PP says no to raising one-percent tax on SICAVs
Investment funds must be kept in Spain to safeguard business interests, government argues
Mariano Rajoy’s Popular Party (PP) government has said it will not raise the tax rate on SICAVs — the variable capital investment firms whose low taxation rates make them the preferred investment vehicles of some of Spain’s richest and most powerful families.
The profits made by these open-ended collective investment schemes are only liable to 1 percent tax, compared with 25 percent on small-to-medium-sized companies and 30 percent on large firms, leading to various legislative initiatives over the years to get different governments, both PP and PSOE, to increase the rate on them. All, however, have fallen on deaf ears.
Now the current government has announced it plans to follow the same path.
In answer to a question in parliament from UPyD leader Rosa Díez, it said it would not be increasing the tax burden on SICAVs because investors could easily move their money to another European Union country with more beneficial taxation, meaning Spain would lose “the business that the administration of the 3,056 Spanish SICAVs generates.”
The amount managed by SICAVs has risen to 23.778 billion euros, according to the latest September figures from financial services company VDOS, divided between 405,084 shareholders. SICAVs are not within the reach of just any saver. To set one up you need initial capital of 2.4 million euros and over 100 participants.