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V0026-24 13 February 2024 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Exemption from Wealth Tax on entity shares depends on the nature of its activity

A taxpayer has queried whether their company's acquisition of shares in an Irish fund (ICAV) allows for the maintenance of the Wealth Tax exemption. The DGT explains that classifying the investee entity's activity as economic depends on the organisation of production means and human resources, in accordance with the Personal Income Tax Act (LIRPF).

The question raised

For the purposes of accessing the exemption provided for in Article 4.Eight.Two of the Wealth Tax Law, whether entity B is not considered an entity whose activity is the management of movable assets.

The DGT's ruling

For the holding entity not to be considered a manager of movable assets, its holdings in the investee entity shall not be counted if they represent at least 5% of the voting rights and are held to manage the participation with sufficient means. The activity of the investee entity shall be economic if it involves the self-organization of means of production and human resources to intervene in the production or distribution of goods or services. The assets of the investee, such as loans or treasury, could be considered business assets if they are necessary for obtaining returns, although their valuation is a factual matter.

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