Investors buying IAG shares will have to pay new Spanish tax
UK investors buying shares in British Airways owner International Consolidated Airlines (IAG) will be affected by a new tax that has come into force this week on Spanish-registered companies.
Anglo-Spanish IAG, which is listed in London and Madrid, is now under the scope of Spain’s Financial Transactions Tax, which levies a 0.2% tax on shares in listed companies in Spain with a market cap of over €1 billion.
The extra tax will add to shareholders’ woes given that the airline is already denying investors a dividend due to the pandemic.
Analysts aren’t forecasting IAG to start paying dividends again until 2022 according to consensus estimates compiled by Refinitiv, and even then the dividend per share for its 2022 financial year is currently expected to be just €0.04 per share, a lot lower than the €0.21 paid out in 2019.
IAG suspended shareholder payouts in April 2020 following the worldwide shutdown at the time due to the pandemic. In any case its ability to pay dividends near-term is significantly impacted as British Airways – the single biggest contributor to group profit – is banned from paying dividends to parent IAG for the duration of a £2 billion loan backed by the UK Government.