Spain: Tax on Non-Productive Assets

The tax return (tax form 540) of the new tax on non-productive assets of legal entities (IANP) must be filed between October 1 and November 30 of 2019, for tax years 2017, 2018 and 2019.

Starting next year 2020, form 540 must be filed from June 1 to June 30 of each year.

The purpose of the new Generalitat de Catalonia tax is to tax non-productive assets and certain rights that are granted to them when they are part of legal entities or part of entities which lack legal personality.

For the purposes of this new tax, non-productive assets are considered to be those that are not affected by economic activity, those assets that are intended for private use by owners, partners or persons related to them and those assets that are assigned free of charge to owners, partners or to persons related to them.

The taxable liability of this tax is constituted by the possession of the following non-productive assets located in Catalonia: real estate, motor vehicles exceeding 200 horse power, aircraft, private yachts and pleasure boats, jewels, art, and antiques.

The full tax quota is calculated by the application of scales on the following table, which coincide with the ones applicable to Wealth Tax in Catalonia:

This tax has a second non-tax purpose because it seeks to ensure that the legal title of non-productive assets of legal entities is adjusted to the real one. In this way, it aims to prevent tax avoidance practices such as incorporating personal assets into corporate structures.

We recommend carrying out an analysis of the possible non-productive assets of a company and, where appropriate, preparing the corresponding tax returns for 2017, 2018 and 2019 which can be filed up to the November 30 deadline.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.