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V2067-16 13 May 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad patrimonial

Entities with excess cash from undistributed profits are not necessarily patrimonial entities

A query was raised regarding whether a commercial intermediary entity qualifies as a patrimonial entity and if it can apply the small-scale regime. The DGT ruled that short-term financial assets derived from undistributed profits of the economic activity are considered assets used for business purposes when determining if the entity is patrimonial.

The question raised

Whether the consulting entity has the status of a holding company, and if so, whether it can apply the regime for small-scale entities.

The DGT's ruling

To determine whether an entity is a holding company, it must be analyzed whether more than half of its assets consist of securities or are not used for an economic activity, based on the average of the quarterly balance sheets. Short-term financial assets accumulated through excess cash from undistributed profits of the economic activity are considered assets used for the activity. These are not counted as securities for the purpose of determining a holding company status if they do not derive from the transfer of assets used for the activity or from non-computable securities.

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