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V4596-16 27 October 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · instituciones de inversión colectiva

Reinvestment tax deferral applies to foreign UCITS listed on European exchanges but not on Spanish exchanges

A query was raised regarding whether investments in foreign collective investment schemes (CIS) listed on European exchanges, but not on the Spanish stock exchange, qualify for tax deferral through reinvestment and exemption from withholding tax. The Directorate General for Taxes (DGT) ruled that, because they are not listed on the Spanish stock market, the reinvestment tax deferral is applicable, although they remain subject to withholding tax.

The question raised

Question posed In the case of investments made by Personal Income Tax taxpayers in UCITS listed on European stock exchanges, as referred to in the description of facts, through their marketing entities located in Spain, the following is posed:

The DGT's ruling

Foreign UCITS listed on European stock exchanges but not on the Spanish stock exchange are not considered index ETFs or SICAVs for the purpose of excluding withholding tax; therefore, capital gains shall be subject to withholding tax or payment on account. Nevertheless, these institutions are not affected by the exclusion from the deferral regime, allowing investors to apply the reinvestment deferral provided that the requirements of Article 94 of the Personal Income Tax Law (LIRPF) are met. To satisfy the reinvestment requirement, the marketing entity must intervene directly in the securities holding structure, for example, through an omnibus account.

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