Spain: Financial Transaction Tax (FTT) - Frequently asked questions
Reporting and Payment Process
Which transactions and securities are subject to the SFTT?
The Spanish FTT is applicable on the acquisitions of shares traded on a regulated market (Spanish or foreign) issued by a Spanish entity with a market capitalisation of more than EUR 1 billion on 1 December of the previous year (acquisitions may also result from corporate actions).
Only acquisitions are taxed, while sales are not in scope. The list of Spanish companies with a market capitalisation value on 1 December of each year greater than EUR 1 billion will be published before 31 December of the same yearof the same year on the website of the State Tax Administration Agency (AEAT).
The SFTT concerns shares as defined in Article 92 of the Capital Corporation Law:
- In-scope examples: shares, depositary certificates representing shares (e.g. ADRs of Spanish shares);
- Out-of-scope examples: debt instruments, units of Collective Investment Vehicles, units in Exchange-Traded Funds, derivatives, voting rights.
Derivatives are not themselves in the scope of the Spanish FTT. However, the physical settlement of a derivative over in-scope shares is regarded as a taxable acquisition. Similarly, bonds exchangeable or convertible into shares are not themselves in the scope, but only at conversion.
In summary, only acquisitions of shares or depositary certificates representing such shares are in the scope of the tax. Regarding other financial instruments (derivatives, bonds…), they will only be subject to the tax when the execution or settlement of said financial instruments entails a delivery of shares (or depositary certificates).
There are many exemptions that can be found on the main Spain: Financial Transaction Tax (FTT) page.
What should be reported?
For the purpose of the SFTT, the taxable person should report every transaction and corporate actions that are subject to the FTT even those that are exempt.
How to obtain an Individual Identification Code (IIC)?
Prior to submitting the declaration file, the taxable person that does not have a tax identification code will have to obtain an Individual Identification Code (IIC, hereafter). To obtain the IIC, customers are invited to visit the following link where the page for obtaining the IIC has been published by the Spanish Tax Authorities.
What are the tax rate and the tax base for this SFTT?
The tax rate is set at 0.2%.
The tax base is the amount of the transactions subject to the tax, not including transaction costs derived from the prices of market infrastructures, intermediation trading fees, or all other expenses linked to the transaction. If the amount of the transaction price is not mentioned, the tax base will be the value corresponding to the closing value on the most relevant regulated market, on the last trading day prior to that of the transaction.
There are special rules established to settle the tax base when the acquisition derives from: convertible or exchangeable bonds or other marketable securities, the execution or settlement of options or other derivative financial instruments that give a right to acquire or transfer the taxable securities, forward transactions, settlement of financial contracts.
When is the settlement of the transactions considered to have occurred for the purposes of the settlement of the tax?
The date on which the settlement of the transactions takes place will be considered to be the effective settlement date for the purposes of the tax settlement. However, taxable persons may choose to consider as settlement date the theoretical settlement date, which is, in the case of transactions carried out in trading centres, the second business day following the date of execution, subject to any adjustments that may be required if the transactions are not settled as a result of a failure to settle the securities. This option must be selected in the first self-assessment form filed by the taxable person in each calendar year and will be effective at least for that year and subsequent years unless waived. In addition, the waiver may only be made in the first self-assessment filed in each calendar year.
(Please see the section "Declaration template" for information on how to communicate this option or waiver to Iberclear).
What is the deadline for customers to send their declarations to Clearstream Banking?
Clearstream Banking is subject to a declaration deadline set by Iberclear by close of business on the 10th calendar day in any calendar month, following the month in which the reportable transfer was settled (“Iberclear Deadline”). Customers are required to submit their declaration file(s) to Clearstream Banking by 17:00 CET, two calendar days before the Iberclear Deadline (“Customer Declaration Deadline”).
However, if the Iberclear Deadline falls on a non-Business Day (as defined in Clearstream Banking’s General Terms and Conditions), then:
- the Iberclear Deadline shall be (by close of business on) the first preceding Business Day; and
- the Customer Declaration Deadline shall be (by 17:00 CET) the second preceding Business Day.
A yearly Spanish FTT calendar will be published by Clearstream, detailing the exact deadlines for each submission month.
How will Clearstream process customer’s declaration file(s)?
Customers have the choice to upload their declaration through Xact Web Portal or Xact File Transfer.
Upon receipt of customers declaration file(s), Clearstream will perform technical validation checks of the declaration header format:
- If the declaration fails the validation check, it will be rejected by Clearstream and customers will have to send another declaration file (s) before the deadline mentioned in the following section.
- If the declaration passes the validation check, Clearstream will debit the account indicated in the declaration file(s) with the declared amount.
In the latest case when the declaration passes the Clearstream validation checks:
- If the debit is successful, Clearstream will forward the declaration file(s) to Iberclear. The latter will perform some validation checks and will forward the accepted file(s) to the Tax Authorities.
- If the debit fails, clients are invited to fund their accounts before Clearstream deadline mentioned below.
Therefore, customers are invited to fund their accounts with the declared amount when sending their declaration file(s).
In the event that Iberclear or the Tax Authorities rejects the declaration file(s):
- Customers will have to send a new declaration file(s);
- Clearstream will credit back customer accounts with the declared amount indicated in the rejected declaration file(s)
How will Clearstream process customer’s late declaration file(s)?
Iberclear will not accept declaration file(s) belonging to the current declaration period (M), if they are delivered after the deadline of Iberclear, that is, the 10th calendar day of month M+1.
Iberclear will begin accepting these late declaration file(s) as of the 21st calendar day of month M+1.
For declaration file(s) belonging to previous declaration periods (prior to M), customers can submit their file(s) on any business day of the month.
Upon receipt of the late declaration file(s), Clearstream will try to debit the account indicated in the declaration file(s) with the declared amount:
- If the debit is successful, Clearstream will forward the declaration file(s) to Iberclear. Iberclear will perform some validation checks and will forward the accepted file(s) to the Tax Authorities.
- If the debit fails, the declaration file(s) will not be rejected. Clearstream will forward the declaration file(s) to Iberclear only after the customer has funded the account and the debit is successful.
Therefore, customers are asked to fund their accounts with the declared amount when sending their late declaration file(s).
Customers must send a declaration file for each month of acquisition if they had previous transactions from separate acquisition months. Customers won't be able to combine transactions from various months. Iberclear will reject the declaration file if transactions from various months are combined.
The late declaration file(s) will be processed by Iberclear after their receipt. Customers should be aware, however, that in the event of late declarations, the Tax Authorities might levy surcharges on the taxable person. Furthermore, Clearstream will not be involved in the collection of these surcharges.
How should customers complete the declaration template?
A tax declaration file includes all types of transactions in securities that are subject to the transaction tax irrespective of whether the transactions are taxable or exempt from taxation, for the same month and year of acquisition and the same Taxable person. It will not be possible to include several taxable persons in the same tax declaration file, or to mix different months of acquisition by each taxable person. If transactions from different months or different taxable persons are mixed, the declaration file will be rejected by Iberclear.
What should customers do if they decide to outsource their reporting activities?
Customers that outsource their reporting activities may have their declaration file(s) rejected since the existing FTT PoA agreement with a third party does not include the permission to upload Spanish FTT declarations.
Customers who want to enable the upload of Spanish FTT declarations via a FTT dedicated PoA should contact their Relationship Officer to obtain the relevant documents. The FTT dedicated PoA must be signed and returned to Clearstream Banking.
What are the potential penalties, surcharges, or late payment interests imposed by the AEAT?
The Spanish Tax Law provides for potential penalties, surcharges and late payment interests on tax infringements, late filings, lack of submissions and incorrect or incomplete submissions:
- Surcharges for late filing when there is a tax payable (taxable transactions): for an amount of respectively 5%, 10%, 15% or 20% depending on the time elapsed, respectively during the first 3 months, 6 months, 12 months or later than 12 months after the deadline.
The three first surcharges avoid late payment interests and potential penalties. The 20% surcharge only penalties (late payment interests would be charged as from the 12-month elapsed).
- Potential penalties if, after a tax inspection, the AEAT discovered that the tax payable was not filed: in general, penalties might raise to 50% of the tax quota, plus late payment interests from the relevant deadline.
- Penalties for late filing when there is not any tax payable (exempt transactions): it might depend on whether the taxable person filed an incomplete or inaccurate return, or it did not file anything. In the first case, general penalties could amount from 0.5% to 2% of the transactions not correctly filed or 100 euros per data, depending on the circumstances. In the second case (not filing anything), general penalties could amount 20€ per data with maximum 20,000€.
In any case, penalties should never be automatic. The Tax Authorities should always need to justify the reasons why they consider that the entity obliged to file the returns acted with intent or negligence and that its position was not based on a reasonable interpretation of the Law.
Neither Iberclear nor Clearstream shall assume any potential penalties, surcharges or late payment interests in any case, which will be completely assumed by each taxable person. Clearstream will not be involved in the collection of these potential penalties, surcharges, or late payment interests.
In the case of tax inspections or requirements by the Spanish Tax Authorities about one specific taxable person, due to the incomplete or incorrect information submitted, any costs incurred by Clearstream shall be assumed by the taxable person.
Can customers share the Clearstream declaration template with their underlying clients?
The Clearstream declaration creator (Excel template for declaration) can be distributed to the underlying clients. However, the template is protected so they would not be able to edit it. Clearstream will receive the declaration from the customers and not from the underlying clients of the customers.
Who should report SFTT in case of Corporate actions?
According to article 36 of the Spanish General Tax Law 58/2013, a taxable person (in general, “sujeto pasivo”) is the person liable to pay tax who, according to the law, must fulfil the main tax obligation, as well as the formal obligations inherent to it, either as a taxpayer or as a substitute for the taxpayer. Therefore, it differentiates between:
- The taxpayer (“Contribuyente”), who is the one who carries out the taxable event (in the case of the FTT, the investor acquiring the shares).
- A substitute is the taxable person who, by operation of law and in the place of the taxpayer, is obliged to fulfil the main tax obligation, as well as the formal obligations inherent therein. The substitute may demand from the taxpayer the amount of the tax obligations fulfilled, unless the law stipulates otherwise.
Based on the above, the following are the potential scenarios and alternatives to determine which entity is the taxable person:
- The investment firm or credit institution making the acquisition for its own account: the taxpayer (and taxable person) is the investment firm or credit institution and there is no substitute.
- In any other case, there is a substitute of the taxpayer depending on which of the four alternatives applies:
1. Acquisition on a trading venue: the substitute shall be the market member (or the financial intermediary who receives the order from the acquirer if it involves one or more financial intermediaries);
2. Acquisition outside a trading venue, but with a systematic internaliser: the substitute shall be the systematic internaliser (or the financial intermediary who receives the order from the acquirer if it involves one or more financial intermediaries);
3. Acquisition outside a trading venue and without a systematic internaliser: there are two potential substitutes: the financial intermediary who receives the order from the acquirer and the financial intermediary who delivers the securities to the acquirer;
4. In any other case: the substitute shall be the entity rendering custodian services on behalf of the acquirer.
Therefore, if the corporate action implies that an investment firm or credit institution, acting on its own account, acquires shares, the taxable person shall be that investment firm or credit institution (no substitute).
In other case, if there is no other financial intermediary involved, as described in scenarios b)1, b)2 and b)3 above, the substitute shall be the entity rendering custodian services on behalf of the acquirer. In the case of a custody chain, this should be the custodian closer to the acquirer. This could be the case of CBF or CBL, depending on the situation.
The latest declaration template is available on the main Spain: Financial Transaction Tax (FTT) page.
How many transactions can customers report in each declaration file?
Even though Iberclear considers that 1.000.000 transactions can be reported per one declaration file, Clearstream advises its customers to keep the amount of transactions per one declaration file to around 20.000 to avoid the file not passing through the Clearstream connectivity layer (Xact Web Portal or Xact via File Transfer).
Is the length of the file format "Header Register" and "Second Tier Register" fixed or variable?
For the ITF001 format:
- The first line (First tier header register) has fixed length 820
- The lines 2 to n (Second tier registers) have fixed length 535
A sample declaration file is attached below, where customers can view the XLS template filled with some testing data.
Can customers provide a NIF/CIF in Field 7 (58) Taxable person tax number if they do not have an IIC?
As described in the last worksheet of the declaration template “Fields definitions and formats”, the value of this field will be a NIF/CIF, or failing that, an IIC.
If no fiscal identifier is available, customers can make a request to obtain an IIC. How to obtain an Individual Identification Code (IIC)? above, provides more information about this.
Customers can find further information in the worksheet, "Fields definitions and formats" in the declaration template.
How should customers communicate to Iberclear their option or waiver to use the theoretical settlement date as the settlement date?
As described in the last worksheet of the declaration template “Fields definitions and formats”, to choose the theoretical settlement date as the settlement date, customers should complete Field 21 with “X” in the first self-assessment of each calendar year. This field will be empty in all other cases. Furthermore, Field 22 must be left blank.
The option for the theoretical settlement date may only be made in the first self-assessment that the taxpayer must submit in each calendar year and will take effect at the less during that year, and in subsequent years as long as it is not renounced/waived.
To waive this option by the intended settlement date, customers should complete Field 22 with “X” in the first self-assessment of each calendar year. Field 21 must be left blank if Field 22 is reported.
What is the meaning behind A to F in Field 63 Type of presentation via DCV and is there a default value which can be used here for taxable persons located outside of Spain?
Customers should fill in this field according to the Royal Decree's description.
Royal Decree (in Spanish)
Royal Decree (In English)
Clearstream Banking recommends customers should approach their Tax Advisor for further information.
More information can be found in the "Fields definitions and formats" worksheet of the Declaration Template.
The Spanish Tax Authorities have also published their own Frequently Asked Questions.