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V0775-17 27 March 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Wealth Tax exemption requires management roles and remuneration to be exercised within the exempt entity

A query was raised regarding whether exercising management functions and receiving remuneration within a subsidiary allows the parent company to claim a Wealth Tax exemption. The DGT ruled that the requirements for business activity, shareholding, and management functions must be met specifically in relation to the entity for which the exemption is sought.

The question raised

Right to exemption from Wealth Tax regarding parent and subsidiary entities. Substantiation of the exercise of management functions and the receipt of remuneration.

The DGT's ruling

The requirements of a business nature, ownership percentages, and remunerated management functions must be predicated or imputed to the specific activity for which the exemption is sought. The exercise of management functions in a subsidiary does not automatically attribute the exemption to the parent entity. It is not mandatory for the remuneration to be paid by the entity where the functions are performed, provided that such provision is expressly stated in the deed of incorporation or the bylaws of the operating entity or the holding company.

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