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V1097-19 21 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · transparencia fiscal

Dividends from transparent or asset-holding companies are not subject to Personal Income Tax for shareholders

A shareholder has enquired whether the distribution of profits obtained in 2003 by a company taxed under the tax transparency regime is subject to taxation. The Directorate General for Taxes (DGT) has ruled that such profits are not subject to Personal Income Tax (IRPF) nor are they subject to withholding tax.

The question raised

Taxation of the distribution to the taxpayer by the company of the profits obtained in 2003.

The DGT's ruling

Dividends or profit shares originating from periods in which the entity was taxed under the tax transparency regime (Law 43/1995) shall not be subject to Personal Income Tax (IRPF) or Corporate Income Tax. Likewise, if the recipient is a taxpayer subject to IRPF, profit distributions from holding companies shall not be included in the income for the period nor shall they be subject to withholding. The origin of these profits must be proven by any means of evidence admitted in Law.

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