1. General Overview
2. Exemptions
3. Tax on the transfer of property rights
4. Tax on Corporate operations
5. Stamp tax
6. Value verification


1.1 Legislation

  • Royal Legislative Decree 1/1993 of 24 September, approving the Revised Text of the Tax on the Transfer of Property Rights, Corporate Operations and the Stamp Tax.
  • Royal Decree 828/1995 of 29 May, approving the Regulations governing the Tax on the Transfer of Property Rights, Corporate Operations and the Stamp Tax.

1.2 Concept

Article 1 of the Revised Text of the Tax on the Transfer of Property Rights, Corporate Operations and the Stamp Tax (Royal Legislative Decree 1/1993), defines this tax as one of an indirect nature and that taxes:

  • The Transfer of Property Rights (the "Transfer Tax")
  • Corporate Operations (also the "Transfer Tax")
  • The Stamp Tax

Three different taxable events are involved with three distinct means of taxation that, additionally, must be coordinated with the Value Added Tax (hereinafter called, the "VAT").

In this regard, rules are established in order that the same legal act will not be taxed under several regimes according to the following chart:

ACT TAXED BY              INCOMPATIBLE                 COMPATIBLE

Tax on the Transfer of    Tax on Corporate 
Property Rights           Operations; Stamp Tax on
                          Public Deeds; VAT 

Corporate Operations      Tax on the Transfer of       VAT
                          Property Rights; Stamp 
                          Tax on Public Deeds

Stamp Tax on Public       Tax on the Transfer of       VAT
Deeds;                    Property Rights;
                          Tax on Corporate 
                          Operations; Gift and
                          Inheritance Tax

Stamp Tax on                                           VAT
Commercial and Judicial                                Tax on the Transfer 
Documents                                              of Property Rights; 
                                                       Tax on Corporate   


2.1 Subjective exemptions.

Applicable to the operations performed by the National Government, Public Administrations, Social Security, establishments or foundations, Savings Banks for social or labour purposes and associations of public utility and the Spanish Red Cross.

2.2 Objective exemptions.

Objective exemptions are certain operations recognized in Section B of Article 45 of the Amended Text, among which the following should be emphasized:

(a) Transfers of Securities, whether quoted or not, on the Stock Exchange, which do not imply the transfer of real estate.

(b) Mergers, divisions, contributions of assets, including branches of activity, and exchange of shares, which qualify as reorganizaton of corporations, for tax purposes.

(c) Capital increases motivated by a revaluation of assets authorized by Law.

(d) The transfer of land lots for the construction of dwellings (of official protection - public housing).

(e) Loans, except those guaranteed with mortgages that are subject to the Stamp Tax.

(f) The transfer of real estate to leasing companies in the course of its business activities.

In no case shall exemptions apply to bills of exchange or documents that are used as such.


3.1 Tax on the transfer of property rights.

(i) Generalities.

The conveyance between individuals of property rights for consideration is subject to the Transfer Tax but not subject to VAT, since both taxes are incompatible.

Transactions made by businessmen and professionals in the course of their activities are not subject to the Transfer Tax; neither are the delivery of goods or performance of services that are subject to VAT.

An exception to the foregoing is the delivery or the lease of real estate that even being subject to VAT is exempt from payment (unless the exemption is expressly renounced by the taxpayer).

Taxable events, briefly summarized, are the following:

  • Inter vivos, transfers for consideration of personal property or rights that form part of the net worth of natural persons.
  • Constitution of in rem rights, loans, guarantees, leases, pensions and administrative concessions (except utilization of real estate or installations in ports or airports).
  • Changes in existing rights when it involves capital gains.
  • Comparable acts (judicial proceedings to record or recognize a title in fee simple, acts of notoriety, adjudication in payment and payment of debts with resolutory conditions regarding the sale of goods and leases).

(ii) Tax liability.

3.(ii)(i) Taxpayers.

TAXABLE TRANSACTION               TAXPAYERS                 TAX RATE

Transfer of real estate           Purchaser                 6%

Creation and assignment           Person in whose favour    6%
of in rem rights on real          the right is created
estate (except guaranties) 

Acts and contracts on             Purchaser                 6%
personal and real property 
Creation of in rem rights of      Person in whose favour    1%
guaranty, pensions and sureties   the right is created 

Granting of loans                 Borrower                  1%

Assignment of credit              Assignee                  1%

Transfer of personal property     Purchaser                 4%
and livestock 

Creation and assignment of        Holder of the rights      4%
in rem rights on personal         or assignee
property and livestock
(except guaranty) 

Lease of urban property           Lessee                    Scale of 
(not subject to VAT)                                        taxation

3.(ii)(ii) Liable parties.


Loans                             The Borrowee 

Lease of urban property           The Lessor

Others / Subsidiarily for         The official in charge of a Registar 
loans an leases                   that proceeds to change the registrated 
                                  nominee of the goods without proof of 
                                  evidence of the fulfillment of the 
                                  payment of the tax

3.2 Transfer of shares.

Through the Securities Act, the transfer of shares, quoted or not, are declared exempt. Nevertheless, transfers of securities will be deemed to be the transfer of real estate, taxable under the Transfer Tax at 6 per cent of the value of the contract, if the following two requisites are met simultaneously:

  • The securities transferred are representative of the capital stock or the net worth of entities whose assets are composed, at least by 50 per cent, of real estate located in Spain; and,
  • The purchaser obtains, directly or indirectly, complete ownership of the entity or a controlling equity position in the entity.

The transfer of shares or participation interests, received in consideration for the capital contribution in kind of real estate, will be taxed at the 6 per cent rate when one year has not elapsed between the capital contribution and the transfer.

(i) Usufruct.

The Transfer Tax also treats, in a particular manner, the creation of usufruct. This treatment is used, as a point of reference, by other taxes in the regulation of this legal concept, which is quite common in the Spanish legal panorama.

Three situations of transfers for consideration are offered below, with their respective taxation:

SITUATION                    TAXATION                   TAXPAYER

Reservation of bare legal    Taxation for creation      Beneficiary
title and creation of        of an in rem right
the usufruct 

Reservation of the           Taxation for the           Purchaser
usufruct and transfer of     transfer of the bare
the bare legal title         legal title    

Transfer of the usufruct     Two tax liquidations:      Both purchasers
and bare legal title to      1) for the transfer of
different persons            the usufruct; 2) for 
                             the transfer of the
                             bare legal title.

(ii) The creation of usufruct.

The calculation of the taxable basis will be made in accordance with the following rules:

  • Temporary Usufruct: 2 per cent of the total value of the asset for each year of duration of the usufruct, with a maximum of 70 per cent of the value of the asset (usufruct for 35 years or more).
  • Life Usufruct: Maximum value 70 per cent of the assetïs value, reducing one point for each year of the usufructuary age more than 20 years (Valuation limit of 10 per cent).
  • Usufruct in favour of a legal person: When it is for an indefinitive period of time or for more than 30 years, it is considered a transfer of full property subject to a subsequent resolutory condition.

In the consolidation of ownership, when the property has been divided into usufruct and bare title by means of a transfer for consideration, the following must be distinguished:

  • Consolidation in the bare legal title holder, by completion of the period or death of the usufructuary: the bare legal titleholder must pay the tax levied on the value of the usufruct.
  • Consolidation in the usufructuary: the taxation will be that which corresponds to the transfer of legal title to the usufructuary.
  • If the consolidation is produced by a legal title different from that which produced the division, the tax assessed will be the greater of those calculated for either the consolidation itself or the legal act which produces the consolidation.
  • If the division of ownership was produced without consideration, the consolidation will be governed by the rules of the Gift and Inheritance Tax Act.


4.1 Tax liability.

(i) Taxpayer.

The following corporate operations performed by corporations and similar entities (noncorporate legal persons organized for profit, joint-ventures, joint ownership of ships, joint property created inter vivos with business activities, joint property mortis causa) are subject to this tax which is categorized together with the Transfer Tax:

TAXABLE ACT               TAXABLE BASE                TAXPAYER

Incorporation             Capital                     The Company

Increase in Capital       Nominal amount of           The Company
                          capital and issue premiums  

Decrease of capital       Real value of goods         Separated or
and dissolution           of delivered to the         dissolved partners
corporations              shareholders or partners    or shareholders

Mergers and divisions:    Increased capital;          Surviving or new
merging or being merged   capital of the new          corporation

Contributions by          Real value of goods or      The Company
shareholders to offset    rights contributed less
losses                    charges, expenses or
                          debts also transferred

Transfer into Spain of    Net book value of the       The Company
the corporate domicile    corporation
from a non-EC country
or from an EC country
if the entity was not
taxed by a similar tax 

(ii) Party subsidiarily liable.

Promotors, directors and liquidators, for the payment of the tax accrued in the corporate operations they have fulfilled, if they have taken charge of the Stock Capital assigned or of the transfer of the goods.

4.2 Exemptions.

  • The capitalization of the share-premium reserve, because the constitution of the reserve was already taxed.
  • The change of the corporate purpose.
  • The extension of the duration of corporations.
  • The reorganization of corporations.

4.3 Tax rate.

The tax rate of 1 per cent will be applied to the taxable basis. VAT can be superimposed if there are contributions in kind.

In the application of the Transfer Tax, it must be kept in mind a number of exemptions recognized in several laws, listed in Article 45 of the new Revised Text.


5.1 General Overview.

Documented legal acts, subject to the Stamp Tax, share the following general characteristics:

  • The document has a notarial, commercial or administrative character.
  • The object of the document must be of an economical nature (quantity or thing which can be valued).

The Stamp Tax is compatible with VAT; it is not compatible with the Tax on the Transfer of Property Rights or Corporate Operations in its means of notary documents. It is compatible with those in its two remaining means of commercial and administrative documents.

5.2 Notary documents.

(i) Types.

Two types of taxation:

Fixed: in original drafts, primary and secondary copies and affidavits of writings, and notary acts, except simple copies, the tax is levied at 25 ptas. per page.

Variable: 0.5 per cent of the valuation of the subject contained in the primary copies of writings and notary acts if:

  • The document has as its object a quantity or a quantifiable value.
  • The transaction is capable of being registered in Property, Commercial or Industrial Property Registers.
  • The transaction is not subject to the Tax on Transfers of Property Rights, Corporate Operations or the Gift and Inheritance Tax.

The taxable base, as a general rule, is the declared value, which can be verified by the tax authorities.

(ii) Taxpayer and liable party.

The taxpayer is the purchaser. In any other case, the person who requested the document subject to Stamp Tax.

5.3 Commercial documents.

(i) Types.

Documents subject to taxation are the following:

  • Bills of Exchange.
  • Security Interests and transferable Certificates of Deposit.
  • Documents that function as a draft.
  • Promissory notes, bonds, debentures, and other analogous instruments, provided that they are issued in series for a period of less than 18 months and in which the interests are computed by the difference between the issue price and the reimbursement price.

(ii) Taxpayer and liable parties.

The taxpayers are, as a general rule, the persons who issue the document. In the case of bills of exchange, the taxpayers are:

  • If issued in Spain, the drawer.
  • If issued abroad, the first holder in Spain.

Any person or entity who colaborates in the negotiation or payment of the commercial documents is jointly liable for the payment of the tax.

(iii) Taxable base.

DOCUMENT                      TAXABLE BASE

Bills of Exchange             Quantity drafted
 - Period > 6 months          Double face value

Certificates of Deposit       Face value

Promissory Notes              Value of reimbursement

Other documents               Quantity drafted

The assessed tax figure is found through the application of a progressive scale of tax rates ranging from 0.25 per cent to 0.3 per cent. Payment can be made in cash or with government stamps.

5.4 Administrative documents.

(i) Types.

Two types of acts:

  • Preventive records in Public Registries involving a tax of 0.5 per cent on the value of the right or interest guaranteed or created, unless performed according to court order.
  • Rehabilitation and transfer of noble titles.

(ii) Taxpayer.

In the case of Lis pendens in Public Registries the taxpayer is the person in whose favour the notation is created.

In the case of rehabilitation and transfer of noble titles, the beneficiary.


6.1 General Overview.

Value of the goods subject to tax is determined by the higher of the following: Valuation filed by the taxpayer or that one determined by the tax authorities.

No penalties will be imposed if the valuation filed by the taxpayer was in accordance with the valuation criterio of the Net Wealth Tax.

In the case when the tax authorities determine a higher value this will prevail for Net Wealth Tax purposes.

6.2 Pre-emption right.

In the case when the tax authorities values any good in more that 50 per cent of the value filed by the taxpayer, when this declared value does not follows the rules established in the Net Wealth Tax Act the Public Administration has the right to acquire it.

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.

For further information contact Florentino Carreno on +341 524 710

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