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V1624-23 8 June 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

To maintain property tax exemption, each real estate company must have a full-time employee

The consultant asks whether a holding company must have a full-time employee or if its real estate subsidiaries must meet the requirement. The DGT responds that each company carrying out property rental must independently have at least one full-time employee under a labour contract.

The question raised

Whether, in order to maintain the exemption of the shareholdings in the holding company for Wealth Tax purposes, there must be a full-time employee in both entity A and entity B, or if, conversely, the employee must be hired by the holding company, or if, where applicable, the employee could be employed by only one of the subsidiaries.

The DGT's ruling

In order for holdings in a holding company not to be counted as assets and to maintain the exemption from Wealth Tax, the investee companies that carry out real estate leases must engage in an economic activity. This requires each of those companies to strictly, directly, and exclusively fulfill the requirement of having at least one employee under a full-time employment contract. It is not valid for a third company within the group to manage the assets and assume the hiring of the employees.

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