The Tobin Tax On Financial Transactions Already Operating In Spain

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The so-called Tobin tax on financial transactions – which will be charged on the acquisition of shares of large Spanish listed firms like Inditex, Iberdrola or Banco Santander – came into force on January 16, the EFE agency has reported.

The new tax will mainly affect the purchases of these companies’ shares, either in cash or via credit. According to the list drawn up by the Tax Agency, it will be applied to almost 60 companies with a market capitalisation of more than 1 billion euros as of December 16 2020.

On this date, the “ranking” of capitalisation was led by Inditex, with 82.778 billion euros, Iberdrola, 71.501 billion, and Banco Santander, 46.455 billion.

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They are followed by BBVA (27.044 billion euros), Amadeus (26.579 billion), Cellnex (24.578 billion), Endesa (23.832 billion), Aena (20.835 billion), Siemens Gamesa (19.542 billion) and Naturgy (18.514 billion).

Then comes Telefónica (18.260 billion euros), Ferrovial (17.323 billion), EDP Renováveis (17.252 billion), Grifols (14.617 billion), CaixaBank (13.601 billion), Repsol (13.309 billion), Red Eléctrica (9.022 billion), IAG (8.884 billion) and ACS (8.375 billion).

EDP Renováveis is a particular case as it is listed on Euronext, but with headquarters in Madrid.

In addition to all of those, the tax will be imposed on the purchase of shares in Acciona, Enagás, Mapfre, Bankia, Colonial, Bankinter, Fluidra, Merlin Properties, FCC, Catalana Occidente, Ebro Foods, Viscofan, Zardoya Otis, Vidrala, Solaria, CIE Automotive and Acerinox.

Other companies with over 1 billion euros market capitalisation, and therefore subject to the tax, include Corporación Financiera Alba, Rovi, Logista, Gestamp, Banco Sabadell, Almirall, Euskatel, NH, PharmaMar and Prosegur.

The list is completed by Mediaset España, Amrest, Cash, CAF, Meliá Hotels International, Sacyr, Applus Services, Indra Sistemas (Series A), Unicaja Banco and Faes Farma.

The tax will be 0.2% on the cash amount of the transaction, which will have to be paid by the buyer of the stocks.

Bankinter’s Blog of Economy and Finances flags that currently the standard cost for an investor for a purchase-sale operation in shares of these Spanish companies worth 10,000 euros would be about 13.85 euros. From the entry into force of the new tax this would rise by 20 euros to 33.85 euros.

However, if the calculation is made on a operation worth 60,000 euros – for which the current standard cost is 18.6 euros – a further 120 euros would need to be added for the Tobin tax. And costs would be 7,5 times more at 138,6 euros.

Both the Tobin Tax, and the new Google Tax on digital services, have come into force three months after publication in the Official State Gazette (BOE). Both will be paid month by month, around the 20th, according to the Taxpayer’s Calendar for 2021. The taxes cannot be deferred or paid in installments.

However, certain operations typical of the primary market, those necessary for the correct operation of the markets, those originated by business restructuring operations or resolution measures, those carried out between companies of the same group and temporary assignments, Spain from the “form 604”.

The Government expects to collect around 850 million euros a year from the Tobin Tax. The fact that it targets companies with a market capitalisation of over 1 billion euros excludes most small and medium-sized companies.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.