One of the changes introduced in the tax reforms which took effect 1st January 2015, affects payers of Personal Income Tax (IRPF, the acronym in Spanish) who are no longer liable for this tax due to a change of residence. For these taxpayers, the positive differences between the market value of any shares or stock in any type of company held by the taxpayer and the acquisition value will be considered their taxable capital gains whenever the taxpayer was the holder during at least ten of the fifteen taxable periods prior to the last taxable period that must be declared for this tax and any of the following circumstances apply:

a) The market value of the shares or stock combined exceeds 4,000,000 euros.

b) Or, the percentage held in the company as of the payment due date for the last taxable period that must be declared for this tax is more than 25% as long as the market value of the shares or stock in said company exceed 1,000,000 euros. In this case, this system will only be applied to capital gains from the shares or stock in these companies.

Any capital gains are to be included in the savings income and will be taxed in the final tax period that must be declared for IRPF purposes. If necessary, a complementary self-liquidation shall be completed yet it will not be subject to any type of sanction, delay interest or surcharge.

The tax regulations establish criteria for determining the capital gains sum.

When the change in residence occurs as a result of a temporary move for employment reasons to a country or territory that is not considered a tax haven or for any other reason as long as the temporary move is to a country or territory that has signed an agreement with Spain avoiding international double taxation containing an information exchange clause, the taxpayer may apply to the Tax Administration for a postponement of the payment of the tax due for capital gains. Notwithstanding, the corresponding delay interest and the constitution of guarantees in accordance with the provisions of the Spanish General Taxation Act will apply.

When the change in residence is to another European Member State or a country within the European Economic Space with which there is a tax information exchange system, the payment is exempt however a monitoring mechanism is established whereby the taxpayer must communicate the continuation of such status to the tax administration for a period of 10 fiscal years.