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V0536-20 5 March 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención

Possibility of applying exemption in the transfer of shares under Article 21 of LIS

A patrimonial society asks whether it can apply the exemption for the transfer of its entire shareholding in a Spanish company. The DGT states that this is possible if the percentage and residency requirements are met, although with limitations if the receiving entity is patrimonial.

The question raised

Article 21 of the LIS is applicable to the transfer of shareholdings.

The DGT's ruling

Positive income from the transfer of a shareholding shall be exempt if at least 5% of the capital is held uninterruptedly during the previous year. In the case of entities resident in Spain, the taxation requirement is met. However, if the investee entity is a holding company, the exemption shall not apply to the portion of the income that does not correspond to an increase in undistributed profits generated during the period of ownership.

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