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Law 48/1985, Of 27 December, Partial Reform Of The Personal Income Tax.

Original Language Title: Ley 48/1985, de 27 de diciembre, de Reforma parcial del Impuesto sobre la Renta de las Personas Físicas.

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TEXT

JOHN CARLOS I,

KING OF SPAIN

To all who present it and understand,

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

The Tax on the Income of Physical Persons, arising from Law 44/1978 of 8 September, was an important step forward in the evolution of personal taxation in respect of the previous tax system. The passage of an analytical tax, based on sources of independent income to a synthetic tax, under the overall consideration of family income as an index of the ability to pay, determined the internal coherence of the figure and its harmonization. with the most orthodox principles of a correct tax technique.

The experience of the years in which this scheme has been in place has, however, found important shortcomings in the principles of economic efficiency and fair distribution of the tax burden.

On the one hand, the income of labor bears a tax burden that does not correspond to its real participation in the National Income. On the other hand, certain mechanisms existing in the tax today allow certain sectors of taxpayers to use them for purposes other than those for which they were born. Likewise, the progressiveness of the tax, coupled with the principle of accumulation of income, provides for a rigorous treatment for certain family units. Finally, the incidence of norms after the entry into force of Law 44/1978, and the consideration of certain technical aspects with implications of social justice, motivate the reform of some precepts.

Article first.

The articles of Law 44/1978, of 8 September, of the Income Tax of the Physical Persons, which are listed below:

Item seven.

The new wording is given to paragraph four, with the following content:

" Four. In the case of compensatory pensions between spouses and in the case of food annuities, both of which are satisfied by a court decision, the amount of the pension shall be calculated as an increase in the amount of the recipient's assets, yields of the exercise on which they are obliged to satisfy them. '

Article twelve.

This article is reworded in the following terms:

" One. The income corresponding to the civil societies, the inheritances, communities of property, whether public or not, and other entities referred to in Article 33 of the General Tax Law shall be attributed to the members, heirs, Community members and members, respectively, according to the rules or covenants applicable in each case, and if they do not establish the Administration in a feisty manner, they shall be attributed equally.

Two. In any case, the partners shall be charged and shall be integrated into their corresponding taxable base of the Income Tax of the Physical Persons or, where appropriate, in the case of the Company, the positive tax bases obtained by the companies that indicate, even if the results have not been distributed.

A) Investment companies would be without official listing on the stock exchange, holding companies and companies of mere holding of goods, where in all of them any of the following circumstances apply:

(a) That more than 50% of the share capital belongs to a family group, meaning that the family group is constituted by persons joined by links of direct or collateral online, consanguine or by affinity up to fourth grade, inclusive.

b) That more than 50 per 100 of the share capital belongs to 10 or fewer partners provided that none of them is a legal person under public law.

For the purposes of this precept:

First. Portfolio companies are those in which more than half of their assets are constituted by transferable securities.

Second. They are companies of mere possession of goods in which more than half of their assets, estimated in real values, do not affect business or professional activities, as defined in Article 18 of this Law.

B) Legal entities incorporated for the exercise of a professional activity in which all their partners are professionals who, directly or indirectly, are linked to the development of such activity.

Three. The basis attributable to the partners shall be that resulting from the Corporate Tax rules for the determination of the tax base.

Negative tax bases will not be directly imputed, with positive tax bases obtained by the transparent society in the following five years.

Four. The entities referred to in paragraphs 1 and 2 above shall not be taxed by the Company Tax. '

Article thirteen.

A new wording is given to paragraph two, in the following terms:

" Two. The amounts of the various items, positive or negative, that make up the income are integrated and offset for the calculation of the tax base, as provided for in this Law. "

Article fourteen.

New wording is given to paragraph two (c) and to paragraph three, in the following terms:

" Two.

c) Pensions and liabilities, whichever person has generated the right to their perception.

Three. For the purposes of determining the net income referred to in this Article, the following expenses shall be deducted, where appropriate, from the total income obtained by the taxable person:

(a) The amounts paid on a compulsory basis to Employment and Mutual Affairs, where they cover, inter alia, the risk of death; social security contributions for the taxable person; passive rights and contributions from the Colleges of Orphans or similar institutions.

(b) The amount resulting from the application of 2 per 100 over the amount of the revenue in respect of expenses of difficult justification. "

Article sixteen.

This article is reworded in the following terms:

" One. They shall be understood as income from property or possession of rustic and urban buildings:

(a) In the case of leased or sub-leased properties, the amount to be received from the lessee or sub-tenant, including, where appropriate, the amount corresponding to all the assets transferred to the lessee or sub-tenant. property. If the owner or owner of the actual right of enjoyment reserves any use, the amounts corresponding to it shall also be counted as revenue.

(b) In the case of the remaining urban buildings, excluding those which have the consideration of solar, the amount resulting from the application of the type of 3 per 100 to the value for which they are computed or should, where appropriate, be be computed for the purposes of the Extraordinary Tax on the Heritage of Physical Persons.

The issue in this section will only apply when it is urban real estate owned by a person other than the developer.

(c) The provisions of paragraphs (a) and (b) above shall apply to holders of actual rights of enjoyment.

(d) Yields from real rights that fall on rustic or urban goods.

Two. For the determination of the net returns referred to in this Article, they shall be deducted, if applicable:

A) Dealing with the goods referred to in point (a) of the preceding number 1, the costs necessary for obtaining the goods and the amount of the deterioration suffered by the use or time of the goods in which the yields proceed.

B) Dealing with urban goods covered by point (b) of the preceding number 1, the interests of the foreign capital invested in the acquisition or improvement of the goods from those yields.

(C) In the cases referred to in (A) and (B) above, the deduction for the interest of foreign capital invested in the acquisition or improvement of the assets of this nature may not exceed jointly 800,000 pesetas in each tax period. "

Article seventeen.

New wording is given to points (a) and (c) of paragraph 2 and paragraph 3, as follows:

" Two.

(a) dividends, bonuses for joint assistance and shares in the profits of companies or associations, as well as any other perceived utility of the entity under the condition of a shareholder, shareholder or participate.

(c) Consideration of any kind, cash or in kind satisfied by the collection or use of foreign capital, including the allowances and depreciation and the consideration obtained by the unit-holders. managers in the participating accounts, equity loans and similar transactions, as well as the difference between the amount satisfied in the issue, first placement or endorsement and the commitment to repay at maturity, in those transactions whose performance is fixed in whole or in part, implicitly through documents such as bills of exchange, promissory notes, bonds, bonds, cards and any other similar title, used for the collection of foreign resources.

When the holding of the title in the lender or investor's portfolio is less than the term of the title, the difference between the amount of the acquisition or the subscription and that of the disposal shall be calculated as yield or amortization.

Three. 1. For the purposes of determining the net income referred to in this Article, the following expenditure shall be deducted, where appropriate, from the total income obtained by the taxable person:

a) Administration and custody.

b) The interests of the foreign capital invested in the acquisition of the goods or rights of this nature, whose full income is computed, up to the limit of 100,000 pesetas in each tax period.

2. The positive and negative returns arising from the consideration referred to in point (c) of the preceding paragraph from the financial assets referred to in Article 1.2 of Law 14/1985 of 29 May shall be computed in accordance with the the provisions of that Law.

3. Exceptionally, in the case of yields resulting from the provision of technical assistance and the leasing of goods, businesses or mines, from the joint yields referred to in Article 4 of this Article, the necessary expenditure shall be deducted for the purpose of obtaining and the amount of the deterioration suffered by the goods from which the revenue comes, without prejudice to point (b) of the preceding number 1. '

Article nineteen.

New wording is given to your first paragraph in the following terms:

" 1. For the purposes of determining the net income of the business or professional activities, the total income obtained by the taxable person shall be deducted, where appropriate, from the costs necessary for obtaining the income and the amount of the deterioration suffered by the goods from which the proceeds come, including the following: "

From point 1.2, currently in force, the following point shall be deleted: "and where appropriate, Articles 16 and 17".

Paragraph 2 of that Article is deleted and the current paragraph 3 is therefore replaced by the following paragraph 3, replacing its introductory paragraph with the following:

"For the determination of the net returns referred to in Articles 14, 16, 17 and 18 of this Act, no deductible expenses shall be considered in any case:"

Article twenty.

This article is reworded in the following terms:

" One. Changes in the value of the assets of the taxable person, which are shown on the occasion of any alteration in the composition of the person, are increases or decreases, except as provided in the following paragraph.

Two. These are not increases or decreases in the assets referred to in the preceding number, the increases in the value of the assets which come from yields subject to taxation in this tax, by any other of their concepts, nor those which are subject to the Succession and Donation Tax.

It is not a loss of property due to the consumption or the discharge of the taxable person, the losses arising from activities covered by Articles 14 to 18 of this Law, those incurred by the game and not justified, whatever their origin.

It will not be estimated that there are increases or decreases in wealth, in the assumptions of division of the common thing, dissolution of the society of ganancial or the extinction of the regime of participation of the spouses, and in general, dissolution of communities or separation of communes.

Three. They are increases or decreases in equity, and as such will be computed in the income of the transmittal, the differences in value that are revealed for any lucrative transmission.

This provision shall not apply where the transmission occurs because of death and in respect of persons in the family unit to which the deceased belonged.

Four. The amount of the asset increases or decreases shall be:

First. In the case of onerous or lucrative disposal, the difference between the acquisition and disposal values of the assets.

Second. In the case of transmission mortis causa, the difference between the values of acquisition and transmission of the heritage elements.

Third. In other cases, the value of the acquisition of the assets or the proportional parts, if any.

Five. In the case of goods acquired prior to 31 December 1978, the value of the acquisition shall be taken as the value of the acquisition which was entered in the first immediate subsequent declaration issued by the Extraordinary Tax on the Property of the Physical Persons or, where applicable, the declaration of goods and securities for those taxable persons who would not have been obliged to make a declaration of the Extraordinary Tax on the Heritage of the Physical Persons, where the latter is higher than the acquisition and does not exceed the market value.

Six. Where the change in the value of the equity proceeds from a transmission for consideration, the acquisition value shall be composed of the sum of:

(a) The actual amount by which that acquisition was made.

(b) The cost of investments and improvements made in the assets acquired and the costs and taxes, state or local, inherent in the transmission which have been satisfied by the acquirer. This value shall be reduced, where appropriate, in the amount of depreciation for depreciation experienced by the said goods.

The value of the disposal shall be estimated at the actual amount by which that disposal would have been effected. The costs and charges referred to in point (b) of this paragraph shall, where appropriate, be deducted from this value as soon as they are satisfied by the enajenant.

Seven. In the case of transmission of mortis cause, and where the acquisition or disposal would have been profitable, the respective values shall be those determined for the purposes of the Tax of Successions and Donations.

Eight. Where the alteration in the value of the equity proceeds:

(a) From the disposal of transferable securities which are listed on the stock exchange, the increase or decrease shall be calculated by the difference between the average acquisition cost and the value of the divestiture determined, by its stock exchange listing the date it occurs.

For the determination of the acquisition cost, the amount of the subscription rights shall be deducted and deducted, where applicable, the costs incurred by the transmission from the seller.

In the case of total or partially released shares, the cost shall be computed by the amount actually paid by the taxable person.

As set out in point (a), it shall apply where appropriate in the case of securities for the disposal of transferable securities other than those referred to in Article 17 (2) (c).

(b) For the disposal of transferable securities referred to in point (a) above which are not listed on the stock exchange, the increase or decrease in equity shall be computed by the difference between the average acquisition cost and the value of the disposal, deducted, where appropriate, from the costs incurred in connection with the transmission from the seller.

The value of disposal shall be the actual amount actually satisfied, provided that it exceeds the greater of the following two values: the theoretical resulting from the last approved balance sheet or the one resulting from capitalizing on the type of 8 by 100 the average of the profits of the three social exercises closed prior to the date of the tax accrual. To this end, distributed dividends and allocations to reserves, excluding those for regularisation or updating of balance sheets, shall be counted as profits.

(c) In the disposal of shares or other holdings in the capital of the companies referred to in Article 12 (2), the increase or decrease shall be calculated by the difference between the cost of the acquisition and the ownership and the disposal value of those. For this purpose, the acquisition and ownership cost shall be estimated as integrated:

First. For the price or amount disbursed for the acquisition of the expressed securities, and

Second. For the amount of social benefits which, without effective distribution, would have been imputed to the partners as yields of their shares or units in the period of time between their acquisition and disposal.

Inversely, the social losses that in the expressed period could not have been compensated by the company, including those which, before the entry into force of this Law, would have been deducted, will be deducted. assigned to the partners by the usefulness of the shares or holdings in the securities.

(d) From non-cash contributions to companies, the increase or loss of capital shall be determined by the difference between the acquisition value of the assets or rights contributed and the amount greater than the following three:

First. The nominal value of the contribution.

Second. The Stock Exchange value of the titles received on the day the contribution or the previous immediate contribution is formalized.

Third. The valuation of the good contributed, according to the criteria laid down in the rules of the Extraordinary Tax on the Heritage of the Physical Persons.

e) From the separation of the partners or the dissolution of companies, the difference in more or less between the goods received as a result of the separation to the settlement fee shall be considered as an increase or loss of wealth the value of the acquisition of the title or share of the capital corresponding to that share.

In cases of merger or absorption of companies, the increase or decrease in the assets of the taxable person shall be computed by the difference between the acquisition value of the securities or the representative rights of the holding the capital of the company that is extinguished and the value of the securities or rights received in the acquiring company or the new company created as a result of the merger.

In the case of the separation of members or dissolution of the companies within the meaning of Article 12 (2), the acquisition and ownership value shall be computed in the same way as those referred to in paragraph (c). previous.

The provisions of this letter shall be without prejudice to the provisions of Law 76/1980 of 26 December on the Tax Regime of Business Mergers.

(f) The exchange, conversion or stamp of securities, not covered by Article 17.2, (c) of this Law, shall be determined by the difference between the acquisition value of the securities that are transferred and the which corresponds to the titles that are received, converted, or stamped.

The assumptions in which a company is limited to modifying the nominal value of its shares without altering the share of the shareholders in the capital are excepted from the provisions of the preceding paragraph.

Nine. In the case of sublease or transfer, the property increase or decrease shall be computed to the tenant or transferor, in the amount corresponding to the sublease or transfer, deducted in their respective cases from the lessor and the Participation that corresponds to the owner or user.

Ten. (a) Where compensation or capital insured for loss or loss in property is received, the difference shall be calculated as an increase or decrease in assets, in more or less, between the amount received and the part proportional to the acquisition value that corresponds to the damage.

If the item is the usual dwelling or the fixed business asset of the taxable person, the number fourteen of this article shall be provided.

(b) Where amounts derived from life or invalidity insurance contracts are collected, jointly or separately, with deferred capital, the equity increase or decrease shall be determined by the difference between the amount that is collected and the amount of premiums satisfied.

Once. In cases of permuse of goods or rights other than those referred to in point (f) of Article 17 (2) of this Law and in point (c) of this Law, the increase or decrease in assets shall be determined by the difference between the value of the acquisition of the property or right that is transferred and the market value of the property or right that is received in return.

Twelve. In the case of compensatory pensions between spouses and in the case of food annuities, both of which are satisfied by a court decision, the provisions of Article 7 (4) shall apply.

Thirteen. They shall have the consideration of non-justified increases in assets, acquisitions that occur in a burdensome manner, the financing of which does not correspond to the income and equity declared by the taxable person, as well as in the case of items property or income hidden in the statement of the Extraordinary Tax on the Heritage or in that of this Tax, respectively, without prejudice to the provisions of Article twenty-seven of this Law.

Fourteen. By way of derogation from this Article, increases in assets which are shown in the transfer of tangible tangible assets to the business, professional or artistic activities necessary for the purposes of the they shall not be taxed provided that the total amount of the disposal is reinvested in goods of the same nature and destination in a period not exceeding two years.

Likewise, the capital gains earned by the disposal of the taxpayer's habitual dwelling will be excluded, provided that the total amount of the property is reinvested in the acquisition of a new home This amount does not exceed 15,000,000 pesetas. Such reinvestment must take place within a period not exceeding two years.

When the reinvested amount is less than the total amount received in the disposal or greater than 15,000,000 pesetas, only the proportional share of the increase in the wealth obtained will be excluded from taxation. corresponds to the amount reinvested or to the limit of 15,000,000 pesetas, as the case may be. "

Item twenty-one.

This article is reworded in the following terms:

" One. If, by virtue of the rules applicable to the determination of the component of the tax base constituted by net income, this negative result is negative, the amount may be offset as follows:

a) With the net positive returns to be obtained in the following five years.

b) With the increases in equity that are evidenced in the year itself or in the following five.

Two. The compensation may be made in the amount that the taxable person considers appropriate, without being able to practise outside that period by the accumulation of negative net returns from subsequent years. '

Article 22.

Paragraphs one and six will have the following wording:

" One. The rateable value shall be determined by the sum of the returns and increases in the assets and the deduction of the property losses and decreases.

For these purposes, the property decreases shall be deducted exclusively from the increases in the assets. If the result of the previous operation is negative, the amount of the transaction may be transferred to the following five years until it is absorbed by the possible increases in the assets shown in the same period, taking into account the provided for in Article 27 of this Law.

In no case may the deduction be made outside that period by the accumulation of subsequent financial years.

Six. Where the determination of the tax base cannot be carried out by the above procedures, it shall be determined in accordance with Articles 50 and 51 of the General Tax Law. '

Article 24.

This article is reworded in the following terms:

" One. The tax period shall be lower than the calendar year in the following cases:

(a) Dealing with a taxable person who is not a member of a household, by death on a day other than 31 December.

(b) In the case of taxable persons who are members of a family unit by dissolution of the marriage, the death of one or both spouses or of the divorce, for the annulment of the marriage or for separation, is already marriage by virtue of a court judgment and by the death of the single parent or mother, or of any of the siblings who are subject to the same protection.

Two. In the cases provided for in the preceding paragraph, the tax period shall end, in consequence of the tax, where the circumstances set out in the tax period arise. And a new tax period for taxable persons will be initiated at this time, under the new conditions under which they will be found, which will end on 31 December, if no circumstances arise before that date. cited above.

Three. The taxable amount shall be that corresponding to the income obtained up to the dates specified in the preceding paragraph, without, in any event, elevation per year.

Four. The deductions in the quota referred to in paragraphs A, B, C and D of the article twenty-nine which are applicable shall be reduced in proportion to the number of calendar days of the calendar year.

Five. The heirs and legal persons shall be jointly and severally liable to the Hacienda with the surviving taxable persons of the family unit and shall deal with them in respect of the deceased's place for the purposes of the pro rata referred to in Article 30 and one of the Law. "

Article twenty-six.

Paragraph 3 of Article 33 of Law 44/1978 of 8 September is to constitute Article 26 (7) with the following wording:

" Seven. The value of the assets, hidden in the statement of the Extraordinary Tax on the Heritage of the Physical Persons, or of any income not declared in this Tax, shall be the income of the period in which it is discovered, except that prove that they occurred in another period, in which case they will be imputed to this one. "

Article twenty-seven.

This article is reworded in the following terms:

First. Irregular income increases, decreases in assets and returns that are obtained by the taxable person in a manner that is notoriously irregular over time or that, being a regular, the production cycle is more than one year.

For the purposes of this Article, it constitutes a net asset increase or decrease, the result of integrating and compensating those that are shown during the financial year, after application, where appropriate, of the provisions of the in Article 21 of this Law in point (b) of paragraph 1.

In the event of a net asset increase, the sum of the ratios resulting from the transaction contained in the following paragraph, each with its respective sign, shall constitute an increase or decrease in net annualized assets.

Second. Irregular income, except in the case of net income decreases and in the cases referred to in paragraph 7 of this Article, shall be divided by the number of years in the period in which they were generated or considered to be imputable.

In cases where this period cannot be determined, the five-year period will be taken.

Third. In the case of irregular yields, the ratios calculated in accordance with the preceding paragraph shall be added or subtracted as appropriate to the remaining yields.

If this result is negative, your amount may be the subject of the compensation provided for in Article 21 of this Law. If applicable, this option up to the maximum limit of the increases in the assets, the possible excess of the increase in wealth is integrated and compensates with the other increases and decreases for the calculation of the increase or decrease Net worth of exercise.

Fourth. In the case of a net asset reduction, the net income shall be exclusively the net increase of the following five financial years without, in any event, such a minoron as being liable to affect the determination of the average rate of charge for the financial year concerned.

However, net income decreases may undermine the net worth of the financial year, as determined in accordance with the seventh paragraph of this Article.

Fifth. To determine the average rate of charge, the general rate of the tax shall be applied to the size of:

A) In the absence of irregular yields:

(a) The income of the financial year that does not have such consideration.

b) Where applicable, the net annualized increase.

B) When irregular yields exist:

(a) The positive result of practicing the operation referred to in the first subparagraph of the third subparagraph of this Article.

b) Where applicable, the net annualized increase.

The income to be offset in subsequent periods or the net annualized income decreases shall never be made available for these purposes.

Sixth. 1. Without prejudice to Article 28 and to the exclusive effects of the situations referred to in this Article, the average rate of taxation resulting from the provisions of the preceding paragraph shall apply to the taxable amount of the financial year, determined in accordance with Article 22 of this Law, excluding these effects from that basis:

(a) The income referred to in the seventh paragraph of this Article.

(b) Net equity decreases, which are not the subject of financial compensation in the financial year.

(c) The negative result referred to in the second subparagraph of paragraph 3 of this Article, when moving to subsequent years.

2. Exceptionally, if the resulting average rate of charge is zero, it shall apply to the magnitude determined in accordance with the preceding number 1, the lowest rate of the scale.

3. If, as a result of the calculation of negative returns not cumulated, the quota determined in accordance with the preceding paragraphs is negative, it may be deducted from the full quota in the following five years.

Seventh. In the case of increases or decreases in the assets referred to in Article 20 (3), and without prejudice to the second subparagraph of Article 20 (4), the latter shall be integrated and offset against each other in order to determine the increase or net equity decrease of this nature.

If the result determines an estate increase, the lower rate of the tax scale will be taxed. Otherwise, it shall be compensated by increases of the same nature as shown in the following five years.

Article twenty-eight.

Paragraphs one, two, and three will have the following wording:

" One. The tax base of the tax will be taxed at the rates indicated on the following scale:

taxable base

up to pesetas

2.200,000

2.600,000

10.600,000

11,000,000

66.00

Average type resulting

Full-size

Rest of taxable base

up to pesetas

Applicable

0

0.00

0

500,000

8.00

500.00

8.00

40,000

100,000

16.85

600,000

9.48

56,858

200,000

21.29

800,000

12.43

99.442

200,000

27.20

1,000,000

15.38

153,843

200,000

33.10

1,200,000

18.34

220.060

200,000

22.13

1.400,000

18.88

264.320

400,000

23.74

1,800,000

19.96

359.280

400,000

25.90

21.04

462,880

400,000

28.06

22.12

575.120

400,000

30,22

3,000,000

23,20

696,000

400,000

32.38

3.400,000

24.28

825,520

400,000

34.54

3.800,000

25.36

963,680

400,000

36.70

4.200,000

26.44

400,000

38.86

4.600,000

4.600,000

27.52

1.265.920

400,000

41.02

5,000,000

28.60

400,000

43,18

5.400,000

5.400,000

400,000

Centro_table_body"> 29.68

1.602.720

400,000

45.34

5.800,000

30,76

1.784.080

400,000

47.50

6.200,000

31.84

1,974,080

400,000

49.66

6.600,000

32.92

2.172.720

400,000

51.82

7,000,000

34.00

2.380,000

400,000

53.98

7.400,000

35.08

400,000

400,000

7.800,000

36.16

2,820,480

400,000

58.30

8,200,000

37.24

3.053.680

400,000

60.46

8.600,000

38.32

3.295.520

400,000

62,84

9,000,000

39.41

3.546.900

400,000

63.38

9.400,000

40.43

3.800.420

400,000

64,19

9.800,000

41.40

4.057.200

400,000

64.86

10.200,000

42.32

4.316.640

400,000

65.37

43.19

4.578.140

400,000

63.54

43.93

4.832,300

400,000

64,17

11.400,000

44.64

400,000

400,000

11,8800

45.31

5.346,580

400,000

400,000

65,13

12,200,000

45.96

66.00

66.00

Two. The full quota of this tax resulting from the application of the scale may not exceed, for the subjects by personal obligation, 46 per 100 of the tax base or jointly for the quota corresponding to the Extraordinary Tax on the Heritage of 70 per 100 of this base. For these purposes, the part of the tax on heritage which corresponds to property assets which, by their nature or destination, are not liable to produce the yields referred to in Articles 14 to 18 of this Regulation shall not be taken into account. Law. For the proper application of this limitation, the declaration and settlement of both taxes shall be made at the same time.

Three. The capital increases referred to in Article 20 (3) of this Law shall be subject to the lowest rate of charge of the scale. "

Article twenty-nine.

This article is reworded in the following terms:

" From the fee resulting from the application of the tariff will be deducted:

A) With a general character: 17,000 pesetas.

This deduction shall be increased, where appropriate, by applying to the same the coefficient resulting from multiplying 1,5 by the number of members of the family unit who individually receive net income from the points (a) and (b) of Article 3 (2) of this Law, in excess of 150,000 pesetas per year, where several members receive such income.

This increase shall also apply where several members of the family unit jointly exercise business or professional activities in which they have been charged, for the purposes of the individual objective estimate, returns for the work in the activity in question.

B) Variable Deduction.

Regardless of the deduction which, if any, applies in accordance with the above letter, the family units with more than one recipient of dependent personal income may also be able to practise the resulting from the application of the following formula:

D = a + b (B) + c (B1 -B2)

Where:

D = resulting deduction.

B = total rateable value.

B1 = rest of taxable base (B-B2).

B2 = second net performance from personal work dependent on the second perceptor in order of importance.

The values of the parameters expressed in the formula are as follows:

a = 5,000

b =-8

c = 0.04

The amounts for B, B1 , and B2, are expressed in thousands of pesetas.

In no case will this deduction exceed 300,000 pesetas. When the application of this formula results in a negative amount, the deduction will be null.

C) For marriage reason: 21,000 pesetas.

D) Other family deductions:

1. For each child: 16,000 pesetas.

This deduction will not be performed by children or children:

(a) Over twenty-five years, except for the exception of point 4 of this letter D.

b) That they are part of another family unit.

c) That they earn income of more than 100,000 pesetas annually except when they are part of the family unit.

2. For each of the ascendants who live with the taxpayer, who have no income exceeding 500,000 pesetas per year: 12,000 pesetas.

3. For each taxable person or, where applicable, for each member of the family unit of age equal to or exceeding 70 years: 12 000 pesetas.

4. For each taxable person or, where applicable, for each member of the family unit, and for each child, irrespective of age, who is not a member of the household, and provided that the latter does not have an income exceeding 100 000 pesetas per year, are blind, maimed or invalid, physical or mental, congenital or over-come, in the degree to which they are regulated, in addition to the deductions which they have obtained, in accordance with the provisions of the preceding letters: 40 000 pesetas.

E) For disease expenses:

15 per 100 of the expenses incurred by the taxable person during the period of the imposition for reasons of illness, accident or invalidity, in the persons who make up the family unit or of others who give the right to deduction in the quota, as well as the expenses satisfied by professional medical and medical fees on the occasion of the birth of the children of the taxpayer and of the contributions paid to Mutual or Medical Insurance Companies.

This deduction shall be conditional upon its documentary justification and the indication of the name and address of the persons or entities receiving the respective amounts.

F) By Investments:

1. 15 per 100 of the premiums paid on the basis of life insurance contracts, death or invalidity, jointly or separately, concluded with entities legally established in Spain, where the beneficiary is the taxable person or, where applicable, the a contracting member of the family unit, his/her spouse, ascending or descending, as well as the amounts paid on a voluntary basis to Employment and Mutual Affairs, where, among other things, the risk of death or invalidity is covered.

Deferred capital insurance contracts, the duration of which is less than ten years, are excepted.

2.a) 15 per 100 of the amounts paid in the financial year in question for the purchase of the home which, not being newly constructed, constitutes or is to constitute the habitual residence of the taxpayer.

Housing shall be understood as a habitual residence in which the taxpayer, the family unit or any of its members resides for a continuous period of three years. However, it is understood that housing was such that, despite the absence of such a deadline, circumstances would necessarily require the change of housing.

(b) 17 per 100 of the amounts paid in the financial year concerned for the purchase or rehabilitation of dwellings, in accordance with Article 7 of Royal Decree-Law 2/1985 of 30 April 1985, Urgent Economic Policy Measures.

The basis of deduction referred to in (a) and (b) above shall be the amounts satisfied for the purchase or rehabilitation of the dwelling, including the incurred expenses incurred by the acquirer, except the interest, if any, that will be deductible from the income, in the form set out in Article 16 of this Law. For these purposes, the amounts constituting untaxed increases in equity shall not be computed in accordance with the provisions of Article 20 (14) of this Law.

3. 15 per 100 of the amounts paid during the financial year in question for the subscription of securities of fixed income with stock exchange listing and of domestic public debt which is expressly declared deductible, and the 17 per 100, when for the purposes of the application of the provisions of Article 1 (2) of the Directive, the Commission shall, in accordance with Article 1 (2) of Regulation (EU) no-570/1, provide for the provision of information on the application of the provisions of this Regulation. Article 3 of Royal Decree-Law 2/1985 of 30 April 1985 on Economic Policy Measures the securities remain in the assets of the acquirer for a minimum period of three years from the date of their acquisition and under the conditions to be determined.

The basis for this deduction will be the annual amount satisfied, as well as the amount of the subscription rights acquired and other expenses incurred by the subscription that have been incurred by the acquirer.

4.a) 20 per 100 of the investments made in the acquisition of goods which are entered in the General Register of Goods of Cultural Interest in accordance with the provisions of Article 69.2 of Law 13/1985, of 25 June, of the Spanish Historical Heritage, provided that the good remains at the disposal of the holder for a period of not less than three years, and the obligation to communicate the transmission to the General Registry of Goods of Interest is formalized Cultural.

(b) 20 per 100 of the amount of the costs of conservation, repair, restoration, dissemination and exposure of the goods which meet the requirements laid down in the preceding subparagraph, as long as they cannot be deducted as expenditure fiscally admissible, for the purposes of determining the net yield which, where applicable, shall be carried out.

The base of the set of deductions contained in the previous four numbers, as well as the one set out in point (G) (1) of this article, shall be 30 per 100 of the taxable amount of the taxable person or, where appropriate, for the family unit.

Likewise, the application of the deductions referred to in numbers 2, 3 and 4 (a) shall require that the proven amount of the taxpayer's assets at the end of the period of the tax exceeds the value of the verification at the beginning of the same, at least in the amount of the investments made. For these purposes, the capital gains or minorings of value experienced during the period of the imposition by the goods which at the end of the charge continue to be part of the estate of the taxpayer shall not be computed.

5. Taxable persons who carry out business, professional or artistic activities shall be subject to the incentives and incentives for business investment established or to be established by the Company Tax. with equal rates and deduction limits.

The corresponding deduction limits will be applied to the liquid quota resulting from the reduction of the full quota in the deductions noted in previous letters of this article, as well as in the above numbers letter.

G) Other deductions.

1. 20 per 100 of the pure and simple donations in goods that are part of the Spanish Historical Heritage that are registered in the General Register of Goods of Cultural Interest or included in the General Inventory referred to in Law 13/1985, 25 June, of Spanish Historical Heritage, provided that they are carried out in favor of the State and other public entities, as well as those that are carried out in favor of establishments, institutions, foundations or associations, even the ones in fact temporary nature, in order to arbitrate funds classified or declared beneficial or of public utility by the Competent authorities of the State, whose positions of employers, legal representatives or managers are free of charge and are held accountable to the corresponding protectorate.

2. By dividends received, 10 per 100 of the amount of dividends received by the taxable person under the conditions which it is determined to regulate and provided that they have actually been taxed without any bonus or reduction some for the Corporate Tax.

3. Irrespective of the deductions in the quota referred to in points (A) and (b) of this Article, the fixed amount of the work shall be deducted from the fixed amount of 20 000 pesetas. For family units with more than one recipient of income from work, the first recipient in order of the amount of net income shall be entitled to the fixed deduction of 20 000 pesetas; the second, to 1 per 100 of his net income work, up to a maximum of 10,000 pesetas, and by the other recipients, where appropriate, no deduction shall be applied.

4. The amount of the withholding and payment to account provided for in Article 36 of this Law, without prejudice to the provisions of Law 14/1985 of 29 May on the Tax Regime of Certain Financial Assets.

In general, the deductions referred to in this article will not apply to taxpayers by actual obligation, except when they obtain income through permanent establishment in Spain, in which case they will be the application of the provisions referred to in point (F) (3) and point (G) (4) of this Article. '

Article thirty.

This article is reworded in the following terms:

" One. In the case of a personal obligation to contribute, where income from the taxable person is income or increases in assets obtained and taxed abroad, the lower of the following amounts shall be deducted:

(a) The effective amount of the foreign satisfaction on the basis of a personal tax on such income or increases in equity.

(b) The result of applying the effective average rate of taxation to income or increases in equity from abroad.

Two. For these purposes, the effective average rate shall be determined by subtracting from the full amount of the tax the deductions referred to in this Act, except that referred to in Article 29 (G) (4). "

Article 2. Monetary Correction of Heritage Variations.

The determination of the possible increases or decreases in the property referred to in Article 20 of Law 44/1978 of 8 September, derived from transmissions from 1 January to 31 December 1986, of assets or assets acquired more than one year in advance of the date of those goods or assets, the following shall be considered as the acquisition value:

Dealing with property or assets acquired prior to 1 January 1979, the result of applying the acquisition value determined in accordance with the rules of the Income Tax of the Physical Persons, the coefficient 1.6.

Dealing with assets or assets acquired after 31 December 1978, the acquisition value determined in accordance with the rules of the Income Tax of the Physical Persons shall be applied following coefficients:

If the acquisition took place in the exercise:

1980

1.34

1981

1,24

1982

1,15

1983

1.09

1984

1985

1.00

Third item.

The articles of Law 61/1978, of December 27, of the Corporation Tax, which are listed below, are amended:

Article fifteen.

New wording is given to paragraphs (b) and second subparagraph (d) of number seven, with the following content:

" (b) The disposal of the shares or other holdings in the capital of the companies referred to in Article 12 (2) of the Income Tax Act, and paragraph 3 of the Article 19 of this Law, the increase or decrease shall be computed by the difference between the acquisition and ownership value and the disposal value of those. For such purposes, the acquisition and ownership value shall be deemed to be integrated:

First. For the price or amount disbursed for the acquisition of the expressed securities, taking into account possible mini-sentences for the treatment of related operations.

Second. For the amount of the accounting results attributed to the partners, in proportion to their degree of participation and taking into account the effective imputation of the taxable bases of the respective periods. The accounting losses imputed, as well as the dividends received, account for this value of ownership.

d) In the case of the separation of members or dissolution of the companies within the meaning of Article 19 (2) and (3) of this Law, the acquisition value shall be identified with the acquisition and ownership value previously reviewed for transparent entity partners. "

Article nineteen.

This article is reworded in the following terms:

" One. In any case, the partners shall be charged and shall be integrated into their corresponding taxable base of the Income Tax of the Physical Persons, or, where appropriate, in the case of the Companies, the positive tax bases obtained by the Companies to which refers to Article 12 (2) of the Law on the Income Tax of Physical Persons, even if it does not measure the distribution of results.

Two. The taxable amount attributable to the partners shall be that resulting from the rules of the Corporate Tax for the determination of the tax base.

Negative tax bases will not be directly imputed, with positive tax bases obtained by the transparent society in the following five years.

Three. They may opt for the scheme set out in the previous number one of the Temporary Groups and Unions of Companies and the Tax-protected Cooperative Societies, with the formalities, requirements and conditions added by the special legislation.

Four. The Entities referred to in this provision shall access the tax benefits that may be recognised by other companies.

The applicable deductions and bonuses on certain income or on the basis of investments will be attributable to the partners. These will integrate the basis of the incentive into their corresponding liquidatory schemes, minorating, where appropriate, the relevant quota according to the specific rules of the tax that serious the income of each partner, natural person or legal person.

Five. Entities under tax transparency shall not be taxed by the Company Tax. "

ADDITIONAL DISPOSITION

Law 30/1985 of 2 August of the Value Added Tax will be amended as follows:

Article forty-six. Previous deductions at the beginning of business or professional activities.

The number 9 in this article will be written in the following terms:

" 9. Taxable persons who have benefited from the deductions scheme provided for in this Article shall not be eligible for the simplified special schemes, for agriculture, livestock and fisheries, or for the equivalence surcharge for the period of three years. years from the start of their business or professional activities. "

Article fifty-two. Simplified scheme.

A new number 4 will be added, written as follows:

" 4. The simplified scheme shall not be eligible for any economic activity not covered by the special scheme, except those covered by the special arrangements for agriculture, livestock farming and fishing or for the surcharge of equivalence. "

" TRANSIENT DISPOSITION SEVENTH

Seventh. The determination of the minimum fees to be entered by taxable persons who opt for the simplified scheme governed by Title V, Chapter 1 of this Law, shall be calculated in such a way as to include the deductions under transitional arrangements provided for in this Act. in Title IX of that Law. In no case shall the indicated minimum quotas be able to experience minorations as a result of the application of the above deductions. "

TRANSIENT DISPOSITION

For companies which have been subject to the tax transparency scheme referred to in Article 12 (3), drawn up in accordance with Law 44/1978 of 8 September, in the case of the disposal of the shares or shares in the capital, the separation of partners or the dissolution of the shares, the increase or decrease in assets shall be computed by the difference between the acquisition and ownership costs and the disposal value of the those.

To this effect, the acquisition and ownership cost will be determined integrated:

First. For the price or amount disbursed for the acquisition of the expressed securities, and

Second. For the amount of social benefits which, without effective distribution, would have been imputed to the partners as income from their shares or units in the period of time between their acquisition and the entry into force of the Law.

Inversely, the social losses will be deducted, which in the expressed period would have been imputed to the partners by the usefulness of the shares or units in the company.

FINAL DISPOSITION

The provisions of this Law will take effect:

1. The new scale referred to in Article twenty-eight (1), such as the variable deduction of Article twenty-nine (B), with effect from 1 January 1985.

2. The modifications resulting from the new treatment which is established with respect to the property increases and decreases, from 2 October 1985.

3. The remaining amendments contained in this Law for the financial years beginning after 31 December 1985, as from 1 January 1986.

Therefore,

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

Palacio de la Zarzuela, Madrid, on December 27, 1985.

JOHN CARLOS R.

The President of the Government,

FELIPE GONZÁLEZ MARQUEZ