Skip to content
Back to index
V0107-23 1 February 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · obligación real

Spain may tax shares in foreign companies if at least 50% of assets are immovable property in Spain

A German resident asks whether they must pay tax in Spain on their shares in a German limited partnership holding property in Ibiza. The DGT responds that if the property represents at least 50% of the company's assets, the partner is subject to real tax obligation.

The question raised

Taxation for Wealth Tax purposes in the 2022 fiscal year and subsequent years.

The DGT's ruling

According to the Convention between Spain and Germany and domestic regulations, Spain may tax holdings in companies whose assets consist of at least 50% in real estate located in Spanish territory. In this case, the partner shall be taxed under the real obligation rule and the tax base shall be determined according to the value of the holdings (Art. 16 LIP), with the debts reflected in the company's balance sheet being deductible. If the percentage of real estate assets in Spain is less than 50%, there is no obligation to tax based on the ownership of said holdings.

Book your free first meeting