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V0189-16 20 January 2016 · SG de Fiscalidad Internacional Criterion in force
IRNR · ganancia patrimonial

Spain may tax the sale of shares in a company whose main asset is a public domain concession

A company resident in South Korea sold all the shares of a Spanish company. The inquiry examines whether the capital gain may be taxed in Spain under the Double Taxation Convention between both countries.

The question raised

Taxation of the capital gain derived from the transfer of shares in company A.

The DGT's ruling

The gain from the disposal of shares in a company whose assets consist mainly of real estate may be subject to taxation in the State where such assets are located. Since the granting of a public concession is a real right over real estate according to the Civil Code, it is considered real estate for the purposes of the Spanish-Korean Convention. Therefore, the capital gain is subject to taxation in Spain at 19%.

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