The Council of Ministers that was held last Friday, January 18, 2019, approved two law projects that contemplate the creation of the Tax on Financial Transactions and the Tax on Certain Digital Services. The law projects have not been published yet, but we summarize below the information provided in this regard by the Government.

On the one hand, the Tax on Certain Digital Services has an indirect nature and contemplates taxing the provision of online advertising services, online intermediation services and the sale of data generated from information provided by the user in digital interfaces.

The tax rate will be 3% and the companies subject to it will be those with a net turnover of more than 750 million Euros worldwide and whose income derived from digital services affected by the tax exceeds the amount of three million Euros in Spain. The digital services provided between entities that are part of a group in which the parent company holds, directly or indirectly 100% of the share capital, will not fall under the scope of this tax.

On the other hand, the Tax on Financial Transactions has an indirect nature and contemplates taxing the acquisition of shares of Spanish companies, regardless of the residence of the agents involved in the operations, provided they are listed companies and that the stock market capitalization value of the company is higher than 1,000 million Euros.

The tax rate will be 0.2% and the taxpayer will be the financial intermediary that transmits or executes the purchase order. The following acquisitions, among others, will be exempt from this tax: those carried out in primary market transactions; those that are necessary for the operation of market infrastructures; those of corporate restructuring; those carried out between companies of the same group; and temporary assignments of shares.

Once both law projects are published, we will review in detail the different aspects that have been highlighted in the preceding paragraphs.