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A company enquired whether dividends from a Cuban entity could be included in the undistributed profit used to fund the Canary Islands Investment Reserve (RIC). The DGT ruled that dividends from holdings in other entities are not considered undistributed profits and, therefore, cannot be used to fund the reserve.
This ruling limits the scope of the RIC by clarifying that income received from external holdings, even if not distributed by the recipient, does not qualify as undistributed profit for the purpose of tax reserve provisioning.
The tax team reviews your specific situation.
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