77% of the rate will disappear due to non-compliance with the law against tax fraud

An amendment to the Anti-Tax Fraud Act passed last year imposed restrictions on the use of scams as a means of reducing taxes paid by large estates. Now, CNMV has released a temporary balance sheet on the impact that this change in regulations has had on more than 2,000 companies of this type operating in Spain. 77%, about 1,756, chose to liquidate or transform into a limited liability company or limited company, according to data provided by a supervisor this Monday. Only two of the ten entities, including the highest assets, will survive the new restrictions imposed.

Last year’s law provided for enhanced control over the “Mariach” figure. The term referred to those straw men and women who were used as fictitious investors to reach at least 100 shareholders, as required by law in these machines. Many wealthy families filled their companies with these participants, who had virtually no bearing on the capital they managed, making it possible to avoid restrictions and use kindness to reduce taxes. By strengthening the limits of this figure of Mariachi, forcing each shareholder to make a minimum investment of 2,500 euros, it has been shown that the vast majority of the currencies operating in Spain do not meet this new requirement.

There are only 467 entities that plan to continue to cicada. They are the largest, apparently due to the fact that although they were 20% of the total, they controlled almost 44% of the assets managed by these companies in Spain. Specifically, of the 467 entities that plan to continue the cycle, according to CNMV, 384 continue to pay 1% with € 11,925 million and 83 remain with SICAV but pay 25% with € 740 million in assets. There will also be 19 that will turn into Free Investment Companies (SILs).

This conversion and liquidation period does not expire by June of the following year. However, the CNMV asked sicavs registered in Spain to inform them of their intention to continue sicav or to cease their presence in Spain. This deadline expired at the end of January, however, the supervisor continued to receive communications from these companies through these vehicles. Of the 1756 cicadas, which will no longer be cicadas, 1582 will be liquidated. They represent 12,864 million euros. “It is likely that a significant portion of Sicav’s assets that have received liquidation agreements will be repaid to collective investment institutions – investment funds, in accordance with the transitional arrangements,” the CNMV said.

The law allowed those who decided to liquidate their property due to non-compliance with the requirements of the new law with a transitional regime of tax incentives to reinvest that capital in other vehicles, such as investment funds. In addition, there are remaining 63 sicav, with a total of € 598 million in assets that have not yet been notified to CNMV of its decision following the application of the new anti-fraud law.