Back to index
V0012-17 3 January 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidades transparentes

Dividends from sales of German KG shares may be taxable in Spain and Germany

A Spanish company asked whether the sale of its shares in German KG entities should be treated as a transfer of shares or as a transfer of real estate. The DGT states that, under the double taxation treaty, income may be taxable in both countries and that the transaction is considered a capital gain from the transfer of shares.

The question raised

1. Regarding the transfer, whether the transfer must be considered, for Spanish tax purposes, as a transfer of interests or as a transfer of real estate assets.

The DGT's ruling

Gains from the sale of interests in German KGs may be subject to taxation in both Germany and Spain pursuant to the Spanish-German Convention. As this constitutes a transfer of interests, the exemption under Article 21 of the LIS is applicable provided that the requirements regarding holding and duration are met. The entity carries out an economic activity even if management is outsourced, and therefore is not a holding company. The result of the transfer is integrated into the operating profit for the purpose of the financial expense deductibility limit.

Book your free first meeting