Last January, a legal change came into force that affected the taxation of the Sicav, the favorite investment vehicle of the great Spanish fortunes. Specifically, a modification of the anti-fraud law requires these companies to prove that they have 100 partners with a minimum investment of at least 2,500 euros each in order to benefit from the 1% tax on Corporation Tax. The measure was adopted to end the figure of the mariachisinvestors who appeared in many of these instruments only to complete the minimum number of shareholders required by law in order to pay taxes advantageously.
Despite this tightening, the legislator, in order to prevent the flight of money abroad, offers an advantageous way out to the owners of these vehicles. Specifically, if they choose to reinvest in a fund with the Ucits format (the European standard), the assets accumulated in the Sicav will not have to pay taxes on the capital gains that they have accumulated in it. Of course, the managers of these vehicles had the obligation to communicate to the National Securities Market Commission (CNMV) what decision they made. In this sense, the stock market supervisor has just published the first figures on the agreements adopted by the great Spanish assets.
The great conclusion is that, despite the fact that the vast majority have decided to stop operating and switch to another regime, the largest companies on the market will continue to operate as a Sicav. 467 entities, which represent 20.4% of those registered and 43.6% of the total assets, plan to continue as Sicav. Within this group, 384 will continue to be taxed at 1% with 11,925 million euros, and 83 remain as Sicavs but will be taxed at 25%, with 740 million assets. There will also be 19 that will be transformed into free investment companies (hedge funds).
On the other hand, 1,582 Sicav are liquidated (to transfer the capital to investment funds) with assets of 12,864 million euros, while 174 Sicav will be transformed into Limited Companies or Limited Companies, with a volume of 2,896 million. As of March 31, there were still 63 vehicles (3% of those registered) that had not yet made any decision.
“It is foreseeable that a significant part of the assets of the Sicav that have adopted liquidation agreements will revert to contributions to collective investment institutions, in accordance with the provisions of the transitional regime provided for in the new tax regulations for these entities,” says the CNMV in a note. “Regarding the entities that still have a decision pending, in most cases it is due to the expectation of tax changes in the Basque Country,” adds the body chaired by Rodrigo Buenaventura.
He knows in depth all the sides of the coin.