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V1717-15 ·1 June 2015 ·consulta-vinculante Medium impact
Tax

Dividend distribution and profit reinvestment tax relief are compatible if mandatory reserves are met

A company enquired whether it could distribute part of its profits as dividends while simultaneously claiming the profit reinvestment tax relief under Article 37 of the TRLIS. The DGT ruled that this is permissible provided that the undistributed profits are sufficient to fund the investment reserve required by law.

In 6 key points

How it affects those involved

Companies must ensure that retained earnings are sufficient to cover the mandatory investment reserve before distributing dividends if they wish to benefit from the profit reinvestment tax deduction.

Lifecycle

2015-06-01PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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