26 December of the Collective Investment Institutions, whose representative values of the share capital are admitted to trading on the Stock Exchange.

(b) The investment funds and the investment funds in money market assets regulated by Law 46/1984 of 26 December of the Collective Investment Institutions.

(c) Real estate investment companies and real estate investment funds regulated by Law 46/1984 of 26 December 1984, which, with the character of non-financial collective investment institutions, have as their social object exclusive of the investment in housing for its lease.

The application of the tax rate provided for in this paragraph shall require that the immovable property which makes up the asset of the collective investment institutions referred to in the preceding subparagraph shall not be used until they have been four years after its acquisition, except that, on an exceptional basis, the National Securities Market Commission is expressly authorized to do so.

d) The public nature regulation fund of the mortgage market, established in Article 25 of Law 2/1981, of March 25, of Regulation of the Mortgage Market.

7. The entities that are engaged in the investigation and exploitation of hydrocarbons in the terms laid down in Law 21/1974 of 27 June on Research and Exploitation of Hydrocarbons will be taxed at the rate of 40 per 100.

The activities relating to the refining and any other activities other than those of research, exploitation, transport, storage, purification and sale of extracted hydrocarbons will be subject to the general rate of charge.

8. They will pay the rate of 0 per 100 pension funds regulated by Law 8/1987, of 8 June, of Pension Plans and Funds.

Article 27. Full quota.

A full amount of the amount resulting from the application of the tax rate to the tax base.

CHAPTER II

Deductions to avoid double taxation

Article 28. Deduction to avoid internal double taxation: Dividends and shareholdings in profits.

1. Where dividends or shares in profits of other entities resident in Spain are included in the income of the taxable person, 50 per 100 of the full share corresponding to the tax base derived from those dividends or holdings in profits.

The tax base derived from dividends or shares in profits shall be the full amount of the dividends.

2. The deduction referred to in the preceding paragraph shall be 100 per 100 where the dividends or profit shares come from entities which are directly and indirectly involved in at least 5 per 100, provided that such participation is has been continuously held during the year preceding the day on which the profit to be distributed is payable.

The deduction will also be 100 per 100 for the perceived benefits of general insurance mutuals, social forecasting entities, mutual guarantee societies and associations.

3. The deduction provided for in this Article shall also apply in the following cases

a) Liquidation of companies. In this case, the partners shall practise the deduction on the undistributed profits which are included in the final balance sheet of the settled company.

b) Acquisition of own shares or units for redemption. In this case, the partners shall apply the deduction on undistributed profits to be applied to the depreciation of the shares or shares acquired.

c) Separation of partners. In this case, the partners shall apply the deduction on undistributed profits to be applied to the redemption of the shares or shares/units reimbursed.

(d) Dividends corresponding to profits from years prior to that in which the holding is acquired and those previously agreed upon and paid after that acquisition, provided that the said acquisition participation is held uninterruptedly for the six months following the day of its acquisition.

(e) Dissolution without settlement in merger, total division or global transfer of assets and liabilities. In this case, the acquiring institution, which would benefit from the division or the transferee, shall carry out the deduction on undistributed profits in the last balance sheet approved prior to the operations referred to above. proportion to the stake held.

The deduction will also be made on the income that the company that performs the transactions referred to in the preceding letters must integrate into the tax base in accordance with the provisions of Article 15.3 of this Law.

4. The deduction shall not be applied in respect of the following income:

(a) Those arising from the reduction of the capital or the distribution of the premium for shares/units.

(b) Those arising from the distribution of existing profits at the time of the acquisition of the holding, provided that it has been acquired from persons or entities not resident in Spanish territory, or to natural persons resident in Spanish territory linked to the acquiring institution, or to a related entity where the latter, in turn, acquired the participation of the persons or entities concerned.

This letter will not apply when any of the following circumstances are present:

a ') Dealing with an acquired participation in persons or entities not resident in Spanish territory or an entity linked to the acquiring institution which, in turn, acquired the participation of the persons concerned or institutions, when it is proved that the amount of undistributed profits has been taxed in Spain through any transfer of the share.

b ') In the case of a participation acquired from natural persons resident in Spanish territory linked to the acquiring institution or to an entity linked to the latter which, in turn, acquired the participation of those concerned natural persons, where it is proved that more than 50 per 100 of the increase in the assets obtained by those natural persons has been integrated into the taxable base of the Income Tax of the Physical Persons.

c ') The investee entity cotice in any of the official securities markets provided for in the Securities Market Act 24/1988 of 28 July 1988 and the participation has been continuously held during the the year before the day that the benefit is payable that is distributed.

d') The investee entity does not cotice in any of the official secondary securities markets provided for in the Securities Market Act 24/1988 of 28 July 1988, where the amount of the holding is less than 5 per 100 of the social capital and participation has been continuously held during the year preceding the day on which the profit to be distributed is payable.

e ') Profit sharing has not determined a decrease in the value of the share. For these purposes, the value of the contribution shall be the price paid for its acquisition, including, where applicable, the agreed and unpaid dividends at the time of the acquisition.

(c) 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, or the transfer of the issue premium to reserves, or a the contribution of the partners to replenish the assets, up to the amount of the reduction, transfer or contribution.

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

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

Article 29. Deduction to avoid international double taxation: tax borne by the taxable person.

1. In the case of a personal obligation to contribute, where the taxable person's taxable income is made up of income obtained and taxed abroad is deducted from the full quota, the lower of the following two quantities:

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

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

As a convention to avoid double taxation, the deduction may not exceed the tax corresponding to it.

(b) The amount of the full quota that in Spain would be payable for the aforementioned 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 them.

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

Article 30. Deduction to avoid international double taxation: dividends and profit shares.

1. In the case of a personal obligation to contribute, 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 that entity shall be deducted (a) in respect of the profits from which the 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 the direct or indirect participation in the capital of the non-resident entity to be at least 5 per 100, and that the same has been held uninterruptedly during the the year before the day on which the profit to be distributed is payable.

In the case of distribution of reserves, the designation contained in the social agreement will 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 profits from which the dividends are paid provided that such shares are not less than 5 per 100 and satisfy the requirement referred to in the preceding paragraph in respect of the holding 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 any shortfall in full quota may be deducted in the tax periods concluded in the immediate and successive seven 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. the depreciation is made manifest, except that the amount of the abovementioned benefits has been taxed in Spain through any transfer of the share.

The amount of the depreciation shall be that corresponding to the profits earned by the entity that distributes them prior to the acquisition of the stake.

CHAPTER III

Bonuses

Article 31. Bonus for rent obtained in Ceuta and Melilla.

1. It will have a bonus of 50 per 100 the part of the full quota corresponding to the income obtained by entities that operate effectively and materially in Ceuta, Melilla or its 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 by establishment or branch.

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

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

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 on them 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 per 100 of the total income to the territory in which the head office is effective.

(b) A 40 per 100 of this income shall be distributed in proportion to the volume of landings of catches in Ceuta and Melilla and in different territory.

Exports will be charged to the territory in which it radiating the effective address.

(c) The remaining 40 per 100, in proportion to the book value of vessels as registered in Ceuta and Melilla and in different territories.

The percentage provided for in point (c) shall apply only where the entity concerned has the headquarters of effective management in Ceuta and Melilla. In another case, this percentage would be greater than that of point (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 32. 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, of books, fasciculties and elements whose content is not less than 99 per 100 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 34 and 35 of this Law.

The items on which the reinvestment materializes shall not enjoy the deduction provided for in Articles 34 and 35.

The part of the full quota resulting 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 have an allowance of 99 per 100 for the part of the full share corresponding to the income derived from the provision of the services referred to in Article 25 (2) and Article 36 (1) (a), (b) and (c) of the Law. 7/1985, of 2 April, of Bases of the Local Regime, of powers of the local territorial, municipal and provincial entities, except when they are operated by the system of mixed enterprise or private equity.

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 realization

of certain activities

Article 33. Deduction for carrying out research and development activities.

1. The carrying out of research and development activities shall entitle a deduction of the full quota of 20 per 100 of the expenditure incurred in the tax period for this purpose.

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. in the preceding paragraph up to that average, and 40 per 100 over the excess in respect of the same.

The amount of research and development expenditure referred to in the previous two paragraphs shall be reduced by 65 per 100 of the grants received for the promotion of such activities and imputable as income in the tax period.

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

The design and development of the sample for product launches will also be considered as research activity.

3. The following shall not be considered as research and development activities:

a) Engineering supervision, including in the initial stages of production, quality control and product normalization, the solution of technical problems of disrupted production processes, routine efforts to improve the quality of materials, products, processes or systems, the adaptation of an existing system or production process to the specific requirements imposed by a customer, the periodic or seasonal changes in the design of materials existing products, equipment, processes and systems of the production process, and the planning of the productive activity.

(b) Legal and administrative services, including those relating to industrial property or contracts, business and operations related to technology, teaching, training and training of staff, studies of market and feasibility plans, the development of programmes for electronic equipment, prospecting in the field of social sciences and the exploitation and research of minerals and hydrocarbons.

c) Any other activity that does not incorporate new technologies, even if they are process design, systems, tools, utensils, assemblies, moulds and dies, the construction of all types of installations and equipment included design engineering, installation and assembly of equipment and installations or the creation of materials or products.

The activities referred to in the preceding letters may benefit from the deduction when they are part of a research and development project that meets the requirements to be able to enjoy the tax incentive.

4. Research and development costs shall be considered to be incurred by the taxable person as soon as they are directly related to the research and development activity carried out in Spain and have actually been applied to the performance of the The same is specifically identified by projects.

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

Article 34. 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 per 100 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 per 100 of the participation is reached, 25 per 100 of the total investment made in the same and in the two preceding tax periods shall be deducted.

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

b) 25 per 100 of the amount satisfied in terms of propaganda and advertising costs of multi-annual projection for product launches, opening and prospecting of markets abroad and of concurrency to 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 State or territory which is regulated as a tax haven.

3. The basis of the deduction shall be reduced by 65 per 100 of the grants received for the purpose of the investment and expenditure referred to in paragraph 1.

4. The deduction provided for in this Article may not exceed 15 per 100 of the income or 4 per 100 of the income corresponding to all the export activities of goods or services and the hiring of tourist services in Spain.

Non-deducted amounts may be applied in accordance with the same limit in the settlement of the tax periods concluded in the immediate and successive five years.

The calculation of the time limit for the application of the deduction may be deferred until the first financial year in which, within the period of limitation, positive results are produced, the income derived from the export activities of goods or services and the provision of tourist services in Spain is positive.

Article 35. Deduction for investments in goods of cultural interest, film productions and book editing.

1. Investments in goods of cultural interest shall entitle them to deduct from the full 10 per 100 of the investments actually made in goods which are entered in the General Register of Goods of Cultural Interest, in accordance with the provisions of article 69.2 of Law 16/1985 of 25 June of the Spanish Historical Heritage, provided that the property remains in the holder's estate for a period of not less than three years. For these purposes, eligible expenditure shall be regarded as investments corresponding to the amount of the amounts intended for the acquisition, preservation, repair, restoration, dissemination and exposure of goods declared of cultural interest. registered in the Register.

2. Investments in Spanish cinematographic or audiovisual productions that allow the production of a physical medium, prior to its serial industrial production, shall be entitled to a deduction of 10 per 100.

3. Investments in the publishing of books that allow the production of a physical medium, prior to its serial industrial production, will give the right to a deduction of 5 per 100.

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

Article 36. Deduction for professional training costs.

1. The completion of vocational training activities shall entitle a deduction of the full quota of 5 per 100 of the expenditure incurred in the tax period, which shall be reduced by 65 per 100 of the amount of the grants received to 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 to that mean, and the 10 per 100 over the excess over the same.

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 construed as expenditure of professional training which, in accordance with the provisions of Law 18/1991 of 6 June of the Income Tax of the Physical Persons, have the consideration of income of the

personal work.

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

1. The deductions provided for in this Chapter may not exceed 35 per 100 of the full quota, which is reduced by the deductions to avoid double taxation at internal and international level and bonuses.

The amounts not deducted may be applied, in accordance with the same limit, in the liquidations of the tax periods concluded in the immediate and successive five 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: 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.

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

3. The assets assigned to the deductions provided for in the preceding Articles shall remain in operation for five years or during their lifetime if they are lower.

CHAPTER V

Fractional payment

Article 38. The split payment.

1. In the first 20 calendar days of the months of April, October and December, taxable persons under a personal obligation to contribute and taxable persons with a real obligation to contribute by way of permanent establishment must make a payment of a split payment on account of the liquidation corresponding to the tax period which is in progress on the first day of each of the months indicated.

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

When the last completed tax period is shorter than the year, the proportional share of the previous tax period shall also be taken into account until a period of twelve months is completed.

3. Split payments may also be made, at the option of the taxable person, on the part of the taxable amount of the period of the three, nine or eleven 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 before each of the periods referred to in the preceding paragraph.

In order 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 in which it is to have effect.

The taxable person will be bound by this mode of the split payment in respect of the payments for the same tax period.

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 laid down in the General Budget Law of the State.

In the form provided for in the preceding paragraph, the resulting quota shall be deducted from the withholding tax and the revenue from the taxable person, as well as the payments made in the form corresponding to the tax period.

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

CHAPTER VI

Deduction from payments to account

Article 39. Deduction of deductions, income on account and payments broken down.

It will be full quota deductibles:

a) Reholds on account.

b) Income on account.

c) Fracked payments.

(d) The fee paid by the companies subject to the tax transparency regime.

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

Actual obligation to contribute

CHAPTER I

Personal items

Article 40. Taxable person.

Entities that are not resident in Spanish territory pursuant to Article 8 of this Law are subject to real obligation.

Article 41. Responsible.

1. The payer of income, accrued without permanent establishment mediation, by non-resident taxable persons, or the depositary or manager of the goods or rights of non-resident taxable persons, not affected by an establishment (a) permanent, shall be jointly and severally liable for the income of the tax debts corresponding to the income which he has paid or the income of the goods or rights the deposit or management of which is entrusted to him.

2. A person or entity shall not be deemed to pay a performance when it is limited to a simple payment mediation. The term 'payment' means the payment of an amount, on behalf and order of a third party.

3. In the case of the payer of accrued income without permanent establishment mediation by non-resident taxable persons, the liability for the income of the tax liability shall be payable without the need for the act Prior administrative referral of liability provided for in Article 37 (4) of the General Tax Law, which may, for these purposes, be understood as the actions of the tax administration directly with the person responsible.

In the case of the depositary or manager of the assets or rights of non-resident taxable persons not affected by a permanent establishment, joint and several liability shall be required in accordance with the terms laid down in paragraph 4 of this Article. Article 37 of the General Tax Law.

Article 42. Representatives of non-residents in Spain.

1. Non-resident taxable persons in Spanish territory shall be required to appoint a natural or legal person with residence in Spain, to represent them before the tax administration in relation to their obligations under this Tax, where they operate through a permanent establishment, in the cases referred to in Article 56.2 of this Law, or where, due to the amount and characteristics of the income obtained in Spanish territory by the taxable person, so requires the tax administration.

The taxable person or his representative shall be obliged to inform the tax administration of the appointment, duly accredited, within two months of the date of the appointment.

The designation shall be communicated to the Delegation of the State Administration of Tax Administration in which they have submitted the declaration for the Tax, accompanying the indicated communication the express acceptance of the representative.

2. Representatives of permanent establishments who appear as such in the Trade Register or, failing that, who are entitled to contract on behalf of the permanent establishments shall be considered. Where such persons are not resident in Spanish territory, the provisions of the preceding paragraph shall apply.

3. Failure to comply with the obligations referred to in paragraph 1 shall constitute a simple tax breach punishable by a fine of 25,000 to 1,000,000 pesetas.

Article 43. Tax domicile.

Liabilities resident abroad will have their tax domicile, for the purpose of fulfilling their tax obligations in Spain:

(a) When they operate in Spain through permanent establishment, in the place where the effective administrative management and the management of their business in Spain, apply them, as soon as they are relevant, the rules concerning the entities resident in Spanish territory.

(b) In the case of real estate income in the tax domicile of the representative and, failing that, in the place where the property is situated.

(c) In the other cases, the tax domicile of the representative or, failing that, of the person in charge.

CHAPTER II

Taxable and forms of subjection

Article 44. Income subject to actual obligation.

1. Taxable persons under a real obligation shall be subject to the income tax which, in accordance with the following Article, is considered to be obtained or produced in Spanish territory.

2. They make up the income of the taxable person, the income and the increases in assets.

Article 45. Income obtained in Spanish territory.

1. The following shall be considered as income obtained or produced in Spanish territory:

(a) The income of economic holdings carried out by permanent establishment located in Spanish territory.

An entity shall be deemed to be operating on a permanent basis in Spanish territory, where, by any title, it has, on a continuous or regular basis, facilities or workplaces of any kind, in which he carries out all or part of his business, or acts in him by means of an agent authorized to hire, in the name and on behalf of the non-resident entity, who has such powers.

In particular, it will be understood that the headquarters, branches, offices, factories, workshops, warehouses, shops or other establishments, mines, oil wells are permanent establishment. or gas, quarries, agricultural, forestry or livestock holdings or any other place of exploration or extraction of natural resources, and construction, installation or assembly works of a duration exceeding 12 months.

(b) The income of economic holdings carried out on Spanish territory without permanent establishment mediation. However, yields resulting from the installation or assembly of machinery or installations imported into Spanish territory shall not be considered to have been obtained or produced in Spanish territory where the installation or assembly is carried out by the the supplier of the machinery or installations and the amount of the equipment or installations does not exceed 20 per 100 of the purchase price of the imported items.

(c) Yields derived from services, such as the performance of studies, projects, technical assistance, management support, as well as professional services, when the performance is performed or used in Spanish territory.

Benefits that serve business or professional activities carried out on Spanish territory or relate to goods located therein shall be understood to be used in Spanish territory.

(d) Yields derived, directly or indirectly, from personal action, in Spanish territory, by artists and sportspersons, or from any other activity related to such performance, attributed to entities.

e) dividends and other income derived from participation in the own funds of entities resident in Spain.

(f) Interest, royalties and other income from capital, furnished, satisfied by persons or entities, resident in Spanish territory or by permanent establishments located therein, or to pay benefits of capital used in Spanish territory.

(g) Yields derived, directly or indirectly, from real estate located in Spanish territory or from rights relating thereto.

h) Equity increases derived from securities issued by persons or entities, resident in Spanish territory.

(i) increases in assets derived from immovable property located in Spanish territory or from rights to be fulfilled or exercised in that territory. In particular they are considered to be included in this letter:

(a ') Equity increases arising from rights or participations in an entity, resident or not, the asset of which is primarily made up of real estate located in Spanish territory.

b ') Equity increases arising from the transfer of rights or shares in an entity, whether resident or not, which attribute to its holder the right to enjoy immovable property located in Spanish territory.

(j) increases in assets derived from other movable property located in Spanish territory or from rights to be fulfilled or exercised in that territory.

2. Without prejudice to the provisions of the preceding paragraph of this Article, they shall also be understood to be obtained or produced in Spanish territory:

a) Yields satisfied by:

a ') Individual or professional entrepreneurs, resident in Spanish territory.

b ') Legal persons or entities resident in that territory.

c ') Permanent institutions located in Spanish territory.

(b) The provisions of the preceding subparagraph shall not apply in the case of the following returns:

(a ') Satisfied by reason of economic holdings, other than those referred to in (b) below, where those holdings are made entirely abroad. In particular, the content of international goods, including mediation fees and other ancillary and related expenses, shall be deemed to be included in this paragraph.

b ') Satisfied by reason of the services or benefits referred to in point (c) of paragraph 1 of this Article, where such services or services are made entirely outside the Spanish territory and are directly linked to the business or professional activities of the payer carried out abroad, unless they relate to goods located in Spanish territory.

c ') Satisfied entities not resident by permanent establishments located abroad, under the same conditions, when the corresponding benefits are directly linked to the activity of the permanent establishment abroad.

Article 46. Exemption assumptions.

1. The following income shall be exempt:

(a) Interest and increases in assets derived from movable property, obtained without permanent establishment mediation, by entities resident in another Member State of the European Union.

The provisions of the preceding paragraph shall not apply to increases in assets arising from the transfer of shares, units or other rights in an entity in the following cases:

a ') When the asset of that entity consists primarily, directly or indirectly, in real estate located in Spanish territory.

b ') When, at some point during the 12-month period preceding the transmission, the taxable person has participated, directly or indirectly, in at least 25 per 100 of the capital or assets of that entity.

(b) Interest and increases in assets derived from the Public Debt, obtained by non-resident entities without mediation of permanent establishment in Spain.

In no case shall the provisions of points (a) and (b) apply to the interests or increases of assets obtained through the countries or territories determined by their nature as tax havens.

(c) Equity income and equity increases derived from securities issued in Spain by non-resident natural or legal persons without permanent establishment mediation, whichever is the place of residence of financial institutions acting as payment agents or in the form of the issuance or transfer of securities.

However, when the holder of the securities is a resident entity or a permanent establishment in Spain, the income or equity increases referred to in the preceding paragraph shall be subject to this Tax and, in where applicable, to the withholding tax system, which shall be practised by the resident financial institution acting as the depositary of the securities.

(d) The income of non-resident accounts, which are satisfied to non-resident entities on Spanish territory, unless the payment is made to a permanent establishment located in Spain, by the Banco de España, Banks, Savings banks, Rural Banks, Credit Unions and other registered entities.

e) the income or increase of assets obtained in Spanish territory, without any permanent establishment in the territory of Spain, from the lease, sale or transfer of containers or of vessels and aircraft; Bare hull, used in international sea or air navigation.

(f) The profits distributed by subsidiary companies resident in Spain to their parent companies resident in other Member States of the European Union, where the following conditions are met:

(a ') that both companies are subject and not exempt from any of the taxes on the profits of legal entities in the Member States of the European Union, as referred to in Article 2 (c) of Directive 90 /435/EEC, the Council of 23 July 1990 on the arrangements applicable to parent companies and subsidiaries of different Member States.

b ') That the distribution of the profit is not a consequence of the liquidation of the subsidiary.

c ') That the two companies are in one of the forms set out in the Annex to Council Directive 90 /435/EEC of 23 July 1990 on the arrangements applicable to parent companies and subsidiaries of Member States different.

It shall have the consideration of the parent company of that entity which holds in the capital of another company a direct participation of at least 25 per 100. The latter entity shall have the consideration of a subsidiary. The said participation must have been kept uninterruptedly during the year preceding the day on which the profit to be distributed is payable.

Residence shall be determined in accordance with the law of the Member State concerned, without prejudice to the provisions of the Conventions to avoid double taxation.

However, as previously provided for, the Ministry of Economy and Finance may declare, subject to reciprocity, that the provisions of this letter apply to the parent companies and to the subsidiary companies which review a legal form different from those set out in the Annex to the Directive.

This letter shall not apply where the majority of the voting rights of the parent company are held directly or indirectly by natural or legal persons who do not reside in the Member States of the Union. European, except where it effectively carries out a business activity directly related to the business activity carried out by the subsidiary company or has as its object the management and management of the subsidiary by the appropriate organisation of material and personal means or evidence which has been constituted for reasons (a) valid economic conditions and not to unduly enjoy the scheme provided for in this letter.

This letter shall also not apply where the parent company has its tax residence in a country or territory that is regulated as a tax haven.

2. The Minister for Economic Affairs and Finance may declare on condition of reciprocity, the exemption of the income corresponding to maritime or air navigation entities resident abroad whose vessels or aircraft touch Spanish territory, although they have in this consignors or agents.

Article 47. Forms of subjection to the actual obligation.

1. Non-resident entities which obtain income by permanent establishment situated in Spanish territory shall pay tribute to all the income attributable to that establishment, whatever the place where the income was obtained or produced, in accordance with the general rules of the tax, with the exception of the following Articles.

2. Where they obtain income without permanent establishment mediation, they shall be taxed separately for each total or partial accrual of income under tax, as provided for in Articles 56 et seq. of this Law.

For these purposes, such income shall be deemed to be accrued:

(a) In the case of yields, where they are payable or at the date of recovery if they are earlier.

b) Dealing with asset increases, when the estate alteration takes place.

3. Except as provided for in the case of income attributable to the permanent establishment, the income obtained in Spain by non-resident entities on Spanish territory shall be subject to a charge for this tax in total separation from each other, without possible compensation between them.

4. The separate charge of the income obtained in Spanish territory by a non-resident entity does not, in any way, limit the liability for the same in respect of the debts and tax obligations payable in Spain, in relation to any of them.

CHAPTER III

Rents obtained by permanent establishment

Article 48. Income attributable to permanent establishments.

1. The following concepts are composed of the income attributable to the permanent establishment:

(a) The income of the economic holdings developed by that permanent establishment.

(b) The income derived from the transfer of property assets to the same.

c) The property increases or decreases derived from the property assets affected by the permanent establishment.

They will be considered to be heritage elements affected by the permanent establishment, those linked functionally to the development of the activity that constitutes their object.

2. In cases of re-export of goods previously imported by the same non-resident entity, it shall be considered as:

(a) that no property alteration has occurred, without prejudice to the treatment applicable to the payments made for the period of use, in the case of temporarily imported fixed assets.

b) That there has been a property alteration, in the case of assets acquired for use in the activities carried out by a permanent establishment.

(c) There has been a positive or negative return on economic exploitation, in the case of items that have the consideration of stocks.

Article 49. Diversity of permanent establishments.

1. Where a non-resident entity has different centres of activity in Spanish territory, these centres shall be deemed to constitute different permanent establishments and shall be taxed separately when the following are present: circumstances:

a) That they perform clearly differentiable activities.

b) That the management of the same is carried out separately.

2. In no case shall the compensation of income between different permanent establishments be possible.

Article 50. Determination of the tax base.

1. The taxable base of the permanent establishment shall be determined in accordance with the provisions of the general scheme, without prejudice to the following points:

(a) For the determination of the tax base, the payments which the permanent establishment makes to the central house or to any of its permanent establishments in the form of royalties, interest, commissions, in the form of a permanent establishment shall not be deductible. consideration of technical assistance or the use of other goods or rights.

Notwithstanding the foregoing, interest paid by the permanent establishments of foreign banks to their central house or other permanent establishments, for the performance of their activity, shall be deductible.

(b) For the determination of the tax base, the reasonable portion of the management and general management costs, which corresponds to the permanent establishment, shall be deductible provided that the following requirements are met:

a ') Reflected in the accounting statements.

b ') Constancy, by means of information submitted with the declaration, of the amounts, criteria and delivery modules.

c ') Rationality and continuity of the imputation criteria adopted.

The requirement of rationality of the imputation criteria shall be understood when they are based on the use of factors made by the permanent establishment and the total cost of such factors.

In those cases where it is not possible to use the criterion set out in the preceding paragraph, the imputation may be carried out on the basis of the relationship in which one of the following measures is found:

a ') Business figure.

b ') Direct costs and expenses.

c ') Average investment in items of tangible fixed assets affected economic holdings.

d') Total average investment in items affected by economic holdings.

(c) In no case shall amounts corresponding to the cost of the capital of the entity affected, directly or indirectly, be imputable to the permanent establishment.

2. The operations carried out by the permanent establishment with the central house of the non-resident entity or with other permanent establishments thereof, are already located in Spanish territory or abroad, or with other companies to it (a) they shall be assessed in accordance with the provisions of Article 16 of this Law.

3. The permanent establishment may compensate its negative tax bases in accordance with the provisions of Article 23 of this Law.

4. Where the operations carried out in Spain by a permanent establishment do not close a complete business cycle determining income in Spain, the latter being ended by the non-resident entity or by one or more of its establishments permanent, without any consideration, other than the coverage of the expenses incurred by the permanent establishment and without any or all of the products or services being allocated to third parties other than the entity itself resident, the following rules apply:

(a) The income and expenses of the permanent establishment shall be valued in accordance with the rules of Article 16 of this Law, the tax liability being determined in accordance with the rules applicable to the general scheme and the provisions of the previous to this article.

b) Subsidaily the following rules apply:

(a ') The tax base shall be determined by applying the percentage which the Ministry of Economy and Finance points to the total of the expenditure incurred in the development of the activity constituting the object of the permanent establishment. This amount shall be added to the total amount of ancillary revenue, such as interest or royalties, which do not constitute its business object, as well as increases and decreases in the assets derived from the assets affections to the establishment.

For the purposes of this rule, the expenses of the permanent establishment shall be computed by its full amount, without being admissible in any way or compensation.

b ') The full quota shall be determined by applying the general charge rate on the basis of the taxable amount, without applying the deductions and allowances provided for in the general scheme.

5. For permanent establishments whose activity in Spanish territory consists of, works of construction, installation or assembly for which the duration exceeds 12 months, or seasonal or seasonal economic holdings, or activities of Exploration of natural resources, the Tax will be required according to the following rules:

(a) As provided for in the case of income from economic holdings obtained in Spanish territory without permanent establishment mediation in Articles 56.2 and 57, the following rules apply to these effects:

a ') The rules on accrual and the presentation of statements relating to income obtained without permanent establishment mediation.

b ') The taxable persons shall be relieved of the fulfilment of the general accounting and registration obligations.

However, they must keep at the disposal of the tax administration the supporting documents of the income obtained, and payments made for this tax, as well as, where appropriate, the deductions and the income to account practiced and statements relating to them.

Also, they will be obliged to register in the index of entities and declare their tax domicile in Spanish territory, as well as the changes that they may experience.

(b) However, the non-resident entity may opt for the application of the general scheme provided for in the preceding articles for permanent establishments. In any event, the application of the system referred to in point (a) above shall be compulsory where the permanent establishment does not have separate accounts for the income obtained in Spanish territory. The option must be demonstrated at the time of applying for the entry in the index of entities.

(c) Not applicable, in any event, to non-resident entities following the system provided for in point (a) above, the rules laid down in the Conventions to avoid double taxation for income assumptions obtained without permanent establishment mediation.

Article 51. Tax liability.

1. The rate of charge of 35 per 100 shall be applied to the taxable amount determined in accordance with the preceding Article, except where the activity of the permanent establishment is the activity of research and exploitation of hydrocarbons, in which case the lien will be 40 per 100.

2. In addition, where the income obtained is transferred abroad, a supplementary levy, at the rate provided for in Article 57 (1) (a) of this Law, shall be payable on the amounts transferred from the income of the permanent establishment, including payments referred to in Article 50.1 (a) of this Law.

The declaration and entry of such additional charge shall be made in the form and time limits established for the income obtained without the mediation of permanent establishment.

3. Supplementary taxation shall not apply, on condition of reciprocity, to income obtained in Spanish territory through permanent establishments, by entities having their tax residence in another Member State of the European Union.

4. In the full quota of the tax may be applied:

(a) The bonuses and deductions, as referred to in Articles 28 and 31 to 37 of this Law.

(b) The amount of the deductions that would have been made to the permanent establishment, the income on account and the split payments that had been made.

5. The various deductions and allowances will be made in the light of the circumstances in the permanent establishment, without the fact that they are transferred from other different entities of the same entity into Spanish territory.

6. Where deductions, split payments and income on account exceed the amount resulting from the full amount of the tax on deductions from the concepts referred to in paragraph 4 (a), the tax administration proceed to return, ex officio, the excess.

Article 52. Tax period.

1. The tax period shall coincide with the economic year declared by the permanent establishment, without exceeding 12 months.

Where no other has been declared, the tax period shall be understood as referring to the calendar year.

The communication of the tax period shall be made at the time when the first declaration is to be filed for this Tax, while it is not expressly modified.

2. The tax period shall be deemed to be terminated, where the permanent establishment ceases its business or otherwise takes effect on the investment in its day in respect of the permanent establishment, as well as in the cases in which it is established. the transfer of the permanent establishment to another entity, and those in which the central house transfers its residence.

3. The tax will become payable on the last day of the tax period.

Article 53. Tax return.

1. Permanent establishments shall be obliged to make a declaration for this tax in the form, place and time limits fixed for taxable persons under a personal obligation to contribute.

2. Where the cases referred to in Article 52.2 of this Law occur, the time limit for filing shall be that provided for in general for the income obtained without permanent establishment as from the date on which the event occurs, without the index of institutions may be allowed to be lowered as long as no such declaration has been made.

Article 54. Accounting, registration and formal obligations.

1. Permanent establishments shall be obliged to keep separate accounts, covering the operations they carry out and the assets which they have affected.

2. They shall also be required to comply with the remaining accounting, registration or formal obligations applicable to taxable persons under personal obligation.

Article 55. Payments on account.

1. Permanent establishments shall be subject to the general scheme of payments on account of the income they receive.

2. They shall also be required to hold withholding or income on the same terms as institutions subject to personal obligation.

CHAPTER IV

Rents obtained without permanent establishment mediation

Article 56. Tax base corresponding to the income obtained without permanent establishment mediation.

1. As a general rule, the taxable amount corresponding to the income which the entities subject to a real obligation obtain without permanent establishment mediation shall be constituted by the full amount due.

2. In the case of services, technical assistance, installation or assembly works derived from engineering contracts and, in general, from economic holdings carried out in Spain without permanent establishment mediation, for the Determination of the taxable amount will be deductible from the total revenue and the expenditure of personnel and supplies of materials under the conditions laid down in regulation.

3. In the case of yields derived from reinsurance transactions, the taxable amount shall be the amounts of the premiums transferred, in reinsurance, to the non-resident reinsurer.

4. In the case of equity increases, the tax base shall be determined by difference between the value of the transmission of the item concerned and its acquisition value. Where the increase in equity comes from a profit acquisition, the amount shall be the normal market value of the item acquired.

5. The rules on compensation for losses shall not apply to non-resident entities in Spanish territory who obtain income in the territory without permanent establishment mediation.

Article 57. Tax quota.

1. The taxable amount determined in accordance with the preceding Article shall apply the following types of tax:

a) With a general character, 25 per 100.

(b) In the case of yields derived from reinsurance transactions, 1,5 per 100.

c) 4 per 100 in the case of maritime or air navigation entities resident abroad, whose vessels or aircraft touch Spanish territory.

d) In the case of equity increases, 35 per 100.

2. In the case of transfers of immovable property located in Spain by non-resident taxable persons acting without permanent establishment, the acquirer shall be obliged to retain and enter the 10 per 100, or to make the entry into account of the agreed consideration, as a payment on account of the tax corresponding to those.

The above paragraph shall not apply when the owner of the property transmitted was a natural person and the property had been acquired more than twenty years before the date of transmission without which has been the subject of improvements during that time.

If the withholding or income referred to above has not been entered, the goods transmitted will be affected by the payment of the tax.

Article 58. Deductions.

The fee will only be deducted from withholding and income on account that would have been practiced on the taxable person's income.

Article 59. Accrual.

The tax shall be payable when, in accordance with the provisions of Article 47.2 of this Law, the corresponding income is payable.

Article 60. Declaration.

1. Non-resident entities in Spanish territory who obtain income from it without permanent establishment mediation shall be obliged to make a declaration for this tax in the form, place and time-limits to be established.

2. The debt declaration and debt securities defined in Article 41 of this Law may also be declared and entered into the debt.

Article 61. Formal obligations.

1. Non-resident entities in Spanish territory which obtain income from it without permanent establishment mediation shall not be required to comply with the obligations of a general accounting, registration or formal establishment for the purposes of this tax, except as provided for in the following paragraphs.

2. Taxable persons who obtain income from those referred to in Article 56.2 of this Law shall be obliged to carry the corresponding records of income and expenditure.

3. Where they have been subject to withholding tax, they shall be obliged to register in the index of institutions and to keep records of revenue and expenditure.

Article 62. Holds.

The taxable persons under real obligation operating in Spain without permanent establishment mediation will be obliged to practice the withholding and income in respect of the income of the work they satisfy, thus in respect of other yields subject to withholding tax, which constitute deductible expenditure for the purpose of obtaining the income referred to in Article 56.2 of this Law.

Article 63. Extra rules.

The rules contained in the previous titles will be applicable to the non-regulation expressly.

Article 64. Special Tax on Property of Non-Resident Entities.

1. Non-resident entities that own or hold in Spain for any title real estate or real rights of enjoyment or enjoyment thereon shall be subject to the Company Tax by means of a special charge to be paid at 31 December of each year and shall be entered in the following January.

2. The taxable amount of the special charge shall be the cadastral value of the immovable property. Where there is no cadastral value, the value determined shall be used in accordance with the provisions applicable for the purposes of the Heritage Tax.

3. The rate of the special charge shall be 3 per 100.

4. The lack of self-validation and entry by the taxable persons of the special charge within the time limit laid down in paragraph 1 shall give rise to the enforceability of the award procedure on immovable property, being sufficient for its initiation of the certification issued by the Tax Administration of the expiration of the voluntary period of entry without having entered the tax and the amount of the tax.

5. The Special Tax on Real Estate shall not be payable to:

(a) States and foreign public institutions and international bodies.

(b) Entities entitled to the application of a convention to avoid international double taxation, where the applicable convention contains an exchange of information clause, and provided that the natural persons who last they have, directly or indirectly, the capital or assets of the institution, are resident in Spanish territory or are entitled to the application of an agreement to avoid double taxation containing the exchange clause information.

For the application of the exemption referred to in this letter, non-resident entities shall be required to submit a statement relating to the properties located in the Spanish territory they hold, as well as the the last physical holding of its capital or assets, stating the tax residence, nationality and domicile of the institution itself and of such natural persons. To the declaration, which must be presented in the Administration or Delegation of the State Administration of Tax Administration in whose territorial scope the building is situated, the certification of the tax residence of the entity and of the final holders of natural persons, issued by the competent tax authorities of the State concerned. Such a declaration shall be submitted within the same time limit for the entry of the tax.

(c) Entities that develop in Spain, on a continuous or regular basis, economic holdings that are differentiable from the simple holding or lease of the real estate.

(d) Companies that are listed on secondary markets of officially recognised securities.

e) Non-profit entities of a beneficial or cultural nature, recognized under the law of a State that has an agreement with Spain to avoid double taxation with an exchange clause information, provided that the buildings are used in the exercise of the activities that constitute their object.

6. In cases where a non-resident entity participates in the ownership of the goods or rights together with other persons or entities, the Special Gravamen on Real Estate of non-resident entities in Spain shall be payable by the party. the value of the goods or rights corresponding to their participation.

Where the conditions of residence of the partners, members or beneficiaries of the non-resident entity referred to in paragraph 5 (b) are partially met, the share of the Special Gravamen on Real Estate Non-resident entities in Spain shall be reduced by the appropriate proportion.

7. The share of the Special Gravamen on Non-Resident Goods of non-resident entities shall be considered as deductible expenditure for the purposes of determining the tax base of the Company Tax, which, if appropriate, corresponds to the previous articles of this title.

TITLE VIII

Special Tax Regimes

CHAPTER I

Special tax regimes in particular

Article 65. 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 interest groups, Spanish

and European

Article 66. Grouping of Spanish economic interest.

Economic interest groups governed by Law 12/1991 of 29 April of Economic Interest Groups will be taxed in tax transparency with the following exceptions:

(a) Those entities shall not be taxed by the Company Tax on the basis of the taxable amount corresponding to the members resident on Spanish territory, who shall charge those members.

(b) No limitations on the imputation of negative taxable bases shall apply.

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

Article 67. European grouping of economic interest.

1. European groupings of economic interest covered by Regulation 2137/1985 of 25 July 1985 of the Council of the European Communities shall be taxed in tax transparency with the following exceptions:

(a) Those entities shall not be taxed by the Company Tax.

(b) No limitations on the imputation of negative taxable bases shall apply.

2. The partners of European economic interest groups resident in Spanish territory shall be taxed as follows:

(a) If they are resident in Spanish territory, they shall integrate into the tax base of the Company Tax or the Income Tax of the Physical Persons, as appropriate, the corresponding portion of the taxable, positive or negative, determined in the pool.

(b) If they are not resident in Spanish territory, they shall be subject to a real obligation to contribute only if, in accordance with the provisions of Article 45 of this Law or in the respective Convention to avoid double taxation (a) the fact that the activity carried out by the group itself determines the existence of a permanent establishment in that territory.

3. The partners of European economic interest groups not resident in Spanish territory shall be taxed as follows:

(a) If they are resident in Spanish territory, they shall integrate into the tax base of the Company Tax or the Income Tax of the Physical Persons, as appropriate, the corresponding portion of 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 determined the existence of a permanent establishment abroad, the rules provided for in this Law or in the respective one shall apply. convention to avoid international double taxation.

(b) If they are not resident in Spanish territory, they shall be subject to a real obligation to contribute only if, in accordance with the provisions of Article 45 of this Law or in the respective Convention to avoid double taxation (i) the fact that the activity carried out by the group itself determines the existence of a permanent establishment in that territory.

4. The profits attributed to non-resident partners in Spanish territory which have been subject to the actual obligation to contribute will not be subject to taxation on account of their distribution.

5. 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 those appropriate to its object or those prohibited under Article 3 (2). of Regulation EEC 2137/1985 of 25 July 1985.

CHAPTER III

Enterprise Temporary Joins

Article 68. Temporary joint ventures.

1. The temporary unions of undertakings registered in the special register of the Ministry of Economy and Finance shall be taxed in tax transparency with the following exceptions:

(a) The above companies will not be taxed by the Company Tax, for the taxable amount attributable to the member companies resident in Spanish territory, which will charge those member companies.

(b) No limitations on the imputation of negative taxable bases shall apply.

2. Member entities of a temporary union of undertakings operating abroad may benefit from the income from abroad to the method of exemption.

3. Institutions which participate in works, services or supplies which they perform or provide abroad, by means of collaboration similar to temporary unions, may be exempt from income from abroad.

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

4. The option for the exemption will determine the application of the exemption to the extinction of the temporary union. The negative income which the temporary union has obtained in all the financial years of its existence shall be integrated into the taxable base of the member institutions, corresponding to the tax period in which the extinction occurred.

5. The tax arrangements provided for in this Article shall not apply in respect of tax periods in which the taxable person carries out activities other than those in which his or her social object must consist.

CHAPTER IV

Capital-risk and company corporations and funds

regional industrial development

Article 69. Capital-risk companies and funds.

1. Companies and venture capital funds governed by Royal Decree-Law 1/1986 of 14 March 1986 shall enjoy partial relief from the income they obtain in the transfer of shares and shares in the capital of the undertakings to which they relate. Article 12.1 of the Royal Decree-Law in which they participate according to the following scale of coefficients, according to the year of transmission computed from the moment of the acquisition:

a) Starting at the beginning of the third year and up to the sixth inclusive, the 0.99.

b) The seventh and eighth years, the 0.80.

c) The ninth and tenth years, the 0.50.

In the first two years and from the eleventh years exemption will not apply.

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 participation and tenure time of

the shares or shares.

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 holdings.

Article 70. Societies of regional industrial development.

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 shares in the capital of undertakings in which they are participating 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 28.2 of this Act whichever is the percentage of shares and holding time of shares/units.

CHAPTER V

Collective investment institutions

Article 71. Taxation of collective investment institutions.

1. The collective investment institutions governed by Law 46/1984 of 26 December 1984 of Collective Investment Institutions, with the exception of those subject to the general rate of charge, shall not be entitled to any deduction of the quota.

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 return the excess of its own motion.

Article 72. Taxation of the partners or members of the collective investment institutions.

1. The provisions of this Article shall apply to the members or members subject to this Tax by personal obligation to contribute or by real obligation through permanent establishment in Spanish territory, of the investment institutions collective as 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 transfer of the shares or units or the repayment of the shares or shares/units.

b) Benefits distributed by the collective investment institution. These benefits shall not be eligible for double taxation.

Article 73. Income taken into account of shares or units of collective investment institutions.

The amount of income accounted for by the taxable person arising from the shares or units of the collective investment institutions shall be integrated into the taxable amount.

Article 74. Taxation of members or members of collective investment institutions incorporated in countries or territories which are regulated as tax havens.

1. Taxable persons under a personal obligation to contribute by this tax or by real obligation through permanent establishment on Spanish territory, participating in collective investment institutions incorporated in countries or territories As tax havens, the positive difference between the liquidation value of the participation on the day of the closing of the tax period and its acquisition value shall be integrated into the tax base.

The amount integrated into the tax base 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 shall not be eligible for double taxation.

3. Unless otherwise tested, the difference referred to in paragraph 1 shall be presumed to be 15 per 100 of the acquisition value of the share or share.

CHAPTER VI

Tax Transparency

Article 75. Transparency regime.

1. They shall have the consideration of transparent societies:

(a) Companies in which more than half of their assets are constituted by securities and companies of mere holding of goods, where in them any of the following circumstances apply:

a ') That more than 50 per 100 of the share capital belongs to a family group, in the understanding of these effects, which is constituted by persons joined by links of direct or collateral online, consanguine or by affinity up to the fourth grade, inclusive.

b ') That more than 50 per 100 of the share capital belongs to 10 or fewer partners.

For the purposes of this precept, they shall be companies of mere possession of goods in which more than half of their assets do not affect business or professional activities as defined in Article 40 of the Law 18/1991, of June 6, of the Tax on the Income of the Physical Persons.

To determine whether or not an asset is affected by business or professional activities, the provisions of Article 6 of Law 18/1991 of 6 June of the Income Tax of Persons shall be provided for. Physical.

Both the value of the asset and the value of the assets not affected by business or professional activities, will be the one that is deducted from the accounting, provided that it accurately reflects the true patrimonial situation. of the society.

They shall not be computed as securities, for the purposes of this letter in relation to the companies in which more than half of their assets are constituted by securities, the following:

-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 business or professional activities.

-Those held by securities companies as a result of the exercise of the constitutive activity of their object.

-Those who grant at least 5 per 100 of the voting rights and are held for the purpose of directing and managing participation whenever, for these purposes, the corresponding organization of material means is available and personal, and the participating entity is not included in this letter or in any of the following two.

For the purposes of this letter, they shall not be computed as securities or as non-material items to business or professional activities whose purchase price does not exceed the amount of undistributed profits obtained by the institution, provided that such profits come from the carrying out of business or professional activities, with the limit of the amount of profits earned both in the year itself and in the last ten years.

(b) Companies in which more than 75% of their income from the financial year comes from professional activities, where professionals, natural persons, who, directly or indirectly, are linked to the development of such activities activities, have the right to participate, on their own or in conjunction with their family members up to and including the fourth grade, at least 50 per 100 of the benefits of those activities.

(c) Companies in which more than 50% of their income from the financial year comes from artistic or sports performances of natural persons or any other activity related to artists or sportspersons when they are between them and their Family members up to and including the fourth grade are entitled to participate in at least 25 per 100 of the benefits of those.

2. The positive tax bases obtained by the transparent companies will be charged to their members who are taxable persons for personal obligation to contribute to the Income Tax of the Physical Persons or for this Tax.

The imputation shall not proceed when the totality of the partners are legal persons not subject to the tax transparency regime. In this case the offeree company will not have the consideration of a transparent company to any effect.

The imputation shall be applicable where the circumstances referred to in the preceding paragraph are met for more than 90 days of the social year.

3. The taxable amount attributable to the partners shall be that which results from the rules of this Tax.

The negative tax bases will not be charged, with the possibility of compensating with positive tax bases obtained by the company in the tax periods that will be concluded in the next seven years.

4. Members who are taxable persons shall be charged with a personal obligation to contribute to this Tax:

(a) Deductions and allowances in the quota to which the transparent company 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.

Deductions and bonuses will be jointly charged against the positive tax base.

(b) Fractional payments, deductions and income on account of the transparent company.

(c) The fee paid by the transparent company for this tax, as well as the share that would have been charged to that company.

5. The transparent companies shall be taxed by this tax and shall enter the corresponding quota under the same conditions as any other taxable person. The refund referred to in Article 39 of this Law shall not be carried out on the part attributable to the partners who are to bear the imputation of the positive tax base.

Dividends and interests in profits that correspond to non-resident partners in Spanish territory shall be taxed in such a way, in accordance with the general rules on the taxation of non-residents and the agreements to avoid double taxation subscribed by Spain. Dividends and shares in profits corresponding to partners which are liable to bear the charge of the positive tax base and come from tax periods during which the company is in a transparent manner, shall be taxed by this Tax or by the Income Tax of the Physical Persons. 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. In the case of the partners who are required to bear the imputation of the positive tax base that acquire the securities after the imputation, the purchase value of the securities shall be reduced by that amount.

6. In no case shall the tax transparency regime be applicable in the tax periods in which the securities representing the participation in the capital of the company are admitted to trading in one of the secondary markets. Securities officers provided for in Law 24/1988 of 28 July of the Securities Market. The tax transparency regime shall not apply where a legal person governed by public law is the holder of more than 50 per 100 of the capital of one of the companies referred to in paragraph 1 (a) of this Article.

Article 76. Imputation criteria.

1. The charges shall be made to the persons or entities holding the economic rights inherent in the quality of the partner on the day of the conclusion of the tax period of the transparent company, in the proportion resulting from the statutes social and, failing that, according to their participation in the social capital.

2. The imputation will be performed:

(a) When the partners are transparent companies, on the date of the close of the exercise of the participating company.

(b) When the members are taxable persons under a personal obligation to contribute to the Income Tax of the Physical Persons or to this Tax, in the tax period in which the annual accounts have been approved except that it is decided to do so on an ongoing basis on the same date of closure of the exercise of the participating company.

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 77. Identification of members.

Transparent companies should maintain or convert the representative securities of the shares in their capital into nominatives.

The lack of compliance with this requirement will have the consideration of a simple tax violation, punishable by a fine of 25,000 to 1,000,000 pesetas, for each tax period in which the non-compliance has been given, the directors of the company shall be jointly and severally liable, except for those who have expressly proposed the measures necessary to comply with the provisions of the preceding paragraph, without having been accepted by the others.

When, as a result of the breach of the obligation laid down in the first paragraph of this Article, it is not possible to know, in whole or in part, the members, the taxable amount which cannot be imputed shall be Corporate Tax, at a rate equal to the marginal maximum of the scale of the Income Tax of the Physical Persons.

CHAPTER VII

Company Group Regime

Article 78. Definition.

1. Groups of companies may opt for the tax arrangements provided for in this Chapter. In such a case, the companies in which they are integrated shall not be taxed on an individual basis.

2. Individual taxation arrangements shall mean that each company shall be responsible in the event of the non-application of the company group scheme.

Article 79. Taxable person.

1. The group of companies shall be treated as a taxable person.

2. The dominant company shall have the representation of the group of companies and shall be subject to compliance with the material and formal tax obligations arising from the group of companies.

3. The dominant company and the dependent companies will also be subject to the tax obligations arising from the individual tax system, 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 group of companies, with the formal knowledge of the dominant company, shall interrupt the limitation period. of the Corporate Tax which affects the said group of companies.

Article 80. Tax liabilities arising from the application of the corporate group scheme.

The companies in the group will respond in solidarity with the payment of the tax liability, excluding the penalties.

Article 81. Definition of the group of companies. Dominant company. Dependent companies.

1. Group of companies shall mean the set of limited and limited liability companies for shares resident in Spanish territory formed by a dominant company and all the companies that are dependent on it.

Also considered as dominant companies are entities that have legal personality and are subject to and not exempt from the Company Tax.

2. A dominant company shall be deemed to meet the following requirements:

(a) Having a direct or indirect participation of at least 90 per 100 of the share capital of another company or other companies on the first day of the tax period in which this tax regime applies.

(b) that such participation has been kept uninterrupted at least one year in advance of the day referred to in the preceding subparagraph and is maintained throughout the tax period as well.

The requirement to maintain participation throughout the tax period shall not be required in the event of dissolution of the participating entity.

(c) Not dependent on any other resident in Spanish territory, who meets the requirements to be considered as dominant.

d) Not subject to the tax transparency regime.

3. A dependent company shall be understood to mean that the dominant company has a holding which meets the requirements set out in points (a) and (b) of the previous paragraph.

4. They may not be part of the groups of companies, the entities in which one of the following conditions is present:

a) That they enjoy exemption for this Tax.

(b) The closure of the tax period is in a situation of suspension of payments or bankruptcy, or incurs in the estate situation provided for in Article 260 (1) of the recast of the Law of Public limited liability companies, even if they did not have 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 group of companies.

5. The group of companies shall be extinguished when the dominant company loses that character.

However, in the event that another company takes part in the dominant company of a group of companies by way of one of the operations regulated in Chapter VIII of this Law, so that the first one meets the requirements to be considered dominant, the tax regime provided for in this chapter will result from application to the new group thus formed, after communication to the tax administration and from the very moment of the extinction of the existing group.

Article 82. Inclusion or exclusion of companies in the group.

1. The companies on which a holding is acquired as defined in paragraph 2 (a) of the preceding Article shall be compulsorily integrated into the group of companies with effect from the following tax period. In the case of newly created companies, the integration will take place from the moment of their constitution, provided that they meet the other requirements necessary to be part of the group of companies. The dominant company shall inform the tax authorities of the identity of those companies.

2. Dependent companies that lose such a condition will be excluded from the group of companies with effect from the tax period itself in which such a circumstance occurs. The dominant company shall inform the tax authorities of the identity of those companies.

Article 83. Determination of the indirect domain.

1. Where a company has at least 90 per 100 of its share capital in another company, and in turn the latter is in the same situation as for a third, and so on, to calculate the indirect participation of the first over the other companies shall, respectively, multiply the shares in the share capital, so that the result of such products must be at least 90 per 100 so that the indirectly involved company may and must be integrated into the group of companies and, in addition, it will be necessary for all intermediate companies integrate the group of companies.

2. If a group of companies co-exist direct and indirect participation relationships, in order to calculate the total participation of one company in another, directly and indirectly controlled by the first, the percentages of direct participation shall be added and indirect. In order to enable the participating company to be integrated into the group of companies, that sum must be at least 90 per 100.

3. If there is a relationship of reciprocal, circular or complex participation, the participation of at least 90% of the share capital must be tested with objective data.

Article 84. Application of the corporate group scheme.

1. The arrangements for the groups of companies shall be applied solely on the basis of the agreement of each and every one of the companies to be incorporated by the group of companies. The dominant company shall communicate the above agreements to the tax administration, before the beginning of the tax period in which the tax administration applies.

2. The agreements referred to in the preceding paragraph may be adopted at any date of the immediate tax period preceding the date of application of the group of companies and shall take effect if they have not been contested or not be susceptible to impeachment.

3. Companies which are now part of the group of companies 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 due. tax on the scheme of the groups of companies.

4. When the option is exercised, the corporate group scheme will be applied for three consecutive tax periods, with the companies belonging to the group agreeing to benefit from it for three other tax periods and so on. by complying with the provisions of paragraphs 1 and 2.

Article 85. Determination of the corporate group's tax base.

1. The corporate group's tax base shall be determined by adding:

(a) The taxable bases for each and every company belonging to the group.

b) Eliminations.

c) The additions of the eliminations practiced in previous exercises.

2. The positive difference between the book value of the shares in the capital of the dependent companies held by the parent company, directly or indirectly, the dominant company and the party shall not be considered as a tax deductible. (a) the proportion of such securities represented 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 group of companies.

Article 86. Eliminations.

1. For the determination of the consolidated tax base, all the results of the internal transactions carried out during the tax period shall be carried out.

Internal transactions shall be understood as those between companies of the group in the tax periods in which they are part of the group and the scheme provided for in this Chapter applies.

2. The elimination of results, positive or negative, will be carried out by internal operations, as soon as the aforementioned results are included in the taxable bases of the entities that are part of the group.

3. The dividends included in the individual taxable bases in respect of which the deduction for internal double taxation has not been carried out in accordance with Article 28 (4) of this Law shall not be eliminated.

Article 87. Additions.

1. The eliminated results will be incorporated into the corporate 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 group of companies, the result removed from that transaction shall be incorporated into the taxable base of the group of companies concerned. the tax period prior to the period of the said separation.

Article 88. Compensation of negative taxable bases.

1. If, by virtue of the rules applicable to the determination of the group of companies ' taxable amount, the group of companies is negative, the amount may be offset against the positive tax bases of the group of companies in the terms of the group of companies in the Article 23 of 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 group of companies may be offset in the tax base of the company with the limit of the company's own tax base.

Article 89. Reinvestment.

1. The companies of the group will be able to benefit from the reinvestment of extraordinary profits, being able to reinvest the own society that obtained the extraordinary benefit or another belonging to the group. Reinvestment may be carried out on an item acquired from another company in the group provided that the item is new.

2. Reinvestment of extraordinary profits shall not take place in the case of transfers made between entities in the group of companies.

Article 90. Tax period.

1. The corporate group's tax period will coincide with that of the dominant company.

2. Where any of the dependent companies conclude a tax period in accordance with the rules governing the taxation on an individual basis, that conclusion shall not determine that of the group of companies.

Article 91. Full share of the group of companies.

Full share of the group of companies shall be understood as the amount resulting from the application of the tax rate of the dominant company to the corporate group's taxable amount.

Article 92. Deductions and bonuses for the full share of the group of companies.

1. The full share of the group of companies shall be reduced by the amount of the deductions and allowances provided for in Chapters II, III and IV of Title VI of this Law.

The requirements set out to enjoy the above deductions and bonuses will refer to the group of companies.

2. Deductions from any company to be deducted at the time of its inclusion in the group of companies may be deducted from the full share of the company with the limit which it has corresponded to in the individual tax system.

Article 93. Reporting obligations.

1. The dominant 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 in the 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 corporate group's taxable base and those made for the purposes of the drawing up of the documents referred to in paragraph 1.

Article 94. Causes determining the loss of the group of companies.

1. The system of company groups will be lost for the following reasons:

(a) The concurrency in some or some of the companies belonging to the group of some of the circumstances that according to the provisions of the General Tax Law determine the application of the regime of indirect estimation.

(b) Failure to comply with the reporting obligations referred to in paragraph 1 of the previous Article.

2. The loss of the group of companies shall be produced for the purposes of the tax period in which some or some of the causes referred to in the previous paragraph are present, the companies belonging to the group being taxed under individual by himself.

Article 95. Effects of the loss of the consolidated declaration regime and the extinction of the group of companies.

1. In the event of the existence of the company group or the loss of the group of companies, elimination pending for incorporation, negative tax bases of the group of companies, or the loss of the group of companies, deductions in the quota to be cleared, shall be taken as follows:

(a) The outstanding removals of incorporation shall be integrated into the corporate group's tax base for the last tax period in which the corporate group scheme applies.

(b) The companies that are part of the group in the tax period in which the loss or extinction of this scheme occurs will assume the right to the pending compensation of the negative taxable bases of the group of companies, in the proportion who 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 up to the end of seven years from the following or following: those in which the negative taxable bases of the group of companies were determined.

(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 the proportion in which they contributed to the training of the same.

The compensation shall be made in the full quotas to be determined in the tax periods that subtract until seven counted from or after the one or those in which the amounts were determined deduct from the deduction of domestic and international double taxation deductions and five in the case of the remaining deductions.

2. The companies which are members of the group in the tax period in which the loss or extinction of the scheme is incurred shall be entitled to the deduction of the split payments which have been made, in the proportion in which they have contributed. to the same.

3. The provisions of the preceding paragraphs shall apply where some or some of the companies belonging to the group of companies cease to belong to the group.

Article 96. Declaration and self-settlement of the group of companies.

1. The dominant company shall be obliged, at the time of filing the company group's declaration, to settle the tax liability corresponding to it and to enter it in the place, form and time limits to be determined by the Minister for Economic Affairs and Finance.

Identical obligation is incumbent on you with respect to split payment.

2. The declaration shall be submitted within the time limit for the declaration under the individual taxation system of the dominant company.

3. Supplementary declarations to be made in the event of the extinction of the group of companies, loss of the group of companies or group company separation shall be submitted within the following 25 calendar days. 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 values

Article 97. 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 per 100 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 cash compensation not exceeding 10 per 100 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 whole of its social assets to the entity that holds the totality of the securities representative of its share capital.

2. The consideration of a split shall be the operation by which:

(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 per 100 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 its 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 letter previous.

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 representing the share capital of the acquiring institution.

4. 'branch of activity' means the set of assets which constitute, from the point of view of the organisation, an autonomous economic unit which is the determining factor of an economic exploitation, that is to say, a whole which is capable of operating on its own own resources. Debts incurred for the organisation or operation of the items which 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 per 100 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 their accounts.

Article 98. Arrangements for 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. Spanish.

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 (a) the normal market value and the value referred to in the following article, which is, where applicable, minorated in the amount of the write-downs and other corrections of value that have been accounted for by 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 made by non-resident entities in 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. Spanish.

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 clearly 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. itself.

The income derived from the transactions referred to in points (a), (b) and (c) above shall not be excluded from the tax base where the acquiring institution is exempt from this tax.

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 99. 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 transferring entity for the purposes of applying the provisions of Article 15.11 of this Law shall also be maintained. Those securities shall be corrected in the amount of the income which 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 100. Tax valuation of the 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 they have integrated into the tax base of the transferring company on the occasion of the transaction.

Article 101. Tax regime for the exchange of securities.

1. No income shall be included in the tax base of the Income Tax of the Physical Persons or of this Tax on the income that is shown on the occasion of the exchange of securities, 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 institution resident in Spain.

(b) The entity that acquires the securities as well as the investee 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.

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 valuation shall be increased or reduced by the amount of the additional compensation in money delivered or received.

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 the same.

5. Income obtained in transactions involving entities domiciled or established in qualified countries or territories shall be integrated into the impossible base of the Income Tax of the Physical Persons or of this Tax. Regulation (EU) No. 72014 of the European Community and of the European Community

Article 102. Taxation of the partners in merger, absorption and total or partial division.

1. The income which is disclosed on the occasion of the allocation of the securities of the acquiring institution to the members of the transferring entity shall not be integrated in the taxable amount provided that they are resident in or in the territory of Spain. a Member State of the European Union or of any other State provided that, in the latter case, the securities are representative of the share capital of an institution 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.

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 the same.

4. The 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. Regulation (EU) No. 72014 of the European Community and of the European Community

Article 103. 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 5 per 100, the positive income resulting from the cancellation of the holding shall not be included in the taxable amount of that entity, provided that it corresponds to 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 the 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 the same.

3. The assets acquired shall be valued for tax purposes in accordance with Article 99 of this Law.

When the acquiring institution participates in the capital of the transmitting entity, in at least 5 per 100, the amount of the difference between the acquisition price of the holding and its theoretical value shall be charged to the assets and acquired rights, in accordance with the accounting rules of valuation, and the part of that difference which, according to the valuation cited, would not have been imputed, shall be fiscally deductible with the maximum annual limit of one-tenth of its amount, provided 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 linked to the acquiring entity, or to a related entity when the latter, in turn, acquired the participation of the aforementioned persons or entities.

The requirement provided for in this letter shall be understood as:

a ') Dealing with an acquired participation in persons or entities not resident in Spanish territory or an entity linked to the acquiring institution which, in turn, acquired the participation of the persons concerned or institutions, where the amount of the difference referred to in the preceding paragraph has been taxed in Spain through any transfer of participation.

b ') In the case of a participation acquired from natural persons resident in Spanish territory linked to the related entity when the latter, in turn, acquired the participation of the related natural persons, proves that more than 50 per 100 of the increase in wealth obtained by these 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, the cases referred to in Article 42 of the Trade Code shall be those referred to in Section 1 of the first chapter of the rules for the formulation of consolidated annual accounts, approved by Royal Decree 1815/1991, of 20 December. The requirement laid down in this letter shall not apply with respect to the purchase price of the share satisfied by the person or entity in question when it has acquired it from persons or entities not related to the territory of the territory of the Member State concerned. Spanish.

Where the requirement set out in point (b) above 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 it is proved that 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 98 (2) of this Law.

Article 104. Subrogation in taxes and duties.

1. Where the transactions referred to in Article 97 determine a succession on a universal basis, the rights and obligations of the transferring 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, in the event that the acquiring institution participates in the capital of the transferring entity, the tax base the negative difference between the value of the contributions of the partners, made by any title, corresponding to that holding and its book value, shall be reduced by the amount of the positive difference.

4. The subrogations shall comprise exclusively the rights and obligations born under the laws

Spanish.

Article 105. Imputation of rents.

The income of the activities carried out by the entities extinguished because of the operations mentioned in Article 97 of this Law will be charged in accordance with the provisions of the commercial rules.

Article 106. Losses of permanent establishments.

When a permanent establishment is transmitted and the scheme provided for in Article 98 (1) (d) of this Law is applied, the taxable amount 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 seven years.

Article 107. 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 98.2 of this Law in which case the information is to be completed only indicated in point (d):

(a) Exercise in which the transmitting entity acquired the transferred 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 104 (1) and (2) of the 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 persons partners shall mention in the Annual Report the following data:

a) The accounting value of the delivered values.

b) The value that the received values are counted for.

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 Memories, to include the mere indication of which days are included in the first annual report approved after the operation, which shall be kept while the circumstance referred to in the preceding paragraph is present.

4. Failure to comply with the obligations set out in the previous numbers will be considered a simple tax violation, punishable by a fine of 25,000 to 1,000,000 pesetas for each data omitted, with the limit of 5 per 100 of the value per the acquiring institution has reflected the assets and rights transmitted in its accounts.

Article 108. Special non-cash contributions.

1. The scheme provided for in this Chapter shall apply, at the option of the taxable person, to non-cash contributions in respect of which the following conditions are met:

(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 contributed are affected.

(b) Once the contribution has been made by the contributing entity to the own funds of the entity receiving the contribution in at least 5 per 100.

2. The arrangements provided for in this Chapter shall apply to the contributions of branches of activity, and to the contributions of property assets to business activities in which the conditions laid down in the preceding paragraph are met, made by natural persons, provided that they bear their accounts in accordance with the provisions of the Trade Code.

3. The assets transferred may not be valued for tax purposes by a value higher than their normal market value.

Article 109. Rules to avoid double taxation.

1. For the purposes of avoiding double taxation that could arise from the application of the valuation rules provided for in Articles 100, 101.2 and 108 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 28.2 of this Law, is the percentage of the partner's participation.

(b) The profits distributed from the income attributable to the assets contributed shall be entitled to the international double taxation of dividends, irrespective of the degree of participation of the member.

The depreciation of the share arising from the distribution of the profits referred to in the preceding paragraph shall be fiscally deductible, whatever the degree of participation of the partner.

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, be able to avoid double taxation. (a) to the contrary to those which it has practised pursuant to the rules of assessment laid down in Articles 100, 101.2 and 108 of this Law.

Article 110. Implementation of the tax regime.

1. The arrangements laid down in this Chapter shall apply in cases where the taxable person so decides. The option for the same must be communicated to the Ministry of Economy and Finance prior to the registration of the corresponding writing.

2. Where, as a result of the administrative verification of the operations referred to in Article 97 of this Law, it shall be proved that they were carried out mainly for the purposes of tax evasion or evasion, the right to the scheme shall be forfeited This chapter will be established in this chapter and will be carried out by the Tax Administration on the regularization of the tax situation of taxable persons.

CHAPTER IX

Mining Tax Regime

Article 111. 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, created by Law 54/1980 of 5 November, amending the Law of Mines, as well as those which are generally determined to be determined in general among 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, which has been paid for 10 years after the beginning of the first tax period on the basis of which the result of the holding is incorporated.

2. The activities referred to in the preceding paragraph shall not be considered to be the mere provision of services for the performance or development of such activities.

Article 112. Exhaustion factor: scope and modalities.

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 Section D by Law 54/1980 of 5 November amending the Law of Mines.

2. The exhaustion factor shall not exceed 30 per 100 of the taxable amount corresponding to the use made in the preceding 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 per 100 of the value of the minerals sold, also being considered as those 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 113. Exhaustion factor: investment.

The amounts that have reduced the tax base as a factor of exhaustion can only be invested in expenses, works and immobilized directly related to the mining activities listed below:

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 exclusively engaged in the activities referred to in points (a), (b) and (d) of this Article, as well as the exploitation of mineral deposits and other geological resources in Section C of Article 3 of Law 22/1973 of 21 July 1973, in the case of mines, provided that in both cases the securities are kept uninterruptedly in the assets of the institution 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 115.1 of this Law, or to reinvest the amount corresponding to that subscription, in other investments that meet the requirements. If the nine reinvestment was made in respect of the values referred to in point (c) above, they shall be maintained for the period remaining to complete the ten-year period.

d) Research to obtain a better knowledge 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 114. 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 end of the tax period.

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 in the amount that the tax base has reduced as a factor of exhaustion.

4. The taxable person shall collect in the memory of the 10 financial years following that in which the corresponding reduction was made, the amount of the reduction, the investments made from the same and the write-downs made, as well as any reduction in the reserve accounts which have been increased as a result of the provisions of the previous paragraph and the destination of the reserve. 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 relevant 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 115. 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 has made the inadequate provision and the corresponding interest on late payment shall 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 transferring 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 116. Research and exploitation of hydrocarbons: exhaustion factor.

Companies whose social object is exclusively the investigation and exploitation of natural, liquid or gaseous hydrocarbons in zones A and sub-areas (a), (b) and (c) of zone C as referred to in Article 2 of Law 21/1974, Of 27 June, of a Legal Regime for the Exploration, Research and Exploitation of Hydrocarbons, and with a complementary nature, those for the transport, storage, purification and sale of the extracted products, shall be entitled to a reduction in their tax base, as a factor of exhaustion, which may be, at the choice of the entity, either of the following two:

(a) 25 per 100 of the gross value of the hydrocarbons sold, with the limit of the tax base.

b) 40 per 100 of the tax base.

Article 117. Exhaustion factor: requirements.

1. The quantities which have reduced the tax base by way of exhaustion must be invested by the concessionaire in the research activities which he develops in the areas referred to in the previous Article, within five years.

To these effects, preliminary studies of geological, geophysical or seismic nature, as well as all the costs incurred in the area of a research permit, such as the surveys of exploration, the costs of works for the access and preparation of the land and the location of these surveys. Research expenditure shall also be considered to be carried out in a concession and relate to work for the location and drilling of a structure capable of containing hydrocarbons, other than that contained in the field which gave rise to the granting of the holding.

In no case shall the costs incurred after the time in which the production tests result positive be considered eligible for this investment.

Not included as research, for these purposes, the assessment and development surveys, even if they are negative.

2. In each tax period, the reserve accounts of the institution shall be increased in the amount that the tax base has reduced as a factor 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 depreciated.

4. The taxable person shall collect in the Memory of the five financial years following that in which the corresponding reduction was made, the amount of the reduction, the investments made with the load to the same and the write-downs made, as well as any reduction in the reserve accounts which have been increased as a result of the provisions of paragraph 2 and the destination of the reserve. These facts may be checked during the same period.

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 118. Exhaustion factor: non-compliance with requirements.

1. After the five-year period has not been reversed or the corresponding amount has been inadequately invested, 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 has made the inadequate provision and the corresponding interest on late payment shall 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 institution 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 116 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 appearing in the previous entity.

Article 119. 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 the transfer of assets and investments, which are attributable to it, in accordance with its degree of participation.

Article 120. 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 shall be considered as intangible assets, from the moment of their realization, and must be amortized with a maximum annual fee of 25 per 100. 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 reconditioning operations. conservation of fields.

In the case of expired or expired permits and concessions, the part of investments and expenses not written off by application of the preceding paragraph may be amortized by a maximum of 10 per 100. In no case shall the depreciation of expenses and investments made prior to periods of inactivity exceeding five years and the expenses incurred prior to the obtaining of the ownership of the permits be possible. research.

There will be no maximum repayment period for intangible assets and research expenditure.

2. The entities referred to in Article 116 of this Law shall compensate for the negative tax bases by means of the procedure of reducing the taxable bases for the following financial years by an annual maximum of 25 per 100 of each of the those.

This negative tax base compensation procedure replaces the one set out in Article 23 of this Law.

CHAPTER XI

International tax transparency

Article 121. Inclusion in the tax base of certain positive income obtained by non-resident entities.

1. Institutions subject to a personal obligation to contribute shall include in their taxable base the positive income obtained by a non-resident entity in Spanish territory, as soon as such income belongs to one of the classes provided for in paragraph 2. and the following circumstances are fulfilled:

(a) That alone or jointly with persons or entities related within the meaning of Article 16 of this Law have a participation equal to or greater than 50 per 100 in the capital, equity, results or rights of the non-resident entity's vote 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 that it determines in the persons or entities related to residents in Spanish territory.

The amount of the positive income to be included shall be determined in proportion to the participation in the results and, failing that, in proportion to the participation 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 to 75 per 100 of which he has corresponded in accordance with the rules of the same.

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 which fall on them, unless they are affected by a business activity in accordance with Articles 6 and 40 of Law 18/1991 of 6 May 1991, Article 42 of the Code of Commerce, in the sense of Article 42 of the Code of Commerce, is the subject 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.

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 37.1 and 2 of Law 18/1991 of 6 June of the Income Tax Physical.

The positive income from the following financial assets is not included in this letter:

a ') Those held to comply with statutory and regulatory obligations arising from the exercise of business activities.

b ') Those incorporating credit rights arising from contractual relations established as a result of the development of business activities.

c ') Those held as a result of the exercise of intermediation activities in official securities markets.

d') Those held by credit institutions and insurers as a result of the exercise of their activities, without prejudice to point (c).

The positive income arising from the transfer to third parties of own capital shall be understood as a result of the carrying out of credit and financial activities referred to in point (c), where the transferor and the transferee belong to a group of companies within the meaning of Article 42 of the Code of Commerce and the revenue of the transferee, at least 85 per 100, of 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 linked within the meaning of Article 16, as soon as they determine tax deductible expenses in those resident entities.

No positive income shall be included where more than 50 per 100 of the income derived from credit, financial, insurance or service provision activities, except those directly related to activities of (a) export, made by the non-resident entity, 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 points (a) and (b) that generates income.

The income provided for in points (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 5 per 100, when the following two requirements are met:

a ') That the non-resident entity directs and manages the units, through the corresponding organisation of material and personal means.

b ') That the income of the entities from which the income is obtained shall be at least 85 per 100 for the business of the business.

For these purposes, the income provided for in points (a), (b) and (d) of the business activities which originated in institutions which meet the requirement of (b) above and which are in the business of the business of the participated directly or indirectly by more than 5% by the non-resident entity.

3. The income provided for in points (a), (b) and (d) of the preceding paragraph shall not be included where the sum of the amounts of the amounts is less than 15 per 100 of the total income or 4 per 100 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. Institutions resident in Spanish territory as referred to in paragraph 1 (a) shall be obliged to include them 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 the taxable person chooses to make such inclusion 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 the conclusion of the agreement.

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 prevailing 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 will be considered, the last amounts paid to those reserves being applied.

A single positive income may only be subject to inclusion for once, whatever 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 30.2 of this Law.

(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 an identical or similar nature to this tax effectively satisfied shall be deducted. 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 that 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 points (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 transmission of the direct or indirect participation, the rules contained in Article 15 (9) of this Law shall apply. The social benefits referred to in that provision shall be those corresponding to the positive income included in the tax base.

11. The taxable persons to whom the provisions of this Article are applicable shall submit jointly with the declaration for 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) The relationship of administrators.

c) Balance sheet and profit and loss account.

(d) Amount of the positive income to be included in the tax base.

(e) Justification of the 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 referred to 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 per 100 of the acquisition value of the holding.

The presumptions contained in the preceding letters will admit proof to the contrary.

The assumptions contained in the preceding letters shall not apply when the participating entity consolidates its accounts, as provided for in 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 8.2 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.

CHAPTER XII

Tax Incentives for Small-Dimension Companies

Article 122. Scope: number of businesses.

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 250 million pesetas.

When the previous immediate tax period has been shorter than the year, the net amount of the business figure will be raised per year.

When the entity is newly created the amount of the business figure will refer to the first tax period.

2. 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 the first chapter of the rules for the formulation of the annual accounts consolidated, approved by Royal Decree 1815/1991 of 20 December 1991.

Article 123. 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 previous Article are fulfilled, shall be free of depreciation provided that, for the 24 months following the date of the start of the tax period on which the purchased goods are in operation, the total average template of the company is increased from the average of the previous 12 months and the increase is maintained for an additional period of 24 months.

The amount of the investment that will be eligible for the redemption regime will be that of multiplying the figure of 15,000,000 pesetas by the aforementioned 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 the following 12 months. to the conclusion of the same.

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 and the reinvestment exemption in respect of the items in which the amount of the transfer 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 shall be eligible for the reinvestment exemption. of monetary 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 late payment shall be entered.

The income of the full quota and the interest for late payment shall be made in conjunction with the self-settlement corresponding to 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 124. Freedom of depreciation for low-value investments.

The elements of the fixed new material made available to the taxable person in the tax period in which the conditions of Article 122 of this Law are fulfilled, the unit value of which does not exceed 100 000 pesetas, may to be freely depreciated, up to the limit of 2 million pesetas referred to the tax period.

Article 125. Depreciation of the fixed new material.

1. The elements of the fixed new material, made available to the taxable person in the tax period in which the conditions of Article 122 of this Law are fulfilled, may be amortised on the basis 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 the following 12 months. to the conclusion of the same.

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 depreciation 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 deduction of the excess of the depreciable amount resulting from the provisions of paragraph 1 in respect of the depreciation actually given shall not be conditional on the accounting imputation to the profit and loss account.

Article 126. Allocation for possible insolvencies of debtors.

1. In the tax period in which the conditions of Article 122 of this Law are met, an allocation for the coverage of the risk arising from the possible insolvencies up to the limit of 1 per 100 on existing debtors to the 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 122 of this Law no longer apply, will not be deductible until the amount of the balance of the provision referred to in paragraph 1.

Article 127. Exemption by reinvestment.

1. In the tax period in which the conditions of Article 122 of this Law are fulfilled, the income obtained, once corrected in the amount of monetary depreciation, shall not be included in the taxable amount for the onerous transfer of assets. (a) of the fixed assets, affecting economic holdings, provided that the amount of the said income does not exceed 50 million pesetas and the total amount of the transfer is reinvested in other elements of the fixed assets, economic holdings within the time limit referred to in Article 21.1 of this Law.

2. If the reinvestment is not carried out within the time limit, the part of the full quota corresponding to the income obtained, in addition to the interest for late payment, shall be entered in conjunction with the corresponding self-validation of the period tax on which the deadline expired.

3. Where the amount of the income is greater than 50 million pesetas, the exemption referred to in paragraph 1 shall reach that amount.

The amount of the remaining income will be eligible for the reinvestment of extraordinary profits.

CHAPTER XIII

Fiscal regime for certain contracts

finance lease

Article 128. 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 Discipline and Intervention of Credit Entities.

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 ten 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 (a) the financial contribution required by the Commission, without prejudice to the application of the indirect tax applicable.

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 expenditure fiscally deductible from 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 purposes of calculating 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 VIII, 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 on 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 enjoy the tax incentive provided for in paragraph 2 of the ninth final provision in the terms provided for in that provision. State General Budget Law.

CHAPTER XIV

Foreign Securities Holding Entities ' Regime

Article 129. Entities holding foreign securities.

1. Entities whose primary social object is the management and management of securities representative of the own funds of non-resident entities in Spanish territory that determine a percentage of participation, direct or indirect, equal or higher 5 by 100 and the placing of financial resources arising from the activities of the social object, by means of the corresponding organisation of material and personal means, may be covered by the scheme provided for in this Article. chapter.

2. In those tax periods where the institution has the consideration of a transparent company, it shall not be able to enjoy the arrangements provided for in this Chapter.

3. Entities covered by the scheme provided for in this Chapter may not be part of the groups of companies referred to in Chapter VII of this Title.

Article 130. Income derived from the holding of securities representing the own funds of non-resident entities on Spanish territory.

1. Dividends or shares in profits from non-resident entities on Spanish territory shall not be included in the tax base, provided that the following requirements are met:

(a) That the percentage of participation would have been uninterruptible during the previous year to the day that dividends or equity interests are payable. For the purposes of calculating the said period, account shall also be taken of the period in which the holding has been held uninterruptedly by another entity of the same consolidation group as referred to in Article 42 of the Trade Code.

(b) That the participating entity is subject and not exempt from a tax of an identical or similar nature to the Company Tax and is not resident in a country or territory that is regulated as a tax haven.

(c) That the income from which dividends or shares in profits come from is derived from the conduct of business activities abroad. For these purposes the following rules will be taken into account:

(a ') On a general basis, the revenue obtained by the participating entity must, at least in 90%, be carried out by the undertaking of business activities within the meaning of Article 40 of Law 18/1991 of 6 June 1991, Tax on the Income of the Physical Persons. It shall also be understood to include those arising from the transfer of property assets to the carrying out of business activities and dividends or shares in profits and income derived from the the transfer of the participation of non-resident entities in Spanish territory which comply with the requirements of this paragraph in respect of which the institution resident in Spanish territory has a direct or indirect participation, more than 5 per 100.

(b) In the case of wholesale trade, the following shall be considered as income from business activities carried out abroad as a result of transactions in which the goods are placed at the disposal of the acquirers in the country or territory in which the participating entity resides or in any other country or territory other than Spanish where they are carried out through the organisation of personal and material means available to the institution participated.

(c ') In the case of services, they shall have the consideration of income from business activities carried out abroad by the persons deriving from the provision of services which are used in the country or territory in which they are (a) the participating entity or any other country or territory other than Spanish where the same is carried out through the organisation of personal and material means available to the participating entity.

d') Dealing with credit and financial transactions shall be considered as income from business activities carried out abroad by the derivatives of loans and loans 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 Spanish where they are carried out through the organisation of personal and material means available to the institution participated.

e ') Dealing with the conduct of insurance and reinsurance operations shall have the consideration of income from business activities carried out abroad by derivatives of transactions in which the risks insured persons are in the country or territory in which the participating entity resides or in any other country or territory other than Spanish when they are carried out through the organization of personal and material means of has the participating entity.

(d) that the participating entity does not obtain income from those provided for in Article 121 (2) (c) of this Act, or in points (a), (b) and (d) of that paragraph and the amount of which exceeds any of the limits laid down in the first subparagraph of Article 121 (3).

2. The income from the transfer of the holding shall not be included in the taxable amount, provided that:

a) The requirements set in

are met

previous. The requirements laid down in points (b), (c) and (d) shall be fulfilled in each and every exercise of holding the holding. The requirement referred to in point (a) shall be understood as referring to the day on which the transmission occurs.

(b) The acquirer, if resident in Spanish territory, is not bound by the transmitting entity.

3. It shall not be included in the tax base of the entity that receives dividends or the profit share the depreciation of the share of the profit distribution, whatever the form and the tax period in which the depreciation is shown, except that the amount of the abovementioned benefits has been taxed in Spain on the occasion of a previous transfer of the holding.

The amount of the depreciation shall be that corresponding to the profits earned by the entity that distributes them prior to the acquisition of the stake.

4. Dividends or shareholdings in profits and income obtained in the transfer of participation which have not been incorporated in the tax base shall not be entitled to the deductions provided for in Articles 29 and 30 of this Law.

Article 131. Profit distribution.

Benefits distributed from non-integrated income in the tax base will receive the following treatment:

(a) Where the recipient is an entity subject to this Tax the received benefits shall not entitle the deduction by double taxation of dividends, but such a beneficiary may apply the double taxation deduction (a) in accordance with Articles 29 and 30 of this Law in respect of taxes paid abroad corresponding to the income which has contributed to the formation of the said benefits received.

(b) Where the recipient of the profits is a person subject to the income tax of the Physical Persons, the distributed profit shall not entitle the deduction by double taxation of dividends.

For the purposes of this Article, the first distributed profits shall be understood as coming from income integrated in the tax base.

The entity that distributes the profit should mention in the memory the amount of the non-integrated income in the tax base and the taxes paid abroad corresponding to the same and to facilitate to its partners the information necessary to enable them to comply with the provisions of the preceding letters.

Article 132. Implementation of this scheme.

1. Persons wishing to enjoy the scheme provided for in this Chapter shall apply to the tax authorities in the form which it is determined to determine.

Applications shall be deemed to be estimated after the end of the resolution.

2. The enjoyment of the scheme provided for in this Chapter shall be conditional upon the fulfilment of the factual assumptions relating thereto, which shall be tested by the taxable person at the request of the tax administration.

3. 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 which such contributions shall confer.

CHAPTER XV

Partially Exempt Entities Scheme

Article 133. Scope of application.

This scheme shall apply to the following entities:

(a) Non-profit foundations, establishments, institutions and non-profit associations which do not meet the requirements for the enjoyment of the tax regime laid down in Law 30/1994 of 24 November 1994 on Foundations and Incentives to Private participation in activities of general interest.

b) Unions, federations and confederations of cooperatives.

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

(d) The Employment Promotion Funds constituted under Article 22 of Law 27/1984 of 26 July on Reconversion and Reindustrialisation.

(e) The Mutual Insurance and Occupational Accident and Occupational Diseases of Social Security that meet the requirements laid down by its regulatory regulations.

Article 134. 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.

(b) Derivatives of acquisitions and transfers for a profit, provided that some and other are obtained or performed in compliance with their specific social object or purpose.

(c) Those which are shown in the onerous transmission of goods affected by the performance of the social object or specific purpose where the total product obtained is intended for new investments relating to that object social 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 its life is useful in accordance with the method of depreciation, of those permitted under Article 11.1 of this Law, which is applied, it 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 transfer of such items before the end of the said period 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 derived from the exercise of economic holdings or from assets derived from holdings other than those referred to in paragraph 1. previous.

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 of human resources or of one of them in order to intervene in the production or distribution of goods or services.

Changes in the value of the assets of the taxable person shall be considered to be increases or decreases in the value of the taxable person, which shall be evidenced on the occasion of any alteration in the composition of the taxable person.

Article 135. Determination of the tax base.

1. In the direct estimation procedure, the taxable amount shall be determined by the amount of the net income, positive or negative, obtained in the course of an economic exploitation, of the income from the goods and rights that make up the entity's assets and the increases and decreases in assets.

The amount of net income shall be determined by applying the rules provided for in Title IV of this Law.

The amount of equity increases and decreases will be determined as follows:

(a) In the case of onerous or lucrative transmission, the difference between the acquisition and transfer values of the assets.

(b) In the other cases, the acquisition value of the assets.

In the case of transmission or acquisition, the normal market value shall be taken.

The provisions of Article 15.11 of this Law will apply to the effects of integrating the increases in wealth into the tax base.

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

(a) Expenses attributable, directly or indirectly, to the collection of income from the performance of activities which constitute the specific social object or purpose.

(b) The amounts which constitute the application of the income and, in particular, the surpluses which, from economic operations, are intended for the maintenance of exempt activities.

c) The excess value attributed to the personal work benefits received on the amount declared for purposes of withholding tax on the Income Tax of the Physical Persons.

TITLE IX

Tax Management

CHAPTER I

The Entity Index

Article 136. 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 discharge, registration and discharge in the index of entities will be established.

Article 137. Low in the entity index.

1. The State Agency of the Tax Administration shall, after hearing the interested parties, make an interim agreement on the following cases:

(a) When the tax debts of the entity to the Public Finance of the State are declared failed in accordance with the provisions of the General Rules of Collection.

(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 the same 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 138. Obligation to cooperate.

1. The holders of the public records shall forward monthly to the State Agency of Tax Administration of their tax domicile a list of the entities whose constitution, establishment, modification or extinction they have entered during the period of the previous month.

2. The same obligation shall be for the notaries in respect of the scriptures and other documents that authorize the constitution, modification, transformation or extinction of all kinds of entities.

CHAPTER II

Accounting obligations. Goods and rights

not accounted for. Voluntary revaluations

Article 139. Accounting obligations. Powers of the tax administration.

1. The taxable persons of this tax must keep their accounts in accordance with the provisions of the Trade Code or with the rules governing them.

2. The tax administration may carry out the verification and investigation by examination of the accounts, books, correspondence, documentation and supporting documents concerning 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.

Article 140. Goods and rights not accounted for or not declared: presumption of obtaining income.

1. It shall be presumed that they have been acquired from a non-declared income the assets of which the property corresponds to the taxable person and are not registered in his 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 the accounts 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 same or, if not possible, applying the valuation rules established in the General Tax Law.

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 income resulting from the assumptions contained in the preceding paragraphs shall be attributed to the oldest tax period of the non-prescribed period, 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 141. 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 the accounts, 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 revalued elements are found in the assets of the taxable person.

2. A simple tax breach shall be a breach of the obligation laid down in the preceding paragraph.

Such an infringement shall be punishable, for a single time, by a fine of 5 per 100 of the amount of the revaluation, the payment of which shall not determine that the amount is to be incorporated, for tax purposes, into the value of the assets of the revaluation.

CHAPTER III

Self-settlement and interim settlement statement

Article 142. Declarations.

1. Taxable persons shall be obliged to submit and sign a declaration for this tax at the place and in the form determined by the Minister for Economic Affairs and Finance.

The declaration shall be submitted within the period of the twenty-five calendar days following the six months following the end of the tax period.

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 VIII of this Law shall be obliged to declare in respect of non-exempt income, except that such income is subject to the obligation to retain and force the only income they obtain.

Article 143. 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 for Economic Affairs and 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 Furniture or in the General Register of Goods of Cultural Interest, according to Article 73 of Law 16/1985 of 25 June of the Spanish Historical Heritage.

The income to be shown on the occasion of the payment of the goods in question shall not be included in the taxable amount.

Article 144. Provisional settlement.

The tax management bodies may rotate the provisional settlement that proceeds in accordance with the provisions of Article 123 of the General Tax Law, without prejudice to the subsequent verification and investigation that may be carry out the Inspection of the Tribute.

CHAPTER IV

Return of trade

Article 145. Return of trade.

1. Where the sum of the quantities referred to in Article 39 of this Law exceeds the amount of the quota resulting from the reverse charge, the tax administration shall be obliged to carry out provisional liquidation within six months. following the end of the deadline for the submission of the declaration.

2. Where the quota resulting from the provisional liquidation is less than the sum of the concepts referred to in the preceding paragraph, the tax administration shall, within one month, return the excess entered on the provisional payment. quota.

3. If the provisional liquidation has not been carried out within the six-month period laid down in paragraph 1, the tax administration shall, in the following month, return the excess entered on the autoliquid quota, without prejudice to the conditions laid down in paragraph 1. the practice of any subsequent provisional liquidations which may result.

4. After the time limit for the return without taking place, the taxable person may request in writing that interest on late payment be paid in the manner laid down in Article 45 of the recast of the General Law Budget, adopted by Royal Legislative Decree 1091/1988 of 23 September.

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

Article 146. 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, the amount to be determined (a) to be regulated and to enter the amount in the Treasury in the cases and forms to be established. They shall also be required to retain and enter individual employers and professionals in respect of income which they satisfy or pay in the course of their business or professional activities, as well as natural, legal and other non-resident entities on Spanish territory operating in the territory by way of permanent establishment.

2. The subject obliged to retain must submit within the time-limits, form and places to be established, the statement of the quantities withheld or the negative declaration where the practice of the quantities has not been produced. It shall also present an annual summary of withholding tax with the content to be determined by regulation.

The corresponding declaration models will be approved by the Minister of Economy and 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.

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 of this Law.

(b) dividends or shares in profits arising from tax periods during which the institution is in the form of tax transparency.

(c) dividends or interests in profit and interest between companies that are part of a group that is taxed in the group of companies.

(d) dividends or shares in profits as referred to in Article 28 (2) of this Law.

Article 147. Obligations of taxable persons in relation to the tax domicile.

1. Taxable persons shall be obliged 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 manner that is determined.

CHAPTER VI

Administration faculties to determine

the tax base

Article 148. Powers of the Administration to determine the tax base.

To the sole purpose of determining the tax base, the tax administration may determine the accounting result, applying the rules referred to in Article 10.3 of this Law.

TITLE X

Jurisdictional Order

Article 149. 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. Application of the special arrangements for mergers, divisions, assets and exchange of securities.

The tax regime provided for in Chapter VIII of Title VIII of this Law shall also apply to transactions involving taxable persons in corporate tax which do not have the legal form of a company (a) a trade-off, provided that they produce results equivalent to those arising from the transactions referred to in Article 97 of this Law.

Additional provision second. Restrictions on the double taxation of dividends.

They shall not be entitled to the deduction provided for in Article 28 of this Law:

(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 Progressive Adaptation of the Petroleum Sector to the Community Framework.

(b) dividends distributed from profits corresponding to bonds paid in accordance with the provisions of Article 2 of Law 22/1993 of 29 December 1993 on the approval of fiscal measures, of reform of the Legal Regime of the Civil Service and of the Protection for Unemployment, and of returns from companies benefiting from the allowance provided for in Article 19 of the Law Foral 12/1993 of 15 November, 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 the 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 third. Group of companies of the State Society of Industrial Participations.

The State Society of Industrial Participations and their companies will be mainly taxed in the Corporate Tax according to the regime of the groups of companies. The inclusions and exclusions of companies in the group will be produced in the same financial year in which the aforementioned state company acquires or loses the majority participation.

The calculation of tax incentives will be made with exclusive reference to the companies belonging to the aforementioned group.

Additional provision fourth. Rules on retention, transmission and formal obligations relating to financial assets and other securities.

1. For the purposes of the obligation to retain on the implied income of capital, account of the Income Tax of the Physical Persons and of the Company 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 services responsible for the operation.

(b) In returns obtained in transmissions relating to transactions that are not documented in securities, as well as in transmissions entrusted to a financial institution, the retainer shall be the bank, box or entity acting on behalf of the institution. account of the relay.

(c) In the cases not listed in the preceding letters, the intervention of the public purse shall be compulsory for the retention.

2. In order to transfer or obtain the repayment of securities or assets with implied returns to be withheld, the prior acquisition of such securities or assets shall be credited with the intervention of the holders or institutions. (a) the financial contribution referred to in the previous paragraph as well as the price at which the transaction was carried out.

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.

3. 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; within the time limits and in accordance with the model determined by the Minister for Economic Affairs and 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 kind of securities or effects.

The management companies of collective investment institutions shall also be subject to this reporting obligation in respect of shares and shares in those 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.

4. 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. (a) the legal basis for the promotion of investment in such securities.

Additional provision fifth. Tax treatment in the Income Tax of the Physical Persons of certain preferential subscription rights.

The amount obtained by the transmission of preferential subscription rights resulting from capital increases made in order to increase the degree of dissemination of the shares of a company prior to its admission to trading in any of the official secondary markets of securities provided for in the Law 24/1988, of July 28, of the Market of Securities, will have for the taxable persons of the Tax on the Income of the Physical Persons the treatment (a) the tax provided for in Article 48 (1) (a) of Law 18/1991 of 6 June of the Income Tax Natural Persons.

The failure to submit the application for admission within two months, to be counted from the date of the capital increase, the withdrawal of the said application for admission, the refusal of admission or the exclusion of the (a) the total amount obtained by the transfer of the subscription rights shall be determined on the basis of the total amount obtained by the transfer of the subscription rights.

Additional provision sixth. Non-resident investments in Treasury bills.

The Public Debt Market Management Entities in Account Annotations will be required to retain and enter the Treasury, as a substitute for the taxpayer, the Income Tax of the Physical Persons or the Tax on Companies, corresponding to the income of the Treasury bills obtained by non-resident investors in Spain, without permanent establishment, provided that the exemption on yields from the different ones does not apply instruments of the public debt, in the terms provided for in Article 17 of the Law 18/1991, of June 6, of the Tax on the Income of the Physical Persons, and Article 46 of this Law.

Additional provision seventh. Taxation of increases in equity for the purposes of the actual obligation to contribute to the Corporate Tax.

The taxation of capital increases in the real obligation to contribute will be governed by the provisions of Article 18 (3) of Law 18/1991 of 6 June of the Income Tax of the Physical Persons, not where, in any event, the rules provided for in Article 45 (2) of that law are applicable.

Additional disposition octave. References to Law No 29/1991 of 16 December 1991 of the Adequation of Certain Tax Concepts 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 7 (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, December, from the Adequation of Certain Tax Concepts to the Directives and Regulations of the European Communities, provided that the transactions are entitled to the tax system governed by the first of the aforementioned Law, (a) to the special arrangements for mergers, divisions, contributions of branches of activity and exchange of securities defined in Article 97 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 From September, the Adequation of Certain Tax Concepts to the Directives and Regulations of the European Communities shall be construed as references to Article 97 (1), (2), (3) and (5) and Article 108 of this Law and the references to the Special Title I of Law No 29/1991 shall be construed as references to Chapter VIII of Title VIII of the present 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 scheme governed by the Regulation applies. Chapter VIII of Title VIII of this Law, with the exception of those provided for in Article 108.

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 VIII.

It will not be applicable to the provisions of article 9.2 of Law 39/1988 of December 28, Regulatory of Local Government.

Additional provision ninth. Split payment and coefficient of monetary correction for 1996.

1. In respect of the tax periods to be initiated during 1996, the percentage referred to in Article 38 (4) of this Law shall be 15 per 100 for the split payment method provided for in paragraph 2 of this Act. Where the full share taken as the basis for calculating the split payment has been determined in accordance with the rules of Law 61/1978 of 27 December 1978 on the Company Tax, the deductions and allowances referred to in paragraph 2 of this Article shall be that article shall be those laid down in that Law 61/1978.

For the modality provided for in Article 38 (3) of this Law, the percentage will be the result of multiplying by four septens the type of tax rounded by default.

In the split payments to be made in 1996, corresponding to tax periods which were initiated in 1995 and concluded in 1996, the basis and percentages for calculating those payments in either of the two The procedure shall be determined in accordance with Article 73 of Law 41/1994 of 30 December 1994 on the General Budget of the State for 1995.

Transparent companies shall not be required to make fractional payments in respect of the part of the tax base that is to be taxed at the rate of charge referred to in the transitional provision twenty-second of this Law.

2. With regard to the tax periods beginning in 1996, the coefficients provided for in Article 15.11.a) of this Law, depending on the moment of acquisition of the transferred assets, shall be as follows:

Coefficient

Prior to January 1, 1984/1.810

In the 1984/1,640 exercise

In the 1985/1,520 exercise

In the year 1986/1,430

In the 1987/1,360 exercise

In the 1988/1,300 exercise

In the 1989/1,240 exercise

In the 1990/1,190 exercise

In the 1991/1,150 exercise

In the financial year 1992/1,130

In the 1993/1,110 exercise

In the 1994/1,090 exercise

In the 1995/1,050 exercise

In the 1996/1,000 exercise

The coefficients will be applied as follows:

(a) The purchase price or cost of production, taking into account the year of acquisition or production of the assets. The coefficient applicable to the improvements shall be that corresponding to the year in which they were made.

(b) On account of the write-downs accounted for, taking into account the year in which they were made.

Additional provision 10th. Aid to the Community fisheries policy.

The income tax base will not be integrated into the tax base of the corporate income tax as a consequence of the perception of the aid of the Community fisheries policy, due to the permanent cessation of the the fishing activity of a vessel and its transmission for the formation of joint ventures in third countries, the latter being applicable to the latter as provided for in the fifth additional provision of Law 42/1994 of 30 December 1994. Tax, Administrative and Social Order, from the date of entry into force of the same.

Additional provision eleventh. Amendment of the Law on the Income Tax of Physical Persons.

Amendment of article 48.1.a) of Law 18/1991, of 6 June, of the Income Tax of the Physical Persons, by the incorporation of a new paragraph:

" a) From the transmission ...

For the purposes of the foregoing paragraph, they are to be understood by official secondary securities markets, both those provided for in Law 24/1988 of 28 July, of the Securities Market, and the second securities markets. in accordance with the provisions of Royal Decree 710/1986 of 4 April 1986.

For the determination of ... "

Additional disposition twelfth. Deduction for investments in new elements of tangible fixed assets.

1. With effect for the tax periods beginning in 1996, the taxable persons may deduct from the full quota the 5% of the amount of investments in new elements of the fixed assets, excluding land, affections to the development of the economic exploitation of the entity, which are made available to the taxable person within those tax periods.

2. The basis of the deduction shall be the purchase price or production cost.

3. It shall be a requirement for the enjoyment of the deduction for investments that the items remain in operation in the same taxable person for five years, except that their life is in accordance with the method of depreciation, of those admitted to the Article 11.1 of this Law, which applies, is lower.

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

5. The deduction referred to in paragraph 1 shall be eligible for the investments made under the leasing arrangements, with the exception of buildings.

6. The investment deduction shall be incompatible for the same items with:

(a) Those laid down in Law 31/1992 of 26 November of Tax Incentives applicable to the implementation of the Cartuja ' 93 project.

(b) Reinvestment of the benefits under the allowance provided for in Article 32 (1) of this Act.

(c) The reinvestment exemption provided for in Article 127 of this Law in respect of the items in which the amount of the transfer is reinvested.

7. The amount of the deduction may not exceed 15 per 100 of the full quota, which is reduced in the deductions to avoid double taxation at internal and international level and bonuses.

The amounts not deducted may be applied, subject to the same limit, in the settlements of the tax periods concluded in the immediate and successive five years, on the understanding that these amounts are included among the deductions as referred to in paragraph 4 of the transitional provision 11th.

Additional disposition thirteenth. Amendment of the Law on the Management and Supervision of Private Insurance.

The additional seventh provision of Law 30/1995, of 8 November, of the Management and Supervision of Private Insurance is amended, with the following wording:

It is deleted in article 15.3.a), paragraph 2. of Law 6/1992, of April 30, of Mediation of Private Insurance, the following paragraph:

"or the credit institutions listed in Article 1 (2) of Royal Legislative Decree 1298/1986 of 29 June 1986".

Additional disposition fourteenth. Amendment of the Law on the Income Tax of Physical Persons.

Article 71 (1) (b) of Law 18/1991 of 6 June of the Income Tax of the Physical Persons shall be worded as follows:

"b) One million pesetas annually."

First transient disposition. Regularisation of non-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 this Law take into account the effects of the determination of the tax bases corresponding to the tax periods in which it is applied, in accordance with the rules laid down in those rules.

In no case shall it be admissible that the same income is not taken into consideration or twice for the purposes of determining the tax base for the Company Tax.

Second transient disposition. Depreciation of elements affected by the exploitation of hydrocarbons.

The assets that the entry into force of this Law were being written off in accordance with the maximum depreciation coefficients set out in Article 47 (1) of Royal Decree 2362/1976 of 30 July 1976, The Regulation of the Law on Research and Exploitation of Hydrocarbons of 27 June 1974 has been approved by applying the aforementioned coefficients, and must be fully amortized within the maximum period of 20 years, from that date of entry into force.

Transitional provision third. Outstanding amounts of investment from endowments to the exhaustion factor.

The outstanding amounts of investment from the envelopes to the exhaustion factor made under Law 21/1974, of June 27, of the Legal Regime for the Exploration, Investigation and Exploitation of Hydrocarbons, and of the Law 6/1977, of January 4, of the Promotion of Mining, prior to the entry into force of this Law, must be invested in the conditions and with the requirements established in their respective laws, for the purpose of consolidating the deduction in their day practiced.

Transitional disposition fourth. Exemption by reinvestment.

The increases in assets charged in tax periods governed by Law 61/1978 of 27 December of the Tax on Companies, which are covered by the reinvestment exemption provided for in Article 15.8 of the Tax Code, are shall be governed by the provisions of this Law, even if the reinvestment takes place after the entry into force of this Law.

Transient disposition fifth. 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 Reconversion and Reindustrialisation, in the terms that are provided for.

Transitional disposition sixth. Tax benefits of Law 12/1988, Law 5/1990 and Law 30/1990.

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, on relative tax benefits a Madrid European Capital of Culture 1992, will retain the tax regime laid down in these rules for the period necessary for its complete liquidation.

The entity referred to in Article 2 of Law 30/1990 shall retain the tax system established therein for the period necessary for its liquidation in accordance with the provisions of the second provision of the same.

Transitional disposition seventh. Companies promoting companies.

1. Companies promoting undertakings which adapt their statutes to that of or become a venture capital company shall enjoy the arrangements provided for by this Law for those companies. The adaptation or transformation shall take place within a period of five years from the entry into force of this Law. Until such adjustment or conversion is made, they shall be taxed as laid down in Articles 243 to 252 of Royal Decree 2631/1982 of 15 October 1982 on the approval of the Company Tax Regulation, which for these purposes (a) After that period, no adjustment or conversion shall be made in accordance with the general rules.

Likewise, during the aforementioned period, the amounts donated to the companies promoting companies, will enjoy the regime provided for in article 14.2.a) of this Law.

The adaptation or transformation operations referred to in the first paragraph of this provision shall be exempt from the Tax on Proprietary Transmissions and Documented Legal Acts.

2. Companies promoting undertakings may also opt for dissolution and liquidation within a period of five years from the entry into force of this Law, in which case the following rules shall apply:

(a) Until such dissolution and liquidation take place, they shall be taxed in accordance with Articles 243 to 252 of Royal Decree 2631/1982, which shall, for these purposes, be deemed to be in force. In the tax period ending with the extinction, the difference between the theoretical values of their shares deducted from the last balance approved by the participating companies and their accounting values shall be included in the tax base. The tax liability arising from such integration shall apply to the deduction provided for in Article 243 of Royal Decree 2631/1982.

(b) For the purposes of the Income Tax of the Physical Persons or the Company Tax the members shall increase the value of their participation in the amount of the debts awarded and shall decrease it in the amount of the credits and money or a sign that represents it.

If the result of the operations described in the preceding paragraph is negative, this result shall be considered as an increase in equity for the purposes of the Income Tax of the Physical Persons. Similarly, for the purposes of the Company Tax, this result will be integrated into the tax base of the members, with the deduction provided for in Article 28 of this Law, except that the participation in the company of the promotion of undertakings has been acquired below its nominal value, in which case the deduction shall not be made in the amount of the difference between the two securities.

The shares shall be entered in the assets of the successful tenderer by their theoretical value and the remaining elements by their normal market value, except that those values are lower than the result of the transactions described in the first subparagraph of this point, in which case, those elements shall be valued for the amount of those results.

Assets awarded to members of a natural person other than credit, money or sign representing them shall be deemed to have been acquired by them on the same date on which their participation in the company was acquired. promotion of enterprises.

Transient disposition octave. Financial 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 on Discipline and Intervention of Credit Entities, lease agreements (a) financial services concluded prior to the entry into force of this Law which relate to goods the delivery of which has also been made prior to the entry into force of this Law or to immovable property whose delivery is it shall take place within two years after that date of entry into force.

transient disposition ninth. Trade funds, trade marks, transfer rights and other intangible assets acquired prior to the entry into force of this Law.

1. Article 11 (4) and (5) of this Law shall apply in respect of the purchase value of trade funds, trade marks, transfer rights and other items of intangible fixed assets acquired prior to entry. in force of this Law, which would not have been deducted for the purposes of the determination of the tax base, even if they were contachably amortised.

2. The second paragraph of Article 103.3 of this Law also applies to operations covered by Article 10 of Law No 29/1991 of 16 December 1991 on the Equation of Certain Concepts of Taxation to the Directives and Regulations of the European Communities, even if the depreciation has occurred for accounting purposes.

3. 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 the 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 has not been subsidised.

Transient disposition tenth. Mergers covered by Law 76/1980 of 26 December on the Tax Regime of Business Mergers.

If any of the operations that were covered by Law 76/1980, of December 26, on the Tax Regime of the Business Mergers, and before the end of five years if it were property and three of movable property were transferred assets which, on the occasion of the same, would have been revalued, the amount of the said revaluation shall not be counted in the acquisition value, except that the the effective value obtained in the transmission is reinvested in accordance with the provisions of Article 21 of the This Law shall apply the requirements laid down therein.

Transient disposition eleventh. Outstanding balances of the deduction for investments.

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 the Company Tax; Law 12/1988 of 25 May 1990; Law No 30/1990 of 27 June 1990 on the In the case of the Court of Justice of the European Union, the Court of Justice of the European Court of Justice of the European Court of Justice and the Court of Justice of the European Union, the Court of Justice of the European Union, This Law, under the conditions and requirements laid down in these laws.

2. 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 opted to apply the deduction for investments in assets In the case of the tax period, the deduction shall be applied in the settlement of the tax periods beginning from the entry into force of this Law into which the payments are made. referred to, under the conditions and

requirements laid down in that standard.

3. The deductions referred to in the preceding paragraphs shall be deducted in accordance with the limit on the liquid quota provided for in the relevant laws and in the corresponding State General Budget Laws.

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.

4. Deductions from different forms or periods of tax under Article 26 of Law 61/1978 of 27 December 1978 on the tax on companies, other than those relating to job creation, may not exceed a joint ceiling. of 35 per 100 of the liquid quota.

5. The deductions referred to in the preceding paragraphs shall be applied once the deductions and allowances laid down in Chapters II and III of Title VI of this Law are made and the deductions laid down in the Chapter IV of Title VI, the limit of which shall be calculated independently of the limit laid down in paragraph 4.

Transient Disposition twelfth. Negative tax bases prior to the entry into force of this Law.

The negative tax bases to be cleared at the beginning of the tax period in which this Law applies may be offset within the time limit laid down in Article 23 (1) of the same law, from the beginning of the tax period following that in which the negative tax bases were determined.

transient disposition thirteenth. Entities exempted under a standard of assimilation with the tax regime of the State or any other exempt entity.

The entities that at the time of the entry into force of this Law were exempt from the Corporation Tax under a rule that established the extension to the same of the State or any other regime exempt entity, will continue to enjoy the exemption during the tax periods beginning within three years of the entry into force of this Law.

Transitional disposition fourteenth. 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 this Law, had constituted a fund for the provision of insolvencies by means of the system governed by Article 82 (6) of Royal Decree 2631/1982 of 15 October 1982, approving the Companies Regulation, shall apply its balance to the coverage of the doubtful claims existing at that date and the excess, if any, to those which are subsequently produced up to their total extinction. In the meantime, the appropriations for the coverage of the said appropriations shall not be deductible.

15th transient disposition. Consolidated declaration regime.

The groups of companies that have granted the consolidated declaration regime for the entry into force of this Law will continue to enjoy the same, and the rules contained in Chapter VII of the Title VIII of this Law.

The groups which, according to Royal Decree-Law 15/1977 of 25 February, could have requested the extension of the consolidated declaration regime within the first tax period starting from the entry into force of the This law may be used for three other periods of tax in accordance with the rules laid down in Chapter VII of Title VIII. The obligations referred to in Article 84 may be fulfilled until the end of the first tax period.

Transient disposition sixteenth. 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 this Law, enjoy the bonus to which they relate: Article 25 (c) of Law 61/1978 of 27 December of the Corporate Tax; Article 1 of the Royal Decree Decree-Law 5/1980 of 29 May 1980 on the subsidy of the shares of the Company Tax, corresponding to the interest to be met by the local authorities, the Autonomous Communities and the State, on the basis of certain loans or (b) loans; Articles 6.5 and 20 of Law 12/1988 of 25 May 1988 on Tax Benefits relating to the Universal exhibition Seville 1992, to the commemorative events of the V Centenary of the Discovery of America and the Olympic Games of Barcelona 1992, and article 6.5. of Law 30/1990, of December 27, of Tax Benefits relating to Madrid The European Capital of Culture 1992, under a resolution agreed by the Ministry of Economy and Finance, will continue to apply it in the terms laid down in the respective rules.

transient disposition seventeenth. Tax value of the units of collective investment institutions.

For the purposes of calculating the excess of the liquidative value referred to in Article 74 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 the (a) this Law, 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 shares in profits distributed by collective investment institutions that derive from profits made prior to the entry into force of this Law will be integrated into the tax base of the partners or members thereof. For these purposes, the first distributed reserves shall be understood to have been endowed with the first benefits gained.

18th transient disposition. Update accounts.

1. As from the entry into force of this Law, the balances of the accounts "Update Budget Law for 1979", "Active overseas update, Budget Law for 1980" and "Update Budget Law for 1983", were transfer 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.

Nineteenth transient disposition. Exemption from the Special Tax on Real Estate.

Non-resident entities to which the exemption from the Special Tax on Real Estate is recognised or recognised, pursuant to paragraph 4 (d) of the Additional Provision 6. of Law 18/1991, shall enjoy the same until 31 December of the year following the entry into force of this Law.

Transient Disposition 20th. Deduction for international double taxation.

The amounts to be deducted corresponding to the international double taxation deduction provided for in Article 24 (4) and (5) of Law 61/1978 of 27 December of the European Company Tax shall apply in the settlements corresponding to the tax periods starting from the entry into force of this Law, under the conditions and requirements laid down in that Article.

Transient disposition twenty-first. Declaration and entry into a real obligation to contribute.

Until the form, the place and the time limit for the corresponding declaration and income of the tax corresponding to non-resident taxable persons who obtain income in Spain without establishment mediation are determined permanent, as provided for in Article 60 of this Law, remain in force:

-Royal Decree 1285/1991, of 2 August, establishing the procedure for the payment of the interest of the State Debt in Annotations to non-residents who invest in Spain without permanent establishment mediation,

-The Order of 31 January 1992 for the provision of rules for the declaration of taxes on the Income of the Physical Persons, on Societies and on Heritage accrued by actual obligation,

-The Order of 7 January 1992 approving the model for the declaration of retentions practiced in the acquisition of non-resident buildings, without permanent establishment, and

-The Order of December 28, 1992, which rules for the management of the Special Tax on Real Estate of Non-Resident Entities.

Transient disposition twenty-second. Taxation of transparent entities.

The rate of charge applicable to transparent companies will be, in each of the first three tax periods in which this Law applies, zero, 10 and 20 per 100, respectively, except for refers to the non-imputed tax base part, which shall be taxed at the general rate.

Transient disposition twenty-third. Deduction for double taxation of dividends on accounts in units.

The results of the participating accounts of the non-manager participant which, in accordance with the provisions of Article 14 (b) of Law 61/1978, of 27 December, of the Company Tax, or Article 37.1 of the Law 18/1991 of 6 June of the Tax on the Income of the Physical Persons, would have been integrated into the taxable base of the participating manager, giving the right to the deduction for double taxation of dividends.

Single repeal provision.

1. The following rules shall be repealed at the entry into force of this Law:

1. Articles 45, 46, 47, 48, 49, 50, 52, 53, 54, 55 and 56 of Law 21/1974 of 27 June on Research and Exploitation of Hydrocarbons in respect of the Company Tax.

2. Articles 26, 30, 31, 32, 33, 34, 35.1, 36, 37, 38 and 39 of Law 6/1977 of 4 January of the Promotion of Mining.

3. Articles 3, 4.3, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 of Royal Decree-Law 15/1977, of 25 February, of Fiscal, Financial and Public Investment Measures.

4. Law 61/1978 of 27 December of the Tax on Societies.

5. Royal Decree-Law 5/1980 of 19 May 1980 on the subsidy of the shares of the Company Tax corresponding to the interest to be met by the Local Corporations, Autonomous Communities and the State, on the basis of certain loans or borrowings.

6. Article 25.5 of Law 2/1981, of March 25, of Regulation of the Mortgage Market.

7. Article 10 (1) and (2), Articles 12, 13, 14, 15, 16, 17, 18 and 22 of Law 18/1982 of 26 May 1982 on the Tax Regime of Temporary Unions of Enterprises and Societies of Regional Industrial Development, as well as the totality of their additional provisions.

8. Royal Decree 2631/1982 of 15 October 1982 on the approval of the Companies Tax Regulation.

9. Articles 12, 15, 16, 17 and 18 of Law 5/1983, of 29 June, of Urgent Measures in Budgetary, Financial and Tax Matters.

10. Article 35 of Law 27/1984 of 26 July on Reconversion and Reindustrialisation.

11. Title III of Law 46/1984, of December 26, Regulatory of the Institutions of Collective Investment, regarding the Tax on Societies.

12. Articles 1, 2, 3, 7, 8 and 9, and the third provision, of Law 14/1985, of 29 May, of the Tax Regime of Certain Financial Assets.

13. Article 71 and the fourth transitional provision of Law 16/1985 of 25 June of the Spanish Historical Heritage.

14. The additional provisions of Law 46/1985 of 27 December 1985 on the General Budget of the State for 1986.

15. Article 16.2 of Royal Decree-Law 1/1986 of March 14, of Urgent, Administrative, Financial, Fiscal and Labor Measures.

16. Article 20.2 and 3 of Law 15/1986, of 25 April, of Companies Anonymous Labor.

17. Article 9 (a) and (b) of Law 10/1987 of 15 June 1987 of provisions for the Development of Actuations in the Field of Gaseous Fuels.

18. The additional provision, novena, of Law 33/1987, of 23 December, of the General Budget of the State for 1988.

19. Paragraphs 2, 3, 4, 5, 6 and 7 of the seventh additional provision of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities.

20. Royal Decree-Law 1/1989, of 22 March, which regulates the Tax Treatment of the Rights of Preferential Subscription and Treasury Letters for Non-Residents.

21. Royal Decree-Law 5/1989 of 7 July 1989 on urgent financial and fiscal measures.

22. Article 17 of Law 5/1990 of 29 June on Measures in Budgetary, Financial and Tax Matters.

23. Articles 28 and 45.2 of Law 10/1990 of 15 October of the Sport.

24. The final provision seventh of Royal Decree 1643/1990 of 20 December, approving the General Plan of Accounting.

25. Article 27 of Law 12/1991, of 29 April, of Economic Interest Groups, and Articles 24 and 30 of the same Law as regards the Company Tax.

26. The additional provision 6. of Law 18/1991, and other provisions relating to the Special Tax on the Real Estate of Non-Resident Entities, as soon as they object to the provisions of this Law.

27. Titles I and II of Law 29/1991 of 16 December 1991 of the Adequation of Certain Concepts of Taxation to the Directives and Regulations of the European Communities and the first and second provisions thereof.

28. The second subparagraph of Article 70 (1) (g) of the Financial Income Tax Regulation, approved by Royal Decree 1841/1991 of 30 December 1991.

29. Article 5.10 of Law 19/1992, of 7 July, on the regime of the Companies and Funds of Real Estate Investment and Regulation of the Fund of Mortgage Securitisation, in that it affects the Tax on Societies.

30. (c), (d), (e) and (f) of Article 68 (1) of Law 1/1994 of 11 March 1994 on the Legal Regime of Reciprocal Guarantee Societies.

31. Articles 10, 11 and 12 of Law 42/1994, of December 30, of Fiscal, Administrative and Social Order Measures.

32. Article 13.2 of the Royal Decree-Law 5/1995, of June 16, of the Creation of Certain Entities of Public Law.

33. Article 14 of Law 19/1995, of 4 July, of Modernisation of Agricultural Holdings in respect of the freedom of amortisation.

All laws and regulations regarding the obligation to contribute to this tax will be repealed.

2. By way of derogation from the above paragraph, they shall remain in force:

1. Articles 243 to 252 of Royal Decree 2631/1982 of 15 October 1982 approving the Companies Tax Regulation. After the expiry of the period referred to in the transitional provision, the seventh shall be repealed.

2. The additional provision, seventh, of Law 10/1985, of April 26, of Partial Modification of the Tax General Law, as soon as it affects the Corporation Tax.

3. Law 22/1986, of 23 December, granting certain tax and customs exemptions to the Institute of European-Latin American Relations, Law 3/1986, of 7 January, of entry of Spain into the Inter-American Corporation of Investments, and all related to the tax regime of the international organizations of which Spain is a party, as soon as it affects the Tax on Societies.

4. Law 8/1987, of 8 June, of Regulation of the Pension Plans and Funds.

5. The sixth second provision of Law 10/1990, of 15 October, of the Sport, as contained in Law 31/1990, of 27 December, of General Budget of the State for 1991.

6. Law 20/1990 of 19 December on the Tax Regime of Cooperatives.

7. Article 12 of Law 17/1991, of 27 May, of Urgent Fiscal Measures.

8. The additional 15th of Law 18/1991, of June 6, of the Income Tax of the Physical Persons.

9. Articles 93 and 94 of Law 20/1991, of 6 June, of Amendment of the Aspects of the Fiscal Economic Regime of the Canary Islands.

10. Royal Decree 1080/1991 of 5 July determining the countries or territories referred to in Articles 2 (3) (4) of Law 17/1991 of 27 May 1991 on Urgent Tax Measures and 62 of Law 31/1990 of 27 March 1990 on the In December, the General Budget of the State for 1991. The references contained in the text of this Law to the countries or territories considered to be regulated as tax havens will be understood as those related to the Royal Decree 1080/1991.

11. The additional twenty-sixth provision, first of Law 31/1991, of 30 December, of the General Budget of the State for 1992.

12. Article 3.3 of Law 15/1992, of 5 June, on Urgent Measures for the Progressive Adaptation of the Petroleum Sector to the Community Framework.

13. The Order of 13 July 1992 on the application of the provision for insolvencies to credit institutions subject to the administrative supervision of the Banco de España.

14. The Law 31/1992, of November 26, of Tax Incentives applicable to the Realization of Project Cartuja 93, in that it affects the Tax on Societies.

15. Article 12 (2) of Law 34/1992 of 22 December 1992 on the Management of the Petroleum Sector.

16. Articles 11, 12 and 14 of Royal Decree-Law 3/1993 of 26 February of Urgent Tax Measures on Tax, Financial and Employment Matters.

17. The Order of 12 May 1993 approving the tables of annual depreciation coefficients.

18. Article 14.7 of the Royal Legislative Decree 1/1993, of 24 September, approving the recast text of the Law on the Tax on Proprietary Transmissions and Documented Legal Acts.

19. Article 2 and the additional provision of Law 22/1993, of 29 December, of Tax Measures, of Reform of the Legal Regime of the Civil Service and of Protection for Unemployment.

20. Law 19/1994, of 6 June, of Amendment of the Economic and Fiscal Regime of the Canary Islands.

21. The Royal Decree-Law 7/1994 of 20 June on freedom of depreciation for investment-generating investments.

22. Law 30/1994, of 24 November, of Foundations and of Tax Incentives to Private Participation in Activities of General Interest.

23. The seventh additional provision, paragraphs 8, 9, 10 and 11 of the eighth additional provision, paragraph 2 of the third transitional provision and the sixth transitional provision of Law 40/1994 of the National Electrical System.

24. The fifth and twenty-eighth provision of Law 42/1994, of December 30, of Fiscal, Administrative and Social Order Measures.

25. The Royal Decree-Law 2/1995 of 17 February on Freedom of Amortization for Investment Creators.

26. The orders for which the exemption is declared, subject to reciprocity, of the corresponding returns to maritime or air navigation entities resident abroad.

27. Article 24 (2) of the Legal Statute of the Insurance Compensation Consortium, approved by Article 4 of Law 21/1990 of 19 December 1990, adapting Spanish law to Directive 88 /357/EEC on the freedom of insurance services (a) different from that of life and updating of private insurance legislation, as well as the transitional provisions fourteenth, fifteenth and sixteenth of Law 30/1995 of 8 November of the Management and Supervision of Private Insurance, all This is the case in respect of the Company Tax.

3. Until the entry into force of the regulatory standard which is issued under the enablement provided for in Article 146 of this Law, the rules relating to the obligation to retain, in respect of the taxable persons, shall continue in force. Corporation tax, in force at the entry into force of the same.

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

The tax obligations for tax periods initiated prior to and concluded after the entry into force of this Law will be required in accordance with the rules in force at the time of the initiation of the abovementioned tax periods.

Final disposition first. Entities covered by Law 30/1994, of 24 November, of Foundations and of Tax Incentives for Private Participation in Activities of General Interest.

1. Entities that meet the characteristics and comply with the requirements of Title II of Law 30/1994, of November 24, of Foundations and of Tax Incentives for Private Participation in Activities of General Interest, will have the the tax regime that is established in the tax system.

2. Articles 52, 65 and the additional provision, ninth, four, of Law 30/1994, of 24 November, of Foundations and Tax Incentives for Private Participation in Activities of General Interest, shall be worded as follows:

" Article 52. Exemption by reinvestment.

Will be exempt from the increases in wealth shown in the onerous transfers of assets of the fixed assets, material or intangible assets, and of securities representative of the participation in the funds (a) of any kind of entity which grants a participation of not less than 5 per 100 on the share capital of the same and which has been held, at least one year in advance, when the total product obtained is intended for new investments related to the exempted activities.

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 its useful life in accordance with the method of depreciation, of those admitted to Article 11.1 of the Company Tax Act, which the taxable person chooses, is lower.

If reinvestment is not carried out within the period indicated, the part of the full share corresponding to the income obtained, in addition to the interest for late payment, will be entered in conjunction with the quota corresponding to the period the tax on which he won. "

" Article 65. Treatment of income resulting from the donation of goods.

No income, positive or negative, shall be subject to the tax, which shall be disclosed on the occasion of donations of the goods referred to in points (a) and (b) of Article 63 (1) and Article 69 of this Law, carried out in favour of the entities referred to in those provisions. '

" Additional provision ninth, paragraph four:

The establishments, institutions and entities that, not meeting the requirements provided for in Title II of this Law, have their tax regime equated to that of the non-profit, benefit-teaching entities, -private or similar, shall be governed by the provisions of Chapter XV of Title VIII of the Companies Tax Act. '

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

1. The cooperatives will be taxed in accordance with the provisions of Law 20/1990 of 19 December on the Tax Regime of Cooperatives.

2. Articles 15.3, 17.4, 24 and 36.b of Law 20/1990 of 19 December on the Tax Regime of Cooperatives shall be worded as follows:

" Article 15.3 Notwithstanding the provisions of the preceding number, when dealing with cooperatives of consumers and users, housing, agricultural or those who, in accordance with their statutes, perform services or supplies to their partners, shall be counted as the price of the corresponding transactions for which it was actually carried out, provided that it does not fall below the cost of such services and supplies, including the corresponding part of the general expenditure of the entity. Otherwise the latter shall apply. In agricultural cooperatives this system will be applied to both the services and supplies that the cooperative makes to its partners and for the partners to carry out or deliver to the cooperative. "

"Article 17.4 The imputations to the financial year of capital grants in the form provided for in the accounting rules applicable."

" Article 24. Loss compensation.

1. If the algebraic sum referred to in the previous article is negative, the amount of the sum may be offset by the cooperative with the positive full contributions of the tax periods concluded in the seven immediate and successive years.

2. This procedure replaces the compensation of negative taxable bases provided for in Article 23 of the Law on Companies Tax which, as a result, will not apply to cooperatives. "

"Article 36.b) Exemption from the Corporate Tax in the terms set out in Chapter XV of Title VIII of the Company Tax Act."

3. 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.

4. An additional new provision, fifth in Law 20/1990 of 19 December, on the Tax Regime of Cooperatives is added with the following wording:

"No property increases shall be considered as a consequence of the allocation of assets and rights of the Chambers of Agrarian Chambers which took place from 1 January 1994."

Final disposition third. Integration and compensation of implied income in the Income Tax of the Physical Persons.

The last paragraph of Article 37 (2) (a) of Law 18/1991 of 6 June of the Income Tax of the Physical Persons is worded as follows:

" The computation, integration, and compensation of implied returns will be practiced according to the following rules:

1. The computation of each performance will be done individually for each title or asset.

2. The positive implied returns will be integrated into the tax base.

3. The integration of negative implied returns will not proceed.

4. Ancillary Expenses for acquisition and disposal shall be computed for the quantification of performance, as long as they are adequately justified. "

Final disposition fourth. Amendments to the tax transparency regime.

1. Article 52 of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" Article 52. Transparency regime.

The members resident in the Spanish territory shall, in their taxable base, integrate the tax base imposed by the transparent companies referred to in Article 75 of the Companies Tax Act.

By way of derogation from Article 75.3 of the Company Tax Act, to the part of the taxable amount charged that corresponds to income earned from participation in own funds of any type of entity resident in Spanish territory shall be subject to the provisions of the third subparagraph of Article 37 (1) of this Law. "

2. Article 53 of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" Article 53. Imputation of other concepts. The partners resident in Spanish territory of transparent companies shall be entitled to imputation:

(a) The deductions and allowances in the quota to which the company is entitled. The bases of the deductions and bonuses will be integrated into the liquidation of the members, minoring, if necessary, the quota according to the specific rules of this Tax.

Deductions and bonuses will be jointly charged against the positive tax base.

(b) Of the instalments, retentions and income on account of the transparent company.

c) Of the share satisfied by the transparent company for the Company Tax. "

3. Article 55 of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" Article 55. Individualisation of income.

One. The allocation of positive tax bases of the companies referred to in Article 75 (1) (a) and (c) of Law 43/1995 on the Company Tax shall be effected in accordance with the same rules laid down in this Law for the individualisation of returns on capital.

Two. The allocation of positive taxable bases of the companies referred to in Article 75 (1) (b) of Law 43/1995 of the Company Tax shall be made to those who have the status of a member of the company, even if the ownership of the securities was common. "

4. Article 100 of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" Article 100. Return of trade.

One. Where the sum of the quantities retained at the source, the amounts paid into account and the contributions paid by the companies subject to the tax transparency regime exceed the amount of the quota resulting from the self-settlement, the administration The tax authorities shall be obliged to carry out provisional liquidation within six months of the end of the period for the submission of the declaration.

Two. Where the quota resulting from the provisional liquidation is less than the sum of the quantities actually withheld, the payments to be made and the quantities charged in respect of the quota paid by the companies subject to the Tax transparency, the tax authorities shall, within one month, return the excess entered on the said quota.

Three. If the provisional liquidation has not been carried out within the six-month period laid down in the preceding paragraph, the tax authorities shall, in the following month, return the excess to the self-imposed quota, without prejudice to the practice of subsequent provisional liquidations which may result.

Four. After the time limit for the return without taking place, the taxable person may request in writing that interest on late payment be paid in the manner laid down in Article 45 of the recast of the General Law Budget, adopted by Royal Legislative Decree 1091/1988 of 23 September.

Five. The procedure and the form of payment for the performance of the return of trade referred to in this Article shall be determined. '

Final disposition fifth. Amendments to the actual obligation to contribute.

The articles of Law 18/1991, of June 6, of the Income Tax of the Physical Persons, which are then related, will be modified as follows:

1. Article 17.

Article 17 shall be worded as follows:

" Article 17. Exemption assumptions.

The following rents will be exempt:

(a) Interest and increases in assets derived from movable property, obtained without permanent establishment mediation, by natural persons resident in another Member State of the European Union.

The provisions of the preceding paragraph shall not apply to increases in assets arising from the transfer of shares, units or other rights in an entity in the following cases:

a ') When the asset of that entity consists primarily, directly or indirectly, in real estate located in Spanish territory.

b ') When, at some point, during the 12-month period preceding the transmission, the taxable person, his or her spouse or persons connected with that person by relationship to the third degree have even participated, either directly or indirectly, in at least 25 per 100 of the capital or assets of that institution.

(b) Interest and equity increases arising from public debt, obtained by non-resident natural persons without permanent establishment mediation in Spain.

In no case shall the provisions of points (a) and (b) apply to the interests or increases of assets obtained through the countries or territories determined by their nature as tax havens.

(c) Equity income and equity increases derived from securities issued in Spain by non-resident natural or legal persons without permanent establishment mediation, whichever is the place of residence of financial institutions acting as payment agents or in the form of the issuance or transfer of securities.

However, when the holder of the securities is a resident entity or a permanent establishment in Spain, the income and equity increases referred to in the preceding paragraph shall be subject to this Tax and, in where applicable, to the withholding tax system, which shall be practised by the resident financial institution acting as the depositary of the securities.

(d) The income of the "non-resident accounts", which is satisfied to natural persons not resident in Spanish territory, unless the payment is made to a permanent establishment, by the Banco de España, Banks, Cajas de Savings, Rural Boxes, Credit Unions and other registered entities.

e) the income or increase of assets obtained in Spanish territory, without any permanent establishment in the territory of Spain, from the lease, sale or transfer of containers or of vessels and aircraft; Bare hull, used in international sea or air navigation ".

2. Article 19.

Paragraphs 1 and 3 of Article 19 shall be worded as follows:

" Article 19. Tax quota.

One. The following tax rates shall apply to the taxable amount determined in accordance with the preceding Article:

a) With a general character, 25 per 100.

b) In the case of equity increases, 35 per 100.

In the case of transfers of real estate located in Spain by non-resident taxable persons acting without permanent establishment, the acquirer shall be obliged to retain and enter the 10 per 100, or to make the entry into the corresponding account, of the agreed consideration, as a payment on account of the tax corresponding to those.

The above paragraph shall not apply in the case of immovable property acquired more than 20 years in advance of the date of transmission and has not been subject to improvements during that time.

(c) Pensions and liabilities that do not exceed the annual amount of 1,600,000 pesetas, received by non-resident persons in Spain, whichever person has generated the right to their perception, will be taxed at type 8 per 100.

(d) The income of the work of natural persons not resident in Spanish territory, provided that they are not taxable persons under a personal obligation to contribute, who provide their services in the Diplomatic Missions and Consular representations of Spain abroad, where the application of specific rules deriving from the International Treaties in which Spain is a party does not proceed, shall be taxed at 8 per 100. "

" Three. The payer of income, accrued without permanent establishment mediation, by non-resident taxable persons, or the depositary or manager of the goods or rights of non-resident taxable persons, not affected by an establishment (a) permanent, shall be jointly and severally liable for the income of the tax debts corresponding to the income which he has paid or the income of the goods or rights the deposit or management of which is entrusted to him.

A person or entity shall not be deemed to pay a performance when it is limited to a simple payment mediation. The term 'payment' means the payment of an amount, on behalf and order of a third party.

In the case of a payer of accrued income without permanent establishment mediation by non-resident taxable persons, the liability for the income of the income from the tax liability shall be payable without it being necessary the prior administrative act of derivation of liability provided for in Article 37 (4) of the General Tax Law, which may, for these purposes, be understood as the actions of the tax administration directly with the person responsible solidarity.

In the case of the depositary or manager of the goods or rights of non-resident taxable persons not affected by a permanent establishment, joint and several liability shall be required in accordance with the terms laid down in paragraph 4 of the Article 37 of the General Tax Law.

If the retention referred to in the second subparagraph of paragraph 1 (b) of this Article has not been entered, the goods transmitted shall be affected by the payment of the tax. "

3. Article 22 shall be worded as follows:

" Article 22. Representative of non-residents and tax domicile.

One. Non-resident taxable persons in Spanish territory shall be required to appoint a natural or legal person with residence in Spain, to represent them before the Administration in relation to their obligations under this Tax, when they operate by means of a permanent establishment, in the cases referred to in Article 18.2, or where, due to the amount and characteristics of the income obtained in Spanish territory by the taxable person, the administration so requires tax.

The taxable person or his representative shall be obliged to inform the tax administration of the appointment, duly accredited, within two months of the date of the appointment.

The designation shall be communicated to the Delegation of the State Administration of Tax Administration in which they have submitted the declaration for the Tax, accompanying the indicated communication the express acceptance of the representative.

Two. Representatives of permanent establishments who appear as such in the Trade Register or, failing that, who are entitled to contract on behalf of the permanent establishments shall be considered. Where such persons are not resident in Spanish territory, the provisions of the preceding paragraph shall apply.

Three. Failure to comply with the obligations referred to in paragraph 1 shall constitute a simple tax breach punishable by a fine of 25,000 to 2,000,000 pesetas.

Four. Taxable persons resident abroad shall have their registered office for the purpose of fulfilling their tax obligations in Spain:

(a) When they operate in Spain through permanent establishment, in the place where the effective administrative management and the management of their business in Spain, apply them, as soon as they are relevant, the rules concerning the entities resident in Spanish territory.

(b) In the case of real estate, in the place where the property is situated.

(c) In the other cases, in the tax domicile of the person in charge of solidarity or, where appropriate, in that of the representative. "

4. Article 45 (4) is amended as

:

" Article 45. Amount of increases or decreases. General rule.

Four. In the case of fully released shares, the age of the shares shall be deemed to be the age of the shares from which they come. '

5. The last paragraph of Article 48 (1) (a) shall be worded as follows:

" Article 48. Specific rules.

In the case of partially released shares, their acquisition value shall be the amount actually paid by the taxable person. In the case of fully-released shares, the acquisition value of both the shares and the shares from which they come shall be divided into the total cost between the number of securities, both the old and the released. "

6. Article 48 (1) (b), last subparagraph, shall be worded as follows:

" Article 48. Specific rules.

In the case of partially released shares, their acquisition value shall be the amount actually paid by the taxable person. In the case of fully-released shares, the acquisition value of both the shares and the shares from which they come shall be divided into the total cost between the number of securities, both the old and the released. "

Final disposition sixth. Integration of Taxes on Societies and on the Income of Physical Persons.

1. Article 37.1 of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" 1. Income from participation in own funds of any kind of entity.

dividends, bonuses for joint assistance and shares in the profits of companies or associations, as well as any other perceived utility of an entity under the same category, are included within this category. status of partner, shareholder or associate. Also, income from any asset class is included, except for the delivery of shares released, which, in the form of a statutory or a decision of the social bodies, entitles them to participate in profits, sales, transactions, income or similar concepts of a company or association for reasons other than the remuneration of the personal work.

For the purposes of their integration into the tax base, the yields referred to in the preceding paragraphs as soon as they come from companies, associations or entities resident in Spanish territory shall be multiplied by the following percentages:

a) 140 per 100 in general.

(b) 125 per 100 where they come from the entities referred to in Article 26.2 of the Company Tax Act.

(c) 100 per 100 where they come from the entities referred to in Article 26.5 and 6 of the Law on the Tax on Societies and protected and specially protected cooperatives, regulated by Law 20/1990 of 20 December, and of the reduction of capital with return of contributions. "

2. Article 78 (7) (a) of Law 18/1991 of 6 June of the Tax on the Income of Physical Persons shall be worded as follows:

" Seven. Other deductions:

(a) The percentages below are indicated in the case of the yields referred to in the fourth subparagraph of Article 37 (1) and the taxable base portion of a transparent company which corresponds to those yields:

-40 per 100 in general.

-25 per 100 when they come from the entities referred to in Article 26.2 of the Company Tax Act.

-0 per 100 when they come from the entities referred to in Article 26.5 and 6 of the Law on the Tax on Societies and protected and specially protected cooperatives, regulated by Law 20/1990 of 20 December, and the reduction of capital with return of contributions.

The basis for this deduction will be the amount of the amount collected.

The double taxation deduction corresponding to the returns of the protected and specially protected cooperatives, regulated by Law 20/1990 of 20 December, shall be in accordance with the provisions of Article 32 of that Law. "

3. Dividends or participations in profits corresponding to income earned in accordance with the provisions of Article 2 of Law 22/1993 of 29 December, or in Article 19 of the Law Foral 12/1993, of 15 November, of Navarra, or in the fifth additional provision of Law 19/1994 of 6 July 1994, or from entities to which the exemption provided for in the rules of force 5/1993 of 24 June 1993, of Vizcaya; 11/1993 of 26 June of Guipúzcoa and 18/1993 of 5 of 5 The Court of Justice of the Court of Justice of the European Communities, of the Court of Justice of the European Communities, June, of the Income Tax of the Physical Persons. In the tax base of the said tax, 100 per 100 of these dividends and participations in profits will be integrated.

In the case of distribution of reserves by the entities referred to in the preceding paragraph, the designation contained in the social agreement shall be considered, the first amounts paid to those reserves being applied.

Final disposition seventh. Amendment of Law 19/1991 of 6 June of the Tax on Heritage.

Article 6 of Law 19/1991, of 6 June, of the Tax on Heritage, will be worded as follows:

" Article 6. Representatives of non-resident taxable persons in Spain.

One. Non-resident taxable persons in Spanish territory shall be required to appoint a natural or legal person with residence in Spain to represent them before the tax authorities in relation to their obligations under this tax, when they operate through a permanent establishment or when the amount and characteristics of the assets of the taxable person located in Spanish territory so require the tax administration.

The taxable person or his representative shall be obliged to inform the tax administration of the appointment, duly accredited, within two months of the date of the appointment.

Two. Failure to comply with the obligations referred to in paragraph 1 shall constitute a simple tax breach punishable by a fine of 25,000 to 1,000,000 pesetas.

Three. In any event, the depositary or manager of the goods or rights of non-residents shall be jointly liable for the income of the tax liability corresponding to this tax for the goods or rights deposited or whose management is entrusted to them, in the terms provided for in Article 37 (4) of the General Tax Act. '

Final disposition octave. International tax transparency of the Income Tax of the Physical Persons.

Article 2 (1) (a) of Law 42/1994, of 30 December 1994, of Fiscal, Administrative and Social Order Measures, is worded as follows:

" One. Natural persons subject to a personal obligation to contribute 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 the paragraph 2 of this Article and the following circumstances are fulfilled:

(a) Which on its own or in conjunction with related entities as provided for in Article 16 of the Company Tax Act, or with natural persons subject to a personal obligation to contribute together Direct or collateral in line, consanguine or affinity to the second degree inclusive, have a share equal to or greater than 50 per 100 in the capital, own funds, results or voting rights of the entity resident on Spanish territory, on the date of the closure of the latter's social year.

The participation of the non-resident related entities shall be computed by the amount of indirect participation that it determines in the persons or entities related to residents in Spanish territory.

The amount of the positive income to be included shall be determined in proportion to the participation in the results and, failing that, to the participation in the capital, own funds or voting rights. "

Final disposition ninth. Ratings to the General Budget Law of the State.

1. The General Budget Law of the State may:

a) Modify the lien rates.

b) Modify the quantitative limits and fixed percentages.

c) Modify the exemptions.

d) Modify the determining circumstances of the actual obligation to contribute.

e) Modify the regime of transparent societies.

(f) To introduce and amend the precise rules to comply with the obligations arising from the Treaty on European Union and from the Treaty of European Union.

g) Modify the procedural and management aspects of the tribute.

h) Modify the time limits for the submission of declarations.

i) Set the coefficients to apply the provisions of article 15.11 of this Law.

2. The General Budget Law of the State shall establish the relevant tax incentives in respect of this Tax, where appropriate for the implementation of economic policy. In particular, the investment will be stimulated by means of deductions in the entire share based on the acquisition of elements of the material assets

new.

Final disposition tenth. Regulatory enablement.

The government will dictate how many provisions are necessary for the development and implementation of this law.

Final disposition eleventh. Entry into force.

This Law will enter into force on 1 January 1996 and will apply to the tax periods starting from the date expressed.

Therefore,

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

Madrid, December 27, 1995.

JOHN CARLOS R.

The President of the Government,

FELIPE GONZÁLEZ MARQUEZ