• Great wealth The rich Spaniards move their fortunes before the threat of tax increases

  • Investment Fear of a tax increase after 4-M triggers inquiries

One of the threats that for a long time has flown over the investment industry in Spain has come true this Tuesday in the Congress of Deputies, which has given the green light to the

tightening of the conditions for the sicavs and the socimis

through the approval of the Law on measures to prevent and combat tax fraud.

The rule now faces its passage through the

Senate

to complete its processing there, but it is unlikely that there will be considerable changes. With regard to

sicavs

(collective investment companies), which for years have been one of the preferred vehicles for large fortunes to manage and take advantage of their assets, the new rule sets minimum investment requirements of 2,500 euros, or 12,500 euros in the case of a sicav by compartments, to account for them within the minimum of 100 participants necessary to pay 1% in Corporation Tax.

For those companies that are dissolved as a result of this regulation, a

transitional regime of six months exempt from taxes

is proposed

, including the

Tobin tax

, conditional on reinvestment in other instruments.

In the case of the

Socimis

, one of the amendments included in the law establishes taxation at 15% of their undistributed profits, compared to the 0% that has been in force until now.

This special tax will be applied on the part of the undistributed profits that come from income that has not been taxed at the general rate of Corporation Tax that is in the legal period of reinvestment and the obligations to supply information are adapted to the new taxation.

Both measures had been on the table for a long time, especially the one that has to do with the fiscal conditions of the SICAVs, and investors have been preparing for their entry into force for some time.

Financial sources acknowledge that consultations in the last two years have been increasing to protect large assets and also admit that many of them are aimed at the relocation of fortunes to other more fiscally advantageous territories.

Although parties such as the PP or Cs also contemplated changes in these collective investment companies in their electoral programs, it has been the coalition government between PSOE and United We can that has finally carried them out, thus fulfilling one of the commitments that both sealed to form the Executive.

The tightening of taxation on sicavs and socimis was, in fact, one of the conditions for Pablo Iglesias to support Pedro Sánchez on his way to La Moncloa and almost two years later.

Surprise inspections

The measure also includes

support for surprise inspections

by the Tax Agency.

These actions were questioned last October by the Supreme Court, stating that the inspectors cannot enter to register a private home or a company "to see what is found" only on the grounds that the taxation of the inspected person is below of the average figures for your sector.

The head of the body dependent on the Treasury,

Jesús Gascón,

expressed his concern at the Supreme Court's ruling, and acknowledged that there was a "clash of rights" because, on the one hand, "the constitutionally protected domicile of natural persons, and also legal entities ". But on the other, he added during an appearance in Congress, that protection must "be reconciled with the fact that an investigator with judicial authorization can access those premises without prior notice" since, he concluded, "it does not seem to be very effective when there is the possibility of destruction of evidence. "

"And what the Supreme Court has done," he added, is to "put this situation on the table" and "has asked that we seek a solution," which is precisely what the measure approved today is trying to do.

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