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V1901-24 ·21 August 2024 ·consulta-vinculante Medium impact
Tax

Dividends between companies with >5% ownership for over a year exempt from IS withholding under Art. 21 LIS, with negative Model 123 declaration

A public limited company distributing dividends to two legal entities holding more than 5% of capital for over a year is not required to withhold tax under LIS Article 21.1, provided the conditions are met. However, even without a withholding obligation, the paying entity must file Model 123 with a negative declaration if no other taxable income has been paid during the period.

In 6 key points

How it affects those involved

Companies with significant cross-shareholdings may avoid withholding tax on dividends, but must still submit a negative Model 123 declaration to ensure compliance with tax reporting requirements.

Lifecycle

2024-08-21PublishedPublished 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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