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V1991-14 24 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención por doble imposición

Economic double taxation exemption applicable to UAE subsidiary dividends under certain conditions

A company inquired whether dividends from its UAE subsidiary could benefit from exemption under Article 21 of the Corporate Income Tax. The DGT confirms that the exemption applies if participation, residency in a treaty country, and economic activity requirements are met.

The question raised

Whether Article 21 of the Corporate Income Tax Act applies regarding the exemption to avoid international economic double taxation on dividends and income from foreign sources derived from the transfer of securities representing the equity of non-resident entities in Spanish territory, and therefore whether the dividends that the taxpayer may receive from the subsidiary located in the United Arab Emirates may qualify for the aforementioned article and thus be exempt due to double taxation.

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