All Spanish Real Estate Investment Trusts (commonly known as SOCIMI for their abbreviation in Spanish) that wish to opt for the SOCIMI special tax regime must communicate their decision to the Spanish tax authorities at least three months before the end of the tax period during which this regime will apply.
Therefore, for SOCIMI whose tax period coincides with the calendar year and that want to apply for the special tax regime with effects as from January 1, 2021, the limit to communicate their decision expires on September 30, 2021.
As of December 31, 2020, there were 90 SOCIMI whose shares were admitted to trading in Spanish multilateral trading facilities (MTF), and four were listed in stock markets.
Under Act 11/2009, of October 26 (the “SOCIMI Act”), in order for companies to benefit from the SOCIMI special tax regime, they must have their shares admitted to trading in a regulated market or an MTF.
However, companies can decide to opt for the special tax regime even if at the time of their decision they do not meet all the requirements set forth under the SOCIMI Act.Therefore, there are two types of requirements.
Essential requirements
Companies must fulfill the requirements below by the time they decide to be opt for the special tax regime (otherwise, the special tax regime will not be applicable):
- Mandatory dividend distribution policy: having fulfilled the relevant corporate obligations, SOCIMI must distribute (i) 100% of the profits from the dividends distributed by SOCIMI subsidiaries; (ii) at least 50% of the profits from the transfer of real estate and shares of SOCIMI subsidiaries; and (iii) at least 80% of the remaining profits.
- Exclusive corporate purpose: (i) purchasing and developing urban real estate for lease; (ii) holding shares in another SOCIMI’s share capital or in the share capital of other non-resident entities as long as they have the same corporate purpose of the SOCIMI and are subject to a similar mandatory dividend distribution policy; (iii) holding shares in other entities’ share capital, whether resident or non-resident, as long as their corporate purpose is purchasing urban real estate for lease and their regime is similar to that of SOCIMI regarding dividend distribution and the investment of income and assets; and (iv) holding shares in real estate collective investment institutions.
- Registered shares: SOCIMI’s shares can only be registered shares.
Rest of requirements
The following requirements can be fulfilled within two years:
- Investment and source of income: SOCIMI are subject to certain requirements regarding the investment of their assets and the collection of income.
- Shares admitted to trading: shares must be admitted to trading in (i) a regulated market in Spain, in an EU Member State, in a European Economic Area (EEA) country or in a country with which there is effective exchange of information, in (ii) a Spanish MTF (e.g., BME Growth) or an MTF in an EU Member State or EEA country.
Being admitted to trading in BME Growth entails certain shareholding requirements, so, from the start, shareholders with less than 5% of the share capital must own SOCIMI’s shares (i) with an estimated market value of €2 million or (ii) representing 25% of the issued shares.
- Minimum share capital: €5 million, represented by a single class of shares.
- Corporate name: it must include “SOCIMI, S.A.”
If a SOCIMI is another SOCIMI’s (sub-SOCIMI) sole shareholder, the requirements regarding the admission to trading of shares, minimum share capital and corporate purpose will only apply to the SOCIMI.