Capital Gains tax on Spanish Stock US Resident

Question

I have two questions, I think the first will be simpler.

If buy an ADR stock in say Santander or Telefonica do I have pay Spanish capital gains on the stock and file a Spanish tax return when I sell them, or do I just pay US capital gains?

Here is my real question.
I am a US resident. I gained Santander CDI shares (listed on the London Stock Exchange) via Abbey National, which became a bank, which then got bought by Santander. The shares are held in my US trading account. I am planning on selling the shares but i have read some stuff about having to file a Spanish 210 tax form. Do I have to do that? I am not a Spanish resident and have never lived or worked in Spain.

Answer 1

You do not need to pay any taxes in Spain for capital gains from selling stocks of a Spanish bank. However, you may need to file a tax return to claim the exemption.

General rules of taxation, which are also explicitly called out in the Spanish-American tax treaty, is that gains on intangibles are taxed by the jurisdiction in which you're resident. So in your situation (US tax resident, not a Spanish tax resident) sale of shares in a Spanish company (other than real estate holding company) will only be taxed by the US.

Same goes to the UK.

Relevant articles are article 13 (paragraph 7) in the Spanish treaty, and similarly worded article 13 (paragraph 5) in the British treaty.

Answer 2

I am planning on selling the shares but i have read some stuff about having to file a spanish (sic) 210 tax form. Do I have to do that? I am not a spanish (sic) resident and have never lived or worked in spain (sic).

Yes, chances are you should do. But hopefully enough, chances are you might not need to, as a particular exception on being a US national (but sadly I can't quote properly about this).

In case you actually have to fill modelo 210, failure to comply could be fined up to 200EUR, on a case of article 198 of the "general taxes law" of Spain. Note that this is because you haven't had net income on the operation. If you haven't had net loss on the operation, you would be subject to a case of article 191 of the same law instead, which is a proportional fine.

Here's your help page for modelo 210. This is the law ultimately governing over all of your 210 stuff (but there are many more).

Hope that helped.

_{DISCLAIMER: This is not your tax advisory, it's a vague (yet informed) entry level reference in order to guide you. Here's no responsibility for any damages caused. If on doubt, always choose to go to the tax advisory office or to the revenue service office, depending on the cases.}