How is the sale of shares taxed in Spain?
The sale of shares is subject to taxation that depends on who transfers them and who receives them. Here we give you all the details you need to know.
Taxation of the sale of shares
The first thing to note is that the transfer of shares is subject to taxation through personal income tax (IRPF) or corporate income tax (IS). However, for this to happen, one condition must be met: the gain must provide capital gains; if shares are sold at a loss, there is no capital gain and, therefore, no tax is payable.
Remember that the transfer of shares is associated with limited companies, because in cooperatives and public limited companies the mechanisms and figures are different. We are, therefore, faced with a common reality in SMEs and family businesses.
However, the valuation of the gain must respond to objective criteria set by the Administration. In the case of company shares, therefore, it is not sufficient to refer to the nominal value. We therefore recommend specialist advice.
The scale of taxation on the sale of shares varies according to two factors: the capital gain and whether they are sold by an individual or a company. Let’s take a look:
Transfer of shareholdings by commercial companies
Trading companies have a simple system for calculating the amount they have to pay: they simply subtract the sale value by the acquisition value; the difference will be added to the taxable base to settle the corporate income tax. Therefore, the process is simplified here because it will be counted as a profit.
Transfer of company shares by private individuals
The sale of shares, when the beneficiary is an individual, is subject to personal income tax. Ideally, whenever possible, a payment on account should be made for the corresponding quarter or in the Income Tax Return. And here, as in the taxable base of the tax, progressivity is applied according to the gain. These are the scales:
The tax payable for profits of less than €6,000 is 19 %. This is the lowest scale and is meant to be applied for small capital gains.
When the profit is between EUR 6,000 and EUR 50,000, 21 % is payable. This bracket applies when the gain is of a certain importance.
And finally, for capital gains of more than 50,000 euros, 23% is payable. It should be noted that this is the ceiling; no more than this percentage can be charged.
There is one exception to this logic: transfers of intra-family shareholdings. If it is from parents to children or spouses, in certain cases, there is an exemption of 95 % of the tax base for inheritance and gift tax. In practice, there would be no tax to pay, provided that the company is maintained for 10 years.
Get advice from specialists!
The transfer of company shares is taxed and it is convenient to know how much you have to pay or if you are exempt. Do you have any doubts? At Asesoría Orihuela Costa we specialise in tax advice for individuals and SMEs, contact us to find out more!
