Capital gains in personal income tax. Variations in personal income tax with the tax form (III). In this article, dedicated to explaining the changes in the personal income tax with the tax form that came into effect on January 1, 2020, we will discuss a part of what has been regarding capital gains. The explanation of the rest will be left for the next article since the modifications introduced by the tax reform in the area of capital gains are very extensive, and including them all in a single piece could make it less than light in its reading.
In the extinction of the matrimonial property separation regime, the previous regulation only established that there is no capital gain or loss when awards are made by legal imposition or judicial resolution other than the compensatory pension between spouses.
The application of the update coefficients which correct the monetary depreciation by updating the acquisition value in the transfer of real estate is eliminated.
For more information on update coefficients, see the article Update coefficients. Effect of its elimination on the calculation of capital gains
The abatement coefficients are maintained, although their application is limited to capital gains derived from the sale of goods with a maximum transfer value of 400,000 euros.
The new regulations establish a maximum amount of the transfer value of 400,000 euros to be able to apply the abatement coefficients. That is, it is a joint limit regardless of whether the sale of each of them occurs at different times.
When this sum is less than 400,000 euros, the part of the capital gain generated before 01/20/2006 will be reduced by the amount resulting from applying the abatement coefficients.
A new assumption of taxation of capital gains is established for the positive differences between the market value of the shares or participation in any entity, including collective investment institutions, and the acquisition value, when a personal income taxpayer loses his tax residence in USA.
For the application of this regime, the taxpayer must have the status of resident in USA in ten of the last fifteen tax periods before the previous period that must be declared by personal income tax. In the case of workers who have opted for the special tax regime applicable to workers posted to the USA Territory, the term of ten years will begin to count from the first tax period that the special power does not apply.
Limits are established for the application of this regime:
Limited to participations whose market value in each entity exceeds a total of 4,000,000 euros
The valuation of the units will be:
- Values admitted to trading on their price.
- Securities not owned to trading the highest of those established in article 37 1 b) of the LIRPF.
- Shares or participation in collective investment institutions, the net asset value, and if this does not exist, the value of the net assets, following the provisions of article 37 1 c) of the LIRPF.
Regarding the payment of default interest, they will accrue from the date the deposit was made until the date the return payment is ordered.
Special rules for the application of this regime depending on the taxpayer’s destination:
1. a) Request for deferment of tax debt
Upon request of the taxpayer, the payment of the tax debt corresponding to the capital gains will be deferred, with the application of the general norms of accrual of interests and contribution of guarantees. The postponement will be five exercises. The taxpayer can request an extension of the period above of five years in the case of displacements for work reasons if there are circumstances that justify a more extended temporary expulsion, without the extension being able to exceed five additional years.
2. b) European Union or European Economic Area
When the change of residence occurs to another Member State of the European Union or of the European Economic Area with which there is a productive exchange of tax information, it is excepted from the payment. Still, a monitoring system is established through communication to the Tax administration of the maintenance of conditions for ten years.
The capital gain should only be subject to self-assessment when any of the following circumstances occur within the ten fiscal years following the last fiscal year to be declared for this tax:
- That the shares or participation be transmitted inter vivos.
- That the taxpayer loses the status of resident in a Member State of the European Union or the European Economic Area.
- c) Tax havens
This regime of taxation of capital gains will also be applied when the change of residence occurs in a country or Territory considered as a tax haven, and the taxpayer does not lose his status according to section 2 of article 8 of the LIRPF, with certain specialties:
The capital gains will be imputed to the last tax period in which the taxpayer has his residence in the USA Territory.
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