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V0174-19 28 January 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Exemption from Wealth Tax on shareholdings requires entity not to primarily manage movable or immovable assets

Consultants have requested clarification regarding the scope of the Wealth Tax exemption for shareholdings in a holding company with significant financial investments. The DGT explains how to determine whether an entity manages movable assets and how to calculate the exemption portion based on the allocation of assets.

The question raised

Scope of the exemption for holdings in Wealth Tax.

The DGT's ruling

To access the exemption, the entity must not have the management of movable or immovable property as its primary activity. Liquid deposits in bank accounts are considered non-business assets, whereas financial investments acquired with undistributed profits from the economic activity may not be counted as non-business assets under certain limits. The scope of the exemption is limited to the proportion of assets used for the economic activity minus the debts derived from the same. The determination of the business use of patrimonial elements is referred to the Personal Income Tax regulations.

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