Taxation of Resident Companies and Stamp Duty in Spain
Resident Companies in Third Countries
Establishing Permanent Residency
Entities in third countries (e.g., Canada) operating through a permanent establishment in Spanish territory must pay tax on the same concepts (see diagram above) and under the same conditions as Spanish companies for the capital involved.
The taxpayer will be the company resident in the member country.
Consequently, companies resident in third countries that do not have a permanent establishment in Spanish territory are not subject to the taxable event, as per the standard.
Transfer of a Company
The taxable event occurs when a transfer of the registered office or address is made from a third country to the Spanish state.
The transfer of a company from one Community State to another Community State is not subject to this tax.
The tax base will be the net equity of the company, determined by the real assets less liabilities.
Permanent establishment: The most common example is a branch (a center without legal personality). This is different from a subsidiary, which is integrated into the same group as the parent company and has its own legal personality.
Parent Company (e.g., Germany) and Subsidiary (Spain) = Group of Companies.
Stamp Duty
These charges apply to the execution of certain transactions, with payment triggered by the formalization of the charged act. Metaphorically, these figures aim to fill gaps without imposing onerous burdens on transmissions and corporate transactions.
The standard distinguishes between:
Notary Documents
The fee varies and is regulated in Article 31.2 of the revised text.
The taxable event requires the concurrence of three circumstances:
- The issuance of a copy of a deed or an affidavit.
- The content includes acts or contracts that may be registered in the Land Registry, the Mercantile Registry, or the Registry of Industrial Property (note that this refers to the Patent and Trademark Office).
- The act is not subject to onerous transfer, corporate transactions, or inheritance and gift tax.
The taxable income is subject to the declared value of the transaction.
The taxpayer is the acquirer of the good or right, or in their absence, the person requesting the document.
The tax rate will be defined by the Autonomous Community (CCAA), and defaults to 0.5% if not specified.
A typical case is the transmission of property, taxed under VAT, which is formalized in a public deed. It’s important to pay attention to cases of tax exemption in the three mentioned categories (Onerous Transfer, Corporate Transactions, Successions and Donations) because in such cases, the taxable event for stamp duty is not triggered.
Controversial Case: Mortgage Loans
A controversial case is the mortgage loan consisting of a particular mortgage. According to Article 15 of the recast text, a mortgage is taxed as a loan, since the registration of mortgages is subject to onerous transfer tax, which regulates the taxable base and type. The mortgage loan itself is exempt. By taxing the mortgage as a loan, the logical consequence is that the mortgage deed should not be taxable under stamp duty. However, the Supreme Court has denied the exemption, stating that the mortgage does not secure onerous transmissions, and therefore, the mortgage deed is subject to stamp duty.
[Explanation: An exemption means the taxable event occurs but is exempt from taxation. If an exemption is given, the third requirement is not met. Non-subjection means the taxable event is not triggered.]