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V0448-16 4 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · grupo fiscal

The transfer of treasury shares within a tax group does not generate a tax result in the transferring entity

A parent company acquires 100% of a company that is integrated into its tax group. It is queried whether the capital gain from said transfer may benefit from the exemption under Article 21 of the LIS.

The question raised

Question raised 1. Whether the capital gain resulting from the transfer by B of the shares of A to the latter could benefit from the exemption provided for in Article 21 of the LIS.

The DGT's ruling

By forming part of a tax group, the parent company's shares become treasury shares at the group level. Since transactions involving treasury shares do not generate an accounting result, no result is produced in the tax base of the transferring entity, nor does a tax capital gain exist. However, the dividends that entity B distributes to A due to said transfer may be exempt under Article 21 of the LIS and entitle the entity to the double taxation deduction provided for in DT 23 if the prior taxation of the sellers is proven.

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