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V1317-16 31 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de dividendos

Dividend exemption possible if minimum shareholding and double taxation treaty with information exchange maintained

A consulting entity asks whether the Corporate Income Tax exemption can be applied to dividends from a non-resident subsidiary. The DGT responds that it can be applied if the minimum shareholding is maintained and the subsidiary is located in a country with a double taxation treaty with Spain that includes information exchange.

The question raised

Question posed: Whether the consulting entity may apply the exemption under Article 21.1 of the Corporate Income Tax Law.

The DGT's ruling

To qualify for the dividend exemption under Article 21.1 of the LIS, a holding of at least 5% of the capital must be maintained uninterruptedly during the year preceding the distribution. In the case of non-resident entities, the 10% minimum taxation requirement is deemed satisfied if the investee entity resides in a country with a double taxation treaty that includes an exchange of information clause.

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