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V1935-15 18 June 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidades de tenencia de valores extranjeros

The exemption for double taxation in the transfer of shares includes undistributed profits and unrealized capital gains subject to the fulfillment of requirements

A company subject to the foreign holding company regime asks whether the exemption for international economic double taxation also applies to unrealized capital gains. The DGT responds that the exemption covers both the net increase in undistributed profits and unrealized capital gains, provided that the requirements of Article 21 of the TRLIS are met.

The question raised

Question raised: Clarification is requested as to whether the exemption to avoid double taxation on capital gains would apply not only to the net increase in undistributed profits but also to unrealized capital gains.

The DGT's ruling

Under the foreign holding company regime, income derived from the transfer of shares is exempt both in the portion corresponding to the net increase in undistributed profits and in the portion corresponding to unrealized capital gains. If the requirements are not met in all fiscal years, the exemption shall be applied proportionally according to the rules of Article 21.2 of the TRLIS. For the calculation of income, the income of all subsidiaries must be considered in proportion to the shareholding, excluding dividends already distributed and income from the reversal of impairments.

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