Back to index
V1081-16 17 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · doble imposición interna

Applicability of the domestic double taxation deduction on dividends via the prior taxation test

A company enquired whether it could apply the domestic double taxation deduction to dividends received following various corporate restructurings. The DGT ruled that this is possible if it is proven that the equivalent amount was previously taxed at the level of the transferors, either under Corporate Income Tax or Personal Income Tax.

The question raised

1. Confirmation that the distribution of dividends by the companies subject to acquisition in the 2010 fiscal year, subject to proof of taxation of the transferors, generates the right to apply the deduction for double taxation established in articles 30.4.e) and 30.6 of the TRLIS.

The DGT's ruling

The deduction for internal double taxation is applicable if the taxpayer proves that an amount equivalent to the dividend was included in the taxable base of the previous owners upon transfer. In the case of successions (mergers or demergers), the beneficiary entities subrogate the tax rights and obligations of the transferring entities. If the proof of prior taxation is partial, the deduction shall be applied proportionally. Dividends corresponding to reserves that do not derive from the premium paid upon acquisition shall not entitle the taxpayer to the deduction.

Book your free first meeting