Taxation of ETFs and Investment funds in Spain

Information and questions about the Law in Spain and Andalucia.
mugball
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Taxation of ETFs and Investment funds in Spain

Postby mugball » Mon May 14, 2018 9:44 am

Hi all have been researching income tax and CGT in Spain ahead of a possible move. I cannot find any info re Exchange Traded Funds being treated any differently to regular shares, which I hope means they are treated the same?

Eg I currently live in Ireland and because some ETFs roll up and reinvest the dividends a special exit tax of 41% applies, and if they are not sold within 8 years there is a deemed disposal and you have the 41% on gains whether you sell them or not. Regular shares are simply treated as income tax on dividends, CGT on actual disposal.

Am I right in thinking that an ETF investment is treated the same as an individual shareholding in Spain? eg same rates of savings income tax and CGT?

Investments would be held with a UK stockbroker but I be would tax resident in Spain.

Miro
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Re: Taxation of ETFs and Investment funds in Spain

Postby Miro » Mon May 14, 2018 4:53 pm

Good luck with finding an answer to that one! Ask two tax "experts", and you'll get three answers. Chances are a Spanish accountant will have no idea what an ETF is; an English speaking one in Spain will probably have no idea how they're treated. My inclination would be to simply treat them as shares when filing personal income tax declarations, and count on nobody in the tax department having a clue either.
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

ashtondav
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Re: Taxation of ETFs and Investment funds in Spain

Postby ashtondav » Tue May 15, 2018 8:57 am

I agree. I would class them as shares - as they are in the uk. I’d still ask first. Blevins Franks?

Superplonk
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Re: Taxation of ETFs and Investment funds in Spain

Postby Superplonk » Tue May 15, 2018 10:37 am

Pro:In Spain the reinvested dividends on accumulation funds are not taxed until sale, when you are liable for CGT.

Con: One disadvantage of ETF's over mutual funds is that you can't delay CGT by reinvesting sale proceeds in a similar fund.

Gasman
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Re: Taxation of ETFs and Investment funds in Spain

Postby Gasman » Tue May 15, 2018 10:51 am

I thought I would do a google to see what you are talking about as I had never heard of ETFs - it seems to be tax friendly between Ireland and the US, and is quite well known in Spain as an investment idea. It does seem though that treatment may depend on whether it is a Spanish based fund, or like yours an "international" one, being based in Ireland. Anyway, in case you have not come across these in your searches - herewith some info.
http://www.bolsamadrid.es/ing/ETFs/InformacionGeneral/FrequentlyAskedQuestionsETFs.aspx
http://www.bolsamadrid.es/ing/ETFs/InformacionGeneral/FrequentlyAskedQuestionsETFs.aspx

Try Blevins Franks ...

mugball
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Re: Taxation of ETFs and Investment funds in Spain

Postby mugball » Tue May 15, 2018 11:17 pm

Thanks all - a call to Blevins Franks sounds like a good idea


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